{"id":280805,"date":"2023-01-03T09:00:46","date_gmt":"2023-01-03T03:30:46","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=280805"},"modified":"2023-01-09T14:29:30","modified_gmt":"2023-01-09T08:59:30","slug":"where-the-enactments-stipulate-a-specific-method-for-arriving-at-the-value-of-the-property-such-a-method-must-be-applied-by-the-state-madras-high-court-reiterates-legal-resea","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2023\/01\/03\/where-the-enactments-stipulate-a-specific-method-for-arriving-at-the-value-of-the-property-such-a-method-must-be-applied-by-the-state-madras-high-court-reiterates-legal-resea\/","title":{"rendered":"State must follow the specific method stipulated in the enactments for determining the value of the property, Madras High Court reiterates"},"content":{"rendered":"
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Madras High Court:<\/b> In a writ petition to call for the entire records starting from the Council resolution dated 30-05-2022 passed by the Council of the Greater Chennai Corporation and the consequential proceedings and quash the entire proceedings, being illegal and ultravires to the provisions of Section 100 of the Chennai City Municipal Corporation Act, 1919, Anita Sumanth, J. held that the amendments by way of impugned Government Order, Gazette Notification dated 11-04-2022 and Council Resolution dated 30-05-2022 stand confirmed and challenges to the same are dismissed, and set aside the Property tax General Revision Notices for the period 2022-23 second half . Further, it directed that qua the writ petitioners, the amendments will be operative from the first half of 2023-24, i.e., 01.04.2023 onwards. It accepted the challenge to the property tax demands. Moreover, it directed the Corporations to ensure that the websites are kept robust and grievance mechanisms are put in place to enable all property tax assesses to seek clarifications regarding any aspect of property tax assessments.<\/p>\n

Issues:<\/b><\/p>\n

1) Whether the plinth area basis could be adopted for determining the annual value of buildings?<\/p>\n

2) Whether the Municipal Administration and Water Supply Department(‘MAWSD’), has adopted the plinth area basis in making the general revision of assessments?<\/p>\n

3) Whether the fair rent formula is to be uniformly applied by MAWSD in determining the annual value of all buildings in the City as urged by the petitioner?<\/p>\n

4) Whether the reason as to why and how the revision of assessments has taken place in a particular case should be set out in the notices issued under rules 2-B, 3 and 3-A of schedule IV to the Madras City Municipal Corporation Act, 1919?’<\/p>\n

The Court said that the first question was answered in favour of the petitioner stating that property tax cannot be levied on plinth area basis. Further, answering the second issue, that is related to whether the plinth area basis had been applied in effecting general revision, which, on the facts presented by respondents, the Court declined to answer.<\/p>\n

While dealing with the third and fourth issues as to whether the basis of revision must be set out in the pre-assessment notice, the Court considered the specific argument that the annual value must be determined only with reference to the fair rent formula under the Madras Buildings (Lease and Rent) Control Act, 1960.<\/p>\n

The conclusion was that there was no fetter placed upon the authorities to only follow the fair rent formula contemplated under the Rent Control Act in respect of those buildings which do not come under, or at exempted from the purview of the Rent Control Act. In the cases of other buildings, as a norm, the fair rent formula provided for in the Rent Control Act should normally be followed in the determination of the annual value of buildings.<\/p>\n

Placing reliance on MCD<\/i> v. Mehrasons Jewellers (P) Ltd.<\/i>, (2015) 9 SCC 719<\/a> , Commr.<\/i> v. Griha Yajamanula Samkhya<\/i>, (2001) 5 SCC 651<\/a>, Lokmanya Mills Barsi Ltd.<\/i> v. Barsi Borough Municipality<\/i>, (1962) 1 SCR 306<\/a>, the Court concluded the following:<\/p>\n