FOOD CORPORATION OF INDIAversusSTATE OF PUNJAB AND ORS.

A                        FOOD CORPORATION OF INDIA
                                           v.
                            STATE OF PUNJAB AND ORS.

                                DECEMBER I, 2000

B              [D.P. MOHAPATRA AND Y.K. SABHARWAL, JJ.]


          Municipalities:

           Punjab Municipal Act, 1911--Section 67-Amendments of Assessment
C   list--Powers of Municipal Committee-Requirement ofgiving notice to person
    likely to be affected by proposed amendment-A vague and unspecific notice
    neither stating reason nor ground for amending assessment list-Non
    compliance of statutory requirement-Order amending assessment list held
    unsustainable.
D
          By a notice issued under Section 67 of the Punjab Municipal Act, 1911
    the Municipal Committee amended the assessment list, enhancing the
    property tax of a godown, stating that the previous assessment list was prepared
    under the mistaken impression about the capacity of the godown. The Food
    Corporation of India challenged the order amending the assessment list in
E   respect of its godown. However, the order of revision was confirmed in appeal.
    The Writ Petition filed by the Corporation for quashing the orders passed by
    the statutory authorities was also dismissed by the High Court. Hence this
    appeal

F         The appellant Corporation contended that the notice seeking revision
    of the assessment list was vague and lacked particulars and had been issued
    without application of mind to the relevant factors and that the revision of the
    tax had been made without ascertaining the capacity of the godown which had
    not undergone any change in structure or capacity since the last assessment.

G           The respondent Municipal Committee supporting the order of amended/
    revised assessment submitted that the power to amend/revise the assessment
    list is specifically vested in the Municipal Committee and the amendment in
    the assessment list was made since the previous assessment in respect of the
    godown as such had been prepared on erroneous basis relating to the capacity
H   of the godown and the rate of rent per bag.
                                         276
                                F.C.I. v. STATE                              277
      Allowing the appeal, the Court                                                 A
         HELD: 1.1. While vesting the power in the Committee to amend an
assessment list, the Legislature has taken care to specify the circumstances
in and the grounds on which such amendment may be made; it has also laid
down the manner in which such amendment or revision of the assessment
list is to be made. Care has also been taken to comply with principles of natural    B
justice by making provision for giving notice to the person who is likely to be
affected by the proposed amendment giving him not less than a month's time
to tender objection, if any, to the Committee and allowing him an opportunity
of being heard in support of the objections raised. Notice to the affected person
mandated in the section is not an empty formality, it is meant for a purpose.        C
A vague and unspecific notice will not provide reasonable opportunity to the
noticee to file objection meeting the reasons/grounds on which the amendment
of t~e assessment list is proposed to be made. Such a notice cannot be taken
to be complying with the statutory requirement. [283-C, D, E, Fl

     1.2. In the instant case, the notice neither states the reason for/or the       D
grounds on which the amendment is proposed to be made nor does it indicate
any material on the basis of which the revision as stated in the notice is
proposed to be made. [283-F-Gl

      1.3. The Committee is not sure on which ground it proposes to proceed          E
for amending the assessment list. Such a notice not only does not comply
with the statutory requirements, it also defeats the very purpose of the statutory
provisions. [284-Al

      1.4. Regarding the question of increase of the capacity of the godown in
question and rate of rent, neither the discussions in the orders under challenge     p
indicate any basis for increasing the capacity of the godown from 1,84,000 to
2,06,656 bags, nor there is any primary material in support of the order. Notice
was vague and it had been issued without due application of mind and the
grounds stated in the order are based on no material. (284-B, q

      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7423 of 1996.                  G

     From the Judgment and Order dated 6.9.94 of the Punjab and Haryana
High Court in C. W.P. No. 12289of1994.

      Y. Prabhakar Rao for the Appellant.                                            H
    278                     SCPREME COURT REPORTS [2000] SliPP. 5 S.C.R

A         Ajay Majithia, Manu Beri and S.B. Upadhyay for the Respondents.

          The Judgment of the Court was delivered by

          D.P. MOHAPATRA, J. The legality and validity of the order amending
    the assessment list in respect of its property by the Municipal Committee,
B   Sangrur in the State of Punjab is under challenge in this appeal filed by the
    Food Corporation of India (hereinafter referred to as 'the Corporation').

          The assessment in question relates to a godown described in the notice
    as "property unit No. 239-Block No. I situated within the local limits of the
    Municipality". By notice No.I 10/HP dated 27.6.1991 issued under section 67
C   of the Punjab Municipal Act, 1911 ( for short 'the Act') the Municipal
    Committee intimated the Corporation that it intends to amend/revise the
    assessment in respect of its property and if the Corporation has any objection
    it may file the 'same along with documentary proof in support, within a month.
    The relevant portion of the notice is extracted here-under:
D          HTo

           The Distt. Manager,
           Food Corporation of India,
           Jakhal Road, Sunam.

E          Property Unit no.239                        Block No.I

           Which is situated in the Municipal limits Sunam, in connection with
           which you are hereby informed vide this notice that the amendment
           in the assessment of your this property is liable to be done necessarily
           due to the following reasons and is done as under:-
F
           Wherea~ ,your above mentioned property has wrongly been left out
           from the assessment list whereas it should be/should have been in the
           same.

           2. Whereas the assessment of this property of yours was assessed
G          less due to inadvertent mistake/fraud or intention, which needs
           amendment thereby.

           Therefore, vide this notice you are hereby informed that your above
           mentioned property i.e. house/shop/plot alongwith office, godowns
           and quarters, the assessment of the same is being amended due to the
H          aforementioned reasons w.e.f. the year I 986-87 as per details mentioned
                    F.C.!. v. STATE [D.P. MOHAPATRA. J.]                  279
        hereunder and the new assessment is fixed as below. Any objection        A
        in this behalf may be given in writing alongwith the documentary
        proofs in support of the same within one month from today.

Property        House/     Name of the        Name of Annual      Tax
Unit No.        Ward        Owner of            tenant   assessed assessed
                No.        the property       if any   rent after 15%            B
                                                        deducting
                                                       10 %

       Nute:- The        I. Godown of food grains,     493972.00    69373/15
                         capacity 206656 bags @ 20
differential house
tax in respect of the    paise per bag per month.
                                                                    paise P.A.
                                                                                 c
years      will     be
                         2. Pedestals outside for
recovered from you
                         28790 bags @ 08 paise per     2303.00
after allowing the tax
                         bag per month
paid.
                         3. Quarters of class IV                                 D
                         employees attached            3600.00

                         4. Weigh Bridge
                         5. Office two sets            4000.00

                                                       8000.00
                                                                                 E
                         Maintenance                   313875.00
                                                       4%

                                                       51387.50
                                                       462487.50                 F

        Earlier given notice No.PMA .under Section 67 and No.654/HT dated
        2.1.91 is hereby recalled and this new notice is issued accordingly.
                                                                   Sd/-
                                                            Executive Officer,   G
                                                         Municipal Committee
                                                                      Sunam"
       In reply to the notice the Corporation denied that any additional tax
liability should be imposed on it in respect of the property since the godown
in question has already been assessed to property tax; that no addition/         H
     280                      SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A    alteration has been made in the building/godown after finalisation of the last
     assessment, therefore, no revision of the tax is required to be made. The
     Corporation also questioned the validity of the revision of tax with
     retrospective effect from 1986-87. The Corporation also denied the statement
     in the notice that the capacity of its godown is 2,06,656 bags and not 1,84,000
     bags on the basis of which the previous assessment was finalised. The
B    Corporation drew the attention of the Municipal Committee that the notice
     containing a similar proposal for revising the property tax in respect of the
     same property on same grounds had been issued previously and on receipt
     of the objection of the Corporation the said notice was withdrawn.

C           The assessing officer, by order dated 5.12.1991, amended the assessment
     list enhancing the property tax of the godown to Rs. 4,62,487 .50, rejecting the
     objections raised on behalf of the Corporation. He held, inter alia, that the
     previous assessment list was prepared under the mistaken impression that
     capacity of the godown in question was 1,84,000 bags in place of 2,06,656
     bags. Since the Corporation failed to produce any material in support of its
D    stand that there was no error in the previous assessment and such assessment
     was made on the correct factual position regarding capacity of the godown
    the objection raised by it was liable to be rejected. Regarding the withdrawal
    of the previous notice, the assessing officer stated that the said notice was
     issued proposing a revision of the tax on the ground that the building/
E   godown had undergone a change which, on verification, was found to be
    incorrect; therefore the said notice was withdrawn. Regarding the rate of rent
    per bag the assessment officer held that the tax is to be assessed on the basis
    of rent @ 20 paise per bag per month which, in his view, was the rate at which
    godowns were being let out in the town. On these findings the assessment
    list was amended/ revised fixing Rs. 4,62,487.50 and the order was given effect
F   from the year 1986-87.

           In the appeal filed by the Corporation the Additional Deputy
    Commissioner, Sangrur by order dated 22.7.92 confirmed the order of the
    assessment with the modification that the amended assessment list will be
G   given effect from l.4.92 in place of the year 1986-87. From the orders it appears
    that the appellate authority, rejecting the objection raised by the Corporation
    against the rate of 20 paise per bag per month fixed by the assessing officer,
    gave the reason: "because in principle it has been stated by the Corporation/
    Warehousing corporation in a number of cases that they have no objection
    if the assessment of godown be fixed at the rate of 20 paise per bag per
H   month". The petition filed by the Corporation before the State Government
                  F.C.I. v. STA TE [D.P. MO HAP ATRA. J.]                   281

under section 23 7 of the Act challenging the order of the appellate authority      A
confirming the amended assessment list proved futile. Then the Corporation
filed a Writ Petition before the Punjab & Haryana High Court seeking a writ
of certiorari quashing the aforementioned orders passed by the statutory
authorities which was summarily dismissed by the order dated 6.9.94. The
order reads :
                                                                                    B
        "Heard. No ground to interfere has been made out. Dismissed."

        The said order is under challenge in this appeal.

      Shri Y. Prabhakar Rao, learned counsel appearing for the appellant
contended that the notice seeking revision of the assessment list is vague          C
and lacks particulars. It has been issued without application of mind to the
relevant factors. The learned counsel further contended that the revision of
tax has been made without ascertaining the capacity of the godown which has
not undergone any change in structure or capacity since the last assessment
and the per bag rate fixed in the order is also without any basis. According
to the learned counsel the Corporation has been paying tax assessed on the          D
basis of rental of 16 paise per bag per month in respect of the godown taken
on hire and there is no reason why that rate should not be accepted as the
basis for assessing the tax.

      Per contra Shri Ajay Majithia, learned counsel for the respondent             E
Municipal Committee supported the order of amended/revised assessment.
He submitted that the Corporation proceeded to amend/revise the tax in
respect of the godown in question since the previous assessment as such
had been prepared on erroneous basis relating to the capacity of the godown
and the rate of rent per bag. The powe·r to amend/revise the assessment list,
according to the learned counsel, is specifically vested in the Municipal           F
Committee under section 67 of the Act in exercise of which the order has been
passed, and therefore, the High Court rightly dismissed the Writ Petition.

      Before entering into merits of the contentions raised it will be convenient
to notice the relevant statutory provisions.
                                                                                    G
      Chapter IV of the Act ( Sections 5 I-68A) contains the provisions relating
to Municipal Fund and Property. The procedure for assessing immovable
property is dealt with in sections 63 to 68A. Section 63 deals with preparation
of assessment list. Section 64 deals with publication and completion of the
assessment list. Section 65 mandates the Committee to give public notice for        H
    282                     SUPREME COL:RT REPORTS [20001 SLPP. 5 S.C.R.

A   the time fixed for revising the assessment list. Section 66 which deals with
    settlement of list; lays down that after the objections have been inquired h1to
    and the persons making them have been allowed an opportunity of being
    heard either in person or by authorised agents, as they may think fit, and the
    revision of the vaiuation and assessments has been completed, the amendments
    made in the list shaH be authenticated by the signatures of at least two
B   members of the committee,. who shall at the same time certify that no valid
    objection has been made to the evaluation and assessment contained in the
    list, except in the cases in which amendments have been entered therein and
    subject to such amendments as may thereafter be duly made, and that the tax
    so assessed shall be deemed to be the tax for the year commencing on the
C   first day of April of the year in which notice was issued under section 64 or
    section 65 of the Act. In sub-section(2) of section 66 it is provided that the
    list when amended under this section shall be deposited in the committee's
    office and shall thereafter be open during office hours to all owners or
    occupiers of property comprised therein or the authorised agents of such
    persons and a public notice that it is so open shall forthwith be published.
D   In Section 67 provision is made for further amendments of an assessment list.
    Since the proceeding under challenge was initiated under that section, it is
    quoted in extenso:

           "67. Further amendments of Assessment list (I) The committee may at
           any time amend the list by inserting the name of any person whose
E          name ought to have been or ought to be inserted, or by inserting any
           property which ought to have been or ought to be inserted, or by
           altering the assessment on any property which has been erroneously
           valued or assessed through fraud, accident or mistake, whether on the
           part of the committee or of the assessee, or in the case of tax payable
F          by the occupier by a change in the tenancy, after giving notice to any
           person affected by the amendment, of a time, not less than one month
           from the date of service at which the amendment is to be made.

           (2) Any person interested in any such amendment may tender his
           objection to the Committee in writing before the time, fixed in the
G          notice or orally or in writing at that time. and shall be allowed an
           opportunity of being heard in support of the same in person or by
           authorized agent, as he may think fit.

           (3) Notwithstanding anything contained in this Act, the Committee
           may with a view to give effect to the annual value as modified by the
H          Punjab Municipal (Amendment) Act 11. 1994 amend the assessment
                   F .C. l. v. STATE I D.t' MOHAPATRA, JI                   283
        list of the year commencing on the first day of April of the relevant       A
        year for increasing or reducing annual value of any property and of
        the assessment thereupon after giving notice at any time to any
        person affected by the amendment of a period not less than one
        month from the date of service at which the amendment is to be made
        and the Committee shall consider any objection made in this regard
        by any such person and the amended assessment list shall come into
                                                                                    B
        force w;th eff~ct from the first day of April of the year !n which notice
        was given to the person affected."

       Section 68-A vests further power in the Committee to amend assessment
list on grounds of fr<>lid, accident or mistake on the pan of the Committee or      C
of the assessee.

      On a reading of the afore-quoted provisions, it is clear that while
vesting the power in the Committee to amend an assessment list, the Legislature
has taken care to specify the circumstances in and the grounds on \\ hich
such amendment may be made; it has also laid down the manner in which               D
such amendment or revision of the assessment list is to be made. Care has
also been taken to comply with the principle of nat.ural justice by making the
provision for giving notice to the person who is :ikely to be affected by the
proposed amendment giving him not less than a month's time to tender
objection, if any, to the Committee and allowing him an opportunity of being
heard in support of the objections raised. Notice to the affected person            E
mandated in the section is not an empty formality; it is meant for a purpose.
A vague and unspecific notice will not provide reasonable opportunity to the
noticee to file objection meeting the reasons/grounds on which the amendment
of the assessment list is proposed to be made. Such a notice cannot be taken
to be complying with the statutory requirement.                                     F
       On perusal of the notice issued to the Corporat10n, which is on record,
it is evident that the notice is vague and lacks particulars. It neither states
the reason for/or the ground on which the amendment is proposed to be made
nor does it indicate any material on the basis of which the revision as stated
in the notice is proposed to be made. It is stated in the notice:                   G
       "Whereas your above-mentioned property has wrongly been left out
       from the assessment list, whereas it should haveishould have been in
       the same. Whereas the assessment of this property of yours was
       assessed less due to inadvertent mistake/fraud or intention, which
       needs amendment thereby".                                                    H
    284                     SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A         It is apparent that the Committee is not sure on which ground it proposes
    to proceed for amending the assessment list. Such a notice not only does not
    comply with the statutory requirements, it also defeats the very purpose of
    the statutory provisions.

           Coming to the question of increase of the capacity of the godown in
B question and the rate of rent, neither the discussions in the orders under
    challenge indicate any basis for increasing the capacity of the godown from
    1,84,000 to 2,06,656 bags, nor has our attention been drawn to any primary
    material in support of the order. In the circumstances the contentions raised
    by the learned counsel for Corporation that notice is vague and it has been
C   issued without due application of mind and the grounds stated in the order
    are based on no material, have to be accepted.

          From the discussions in the foregoing paragraphs it is clear that the
    order passed by the assessing officer and confirmed by the appellate authorit}
    and the State Government are clearly unsustainable. The High Court was in
D   error in dismissing the writ petition summarily by passing an unreasoHed
    order as has been done in this case.

          Accordingly, the appeal is allowed with costs. The order passed by the
    High Court dismissing the writ petition is set aside. The writ petition is
    allowed and the orders passed by the assessing authority, the appellare
E   authority and the State Government are quashed.

    R.A.                                                         Appeal allowed.