1987 (7) TMI 69 - HC - Income Tax

Summary

Issues:
1. Validity of the order passed by the Additional District Judge quashing the demand for house tax.
2. Compliance with mandatory provisions of sections 124 and 126 of the Delhi Municipal Corporation Act.
3. Justifiability of the demand raised by the Corporation.
4. Challenge to the setting aside of the demand for the years prior to 1984-85.
5. Jurisdiction of the High Court under article 226 of the Constitution to grant relief.

Analysis:
1. The writ petition challenged the order passed by the Additional District Judge quashing the demand for house tax. The Additional District Judge allowed the appeal filed by the respondents against the levy of house tax, citing the failure to follow mandatory procedures. The judge directed the refund of the tax amount deposited by the respondents, emphasizing the lack of justification for the demand raised by the Corporation.

2. The petitioner argued that the Corporation had complied with the provisions of sections 124 and 126 of the Corporation Act. However, the High Court noted that the notice sent under section 126 was not valid as it was addressed to an owner at an unbuilt plot's address where she did not reside. The court upheld the Additional District Judge's decision, stating that the demand was unjustified and illegal due to improper service of notice.

3. The Corporation contended that the demand for the years prior to 1984-85 had become final and could not be challenged. The High Court clarified that each assessment year stands independently, and the appeal filed was only against the assessment for 1984-85. As no appeal was filed against earlier bills, the respondents could not challenge those demands in the current appeal.

4. Despite acknowledging the improper extent of relief granted by the Additional District Judge, the High Court emphasized the need for substantial justice. It noted the lack of valid assessment or tax levy on the respondents and supported the refund of the wrongly collected tax amount. The court dismissed the writ petition, highlighting that interference was unnecessary given the minor amount involved and the procedural irregularities.

5. The High Court concluded that the respondents had succeeded in their appeal before the Additional District Judge and were entitled to the refund. It highlighted the discretionary nature of relief under article 226 of the Constitution and justified the dismissal of the petition without costs, considering the circumstances of the case and the lack of proper adherence to statutory provisions.