Raising Issue Of Non-Service Of Bills At Appellate Stage Not Permissible; Calcutta High Court Upholds 50% Interest Waiver On Property Tax

The Calcutta High Court, while dismissing the appeal of the assessee, upheld the 50% waiver of the interest on property tax.

The bench of Justice Joymalya Bagchi and Justice Gaurang Kanth has observed that the bills claiming enhanced property tax had not been raised during the arrears period are wholly unfounded, and the appellant ought not to be permitted to raise them at the appellate stage.

The appellant is one of the owners of the premises. In 1998, the property tax on the premises was fixed at Rs. 165 per quarter. The appellant contended he has been regularly paying the property tax. In 2004–2005, the property tax was enhanced to Rs. 1115 per quarter, and it is the appellant's case that he had paid the tax regularly.

The notice of demand for arrears tax for the years 2011–2012, 2012–2013, and 2013–2014 and the current tax up to the 4th quarter of 2014–2015 with surcharge and interest were raised.

The appellant made representations before the municipal authorities to permit him to pay the arrears tax in instalments. The municipality declined the prayer, and he moved before the single judge.

The single judge, while upholding the notice of demand, waived 50% of the interest demanded from the appellant.

The Bally Municipality has assailed the order passed by the Single Judge to modify the notice of demand raised by the Municipality towards payment of arrears property tax for the years 2011–2012, 2012–2013, and 2013–2014 and current dues till the 4th quarter of 2014–2015 with surcharge and interest by directing a waiver of 50% of the interest amount.

The appellant contended that no bills with regard to the enhanced property tax were raised with his client for the years 2010–2011, 2011–2012, and 2013–2014. The interest cannot be demanded on the arrears amount. He is ready and willing to pay the outstanding arrears in installments.

The municipality contended that the appellant has made out a new case on appeal. Neither in the representation before the Municipality nor in the writ petition did the appellant contend bills had not been raised against him for the arrears period. The municipality does not have any scheme to waive interest on property taxes. Hence, the order, to the extent it waives 50% of interest, is liable to be set aside.

The court noted that the bills were raised more than a decade ago. At no stage had the had the appellant raised a plea that the bills had not been served on him. As per law, municipalities are required to maintain records for three years. The relevant bills are currently not available. The issue of non-service of bills belatedly at the appellate stage to avoid his liability. He cannot be permitted to do so. In his representation before the municipality, the appellant did not whisper that the bills had not been served upon him. The appellant's only prayer was to pay the arrears tax by way of instalments due to financial stringency.

The court, while dismissing the appeal of the appellant, directed the municipality to raise a notice of demand upon the appellant to pay an amount fixed by the single judge within seven days from the date, and the appellant shall pay the same within a fortnight, failing which the amount shall carry an interest rate of 10% till the amount is realised.

Counsel For Appellant: Sandip Ghosh

Counsel For Respondent: Amal Kr. Sen

Citation: 2024 LiveLaw (Cal) 149

Case Title: Saila Ghosh Versus State of West Bengal

Case No.: M.A.T. 1307 of 2023

Click Here To Read The Order