Chandigarh

DF-II

CC/1049/2019

Amarnath Aggarwal (HUF) - Complainant(s)

Versus

Municipal Corporation - Opp.Party(s)

Abhineet Taneja Adv.

14 Feb 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-II

U.T. CHANDIGARH

 

Consumer Complaint No.	:	1049/2019
Date of Institution	:	16.10.2019
Date of Decision	:	14.02.2023

 

                     

            

 

Amarnath Aggarwal (HUF) through its Karta Kulbhushan Goyal r/o House No.80, Sector 6, Panchkula.

                 ...  Complainant.

Versus

1.  Municipal Corporation through its Commissioner, Sector 17, Chandigarh

 

2.  The Commissioner, Municipal Corporation, Sector 17, Chandigarh

 

…. Opposite Parties.

 

BEFORE:
		SHRI AMRINDER SINGH SIDHU,	PRESIDENT
		SHRI B.M.SHARMA	MEMBER
Present:-
	Sh.Abhineet Taneja, Counsel of complainant Ms.Urvashi Dhugga, Counsel of OPs.

 

   

ORDER BY AMRINDER SINGH SIDHU, M.A.(Eng.),LLM,PRESIDENT

1.     The complainant has filed the present complaint under Section 12 of the Consumer Protection Act, 1986, as amended up-to-date alleging therein that he is owner of SCF No.407, Motor Market, Manimajra, Chandigarh and  the OPs introduced the property tax on commercial units ranging from Rs.3/- and Rs.20/- per sq. feet depending upon the zone in which the property falls.  The OPs issued the bills to the complainant for the year 2007-08 till 2019-20 and all the bills were duly paid by him on time. The copies of the bills were attached as Annexure C-1 (Colly.).  In July, 2019 he received a notice dated 30.07.2019 (Annexure C-2) stating that a sum of Rs.1,80,178/- are outstanding towards arrears of property tax and in case the complainant fails to deposit the same the recovery proceedings were to be initiated in accordance with Section 138 of Punjab Municipal Corporation Act, 1976 as extended to UT, Chandigarh. Being approached to the OPs, they handed over a statement of accounts to the complainant and stated that a sum of Rs.40,506/- is outstanding as property tax as detailed below:-

Sr. No.	Bill for the financial year	Amount of the bill.
	2004-05	Rs.4299/-
	2005-06	Rs.12069/-
	2006-07	Rs.12069/-
	2008-09	Rs.12069/-
		Rs.40,506/-

         The complainant enquired that total bills comes to Rs.40506/- then he was informed that the OPs have levied interest @ 18% on the aforesaid amount and thus the amounts comes to Rs.1,80,178/-. Subsequently, OP No.2 issued notice dated 13.9.2019 (Annexure C-4) for attachment of the property and recovery of Rs.1,82,319/-. After calculating the amount as per the demand of the OPs, the total amount comes out to Rs.1,37,433/- and the OPs while admitting fault in calculation issued (Annexure C-5) revised statement of accounts and asked him to pay Rs.1,37,433/-. It has further been averred that the OPs never intimated that any bill is outstanding on account of property tax.  Moreover, in the year 2012, he went to the OPs for rectification of the bill dated 01.04.2012, which was duly rectified but the OPs did not inform regarding the previous bill to be paid. The Hon’ble Punjab and Haryana High Court has held in numerous cases that in case the recovery of any amount is barred by law of limitation, the authorities cannot insist for recovery of such amount.  It has further been averred that he approached the OPs time and again to withdraw the illegal and arbitrary demand but all in vain. Alleging that the aforesaid acts of omission and commission on the part of the OPs amount to deficiency in service and unfair trade practice, the complainant has filed the instant complaint seeking directions to the OPs not to demand the property tax for the financial year 2004-05 to 2008-09 being illegal and arbitrary and to quash the notice dated 30.07.2019 and subsequently order of attachment dated 13.09.2019 vide the OPs resorted to recover the amount by attachment and  to overhaul the account, compensation for mental agony and physical harassment as well as litigation expenses.

2.     In their written version, OPs while admitting the factual matrix of the case has stated that the property tax on Commercial, industrial and Institutional Lands & Buildings) Bye-laws 2003 were required to be paid w.e.f. 22.11.2004 under self-assessment scheme but the assesse has not deposited the tax during 2004-05, 2005-06, 2006-07. The assessee paid the property tax for the year 2012-13 and 2014-15 after closing of due date i.e. 31^st May. The notice dated 30.07.2019. The notice dated 30.07.2019 for the recovery of Rs.1,80,178/- was rightly issued as per the provision of Chandigarh Municipal Corporation (Tax on Commercial Industrial and institutional lands and buildings) Bye laws 2003 framed under the Punjab Municipal Corporation Act 1976 as extended to the Union Territory (w.e.f. 24th day of May 1994) by the Punjab Municipal Corporation Law (Extension to Chandigarh) Act and the amount due towards the arrears along with interest has been mentioned therein.  It has further been stated that as per property tax arrears sheet/record the assessee has not paid the tax for the year 2004-05, 2005-06, 2006-07, 2008-09 and 2016-17 for which he was charged 25% extra over and above the prescribed rates mentioned in Municipal Corporation Property Tax Bye laws. The property tax bills were printed from NIELIT (National Institute of Electronics and Information Technology) with the condition that "Arrears of property tax/fire cess for the years be paid; if not paid earlier.  It has further been stated that the bill dated 30.07.2019 was rightly issued as per the provision of the Act and the interest has been rightly charged. As per the provisions of the Act, if any person liable to pay the property tax and fails to deposit the same despite notices, the case be processed for issuance of attachment orders with interest upto date of the given payment date with 15 days time period to recover the property tax along with the interest. As per property tax arrears sheet was generated through sampark portal and in this case the tax amount of years in question was paid late i.e. after closing of due date, the sampark system identifies the same as full amount and adjust the amount firstly towards interest column and had charged interest accordingly on the remaining amount left after adjusting all the pending amount.  It has further been stated that if an assessee/owner has failed to pay the entire amount due towards the property tax in that case the remaining amount needs to be paid in the shape of arrear. The rectification in the amount is not an issue but the due payment is an admitted fact which the complainant is also not denying. The arrears is a continuous wrong and deemed to be carried forward as long the person is not paying the entire amount. The tax money is a public money and cannot be with held with any property owner. It has further been stated that the OPs have rightly issued the notice for the recovery of the arrears of property tax. The demand of arrears of property tax cannot be termed as harsh since the arrears have been demanded in accordance with the visions of the act. The complainant is not entitled to any compensation as clamed. The remaining allegations have been denied, being false. Pleading that there is no deficiency in service on their part, the OPs prayed for dismissal of the complaint.
3.     The parties filed their respective affidavits and documents in support of their case.
4.     We have heard the Counsel for the parties and have gone through the documents on record including written submissions.
5.     The main question to be determined in this case is as to whether there is a relationship of consumer and service provider between the complainant and the OPs or not?

        In order to find out answer to this question, the judgment of the Hon'ble Kerala High Court is relevant to be discussed. 

6.     In the judgment titled as Thrissur Municipal Corporation vs Ummer Koya Haji, reported as 2006 (3) KLT 897, the Hon’ble Kerala High Court held as under:-

“1.  xxxxxx

2.   The Municipal Corporation challenges the said order on three grounds viz,

(1) the demand for tax is a sovereign function. Therefore, the same does not come within the purview of service and the complainants in the petitions before the Forum are not consumers of the Corporation and therefore the order of the Forum is without jurisdiction

(2). The Kerala Municipality Act provides for a hierarchy of appellate and revisional authorities and therefore the jurisdiction of the Forum under the Consumer Protection Act is impliedly excluded.

(3) In any event, Section539 of the Kerala Municipality Act does not apply to the present case. Even if it applies, the property tax being a charge on the property itself, the period of limitation can only be 12 years and not 3 years under Section 539.

3.   Although, notices were accepted by the respondents and the 2nd respondent appeared through counsel, nobody was present on the two days when the matter was taken up for hearing. I have heard the learned Counsel for the petitioner-corporation.

4.   The question as to whether statutory authorities, local bodies etc., are amenable to the jurisdiction of the authorities under the Consumer Protection Act has been subject matter of several decisions of the Supreme Court. I shall refer to two of them here. First one is Lucknow Development Authority v. M.K. Gupta. . In that case, the jurisdiction of the authorities under the Consumer Protection Act was invoked in relation to the activities of the Lucknow Development Authority, Delhi Development Authority and the Bangalore Development Authority in the matter of delay in delivery of possession of houses to allotees, non-completion of the flat within a stipulated time, defective and faulty construction etc. The question which was posed before the National Consumer Dispute Redressal Commission from whose decision the case came up before the Supreme Court was as to whether the Lucknow Development Authority, Delhi Development Authority and Bangalore Development Authority constituted under the State Acts to carry on planned development of the cities are amenable to the jurisdiction of the authorities under the Consumer Protection Act. The Supreme Court, in paragraph 5 of the said decision held as under:

5.   This takes us to the larger issue if the public authorities under different enactments are amenable to jurisdiction under the Act. It was vehemently argued that the local authorities or government bodies develop land and construct houses in discharge of their statutory function, therefore they could not be subjected to provisions of the Act. The learned Counsel urged that if the ambit of the Act would be widened to include even such authorities it would vitally affect functioning of official bodies. The learned Counsel submitted that the entire objective of the Act is to protect a consumer against malpractices in business. The argument proceeded on complete misapprehension of the purpose of Act and even its explicit language. In fact the Act requires provider of service to be more objective and caretaking. It is still more in public services. When private undertakings are taken over by the government or corporations are created to discharge what is otherwise State's function, one of the inherent objectives of such social welfare measures is to provide better, efficient and cheaper services to the people. Any attempt, therefore, to exclude services offered by statutory or official bodies to the common man would be against the provisions of the Act and spirit behind it. It is indeed unfortunate that since enforcement of the Act there is a demand and even political pressure is build up to exclude one or the other class from operation of the Act. How ironical it is that official or semi-official bodies which insist on numerous benefits, which are otherwise available in private sector, succeed in bargaining for it on threat of strike mainly because of larger income accruing due to rise in number of consumers and not due to better and efficient functioning claim exclusion when it comes to accountability from operation of the Act. The spirit of consumerism is so feeble and dormant that no association, public or private spirited, raises any finger on regular hike in prices not because it is necessary but either because it has not been done for sometime or because the operational cost has gone up irrespective of the efficiency without any regard to its impact on the common man. In our opinion, the entire argument found on being statutory bodies does not appear to have any substance. A government or semi-government body or a local authority is as much amenable to the Act as any other private body rendering similar service. Truly speaking it would be a service to the society such bodies instead of claiming exclusion subject themselves to the Act and let their acts and omissions scrutinised as public accountability is necessary for healthy growth of society.

5.   The Supreme Court again in the decision of Regional Provident Fund Commissioner v. Shiv Kumar Joshi, , considered the question as to whether the provident fund organisation is amenable to the jurisdiction of the authorities under the Consumer Protection Act. In this decision, the Supreme Court was considering the question as to whether the Regional Provident Fund Commissioner under the Employees Provident Funds and Miscellaneous Provisions Act, is providing any service to the members of the provident fund. In that decision also, the Supreme Court entered a finding that a statutory authority not invested with sovereign function while discharging its statutory functions provides service and would be liable under the Act in case of any deficiency in such service.

6-7  xxxxxxx        xxxxxxx

8.   Again, the Supreme Court considered the question as to whether officers appointed under the Registration Act and Stamp Act are rendering any services within the meaning of the Consumer Protection Act, in S.P. Goel v. Collector of Stamps, Delhi . The Supreme Court, while holding that the authorities under the Registration Act and Stamp Act perform statutory duties which are at least quasi judicial and their acts cannot amount to under the Consumer Protection Act, held in paragraphs 31 to 33 as follows:

          Xxxxxx    xxxxxxx

9-10      xxxxxx    xxxxxxx

11.      Now, we come to the important question whether the direct and indirect taxes paid to the State by a citizen constitute "consideration" for the services and facility provided to a citizen by the State. As pointed out by the Supreme Court of India in Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindro Thirtha Swamiar of Sri Shirur Mutt (supra) that "a tax is the compulsory extraction of money by public authority for public purposes enforceable by law and is not payment of service rendered.

     In Southern Pharmaceuticals and Chemicals, Trichur v. State of Kerala and Ors. , the Supreme Court after considering various decisions including the one cited above distinguished "fee" from "taxes" in these words:

     Fees are the amount paid for a privilege and are not an obligation, but the payment is voluntary. Fees are distinguished from taxes in that the chief purpose of a tax is to raise funds for the support of the Government or for a public purpose, while a fee may be charged for the privilege or benefit conferred, or service rendered or to meet the expenses connected therewith. Thus, fees are nothing but payment for some special privilege granted or service rendered.

     The same principle has again been restated by the Supreme Court in its recent decision in the Municipal Corporation of the City of Baroda v. Babubhai Himatlal reported in Judgment Today. The identical view was again reiterated by the Supreme Court in Sreenivasa General Traders v. Andhra Pradesh and Ors. (supra) where the Court observed thus:

     The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part ' of a common burden, while a fee is for payment of a specific benefit or privilege although the special advantage is secondary to the primary motive of regulation in public interest. If the element of revenue for general purpose of the State predominates, the levy becomes a tax.

12. In the light of the aforesaid pronouncements of the Supreme Court the legal position must now be taken to be well settled that unlike a "fee", a "tax" in its true nature is a levy made by the State for the general purposes of Government and it cannot be regarded as payment for any particular or special service. While, it is undoubtedly true that the Government in a welfare State is under a duty to provide various forms of facilities to citizens and the expenditure incurred thereon will have to be, met from out of the consolidated funds of the State, it cannot be said that a tax levied for the general purposes of the State continues "consideration" for any specific facility, benefit or service provided by the State.....

11.       xxxxxx    xxxxxx

12.       xxxxxx    xxxxxx

14.       The Punjab State Consumer Disputes Redressal Commission in the decision of Laxmi Narain Goel v. Punjab Water Supply and Sewerage Board and Ors. reported in (1993) III CPJ 1333, considered the question as to whether payment of house tax is consideration for hire and whether while paying such house tax payer is a consumer within the purview of the Consumer Protection Act. Relying on the decision of the National Commission in Consumer Unity & Trust Societies Act (supra) the State Commission held as follows in paragraphs 4 and 5:

4.   The learned Counsel for the complainant-appellant has vehemently argued that the members of the public pay house tax and other taxes to the Government and that the sewerage system is maintained by the Punjab Water Supply & Sewerage Board out of the revenue so secured and the payment of taxes is therefore, sufficient consideration for the service of maintenance of sewerage system. This argument of the learned Counsel misses the most essential feature of the concept of hire. The consideration for hire, be it called fee, charge or rent is that it is voluntary payment, it is open to a person to make the payment and hire the service or refuse to pay and forego the service. A tax on the other hand is a levy or imposition made by the Government for public purpose. There is no element of voluntariness in the payment of tax. No tax payer has the option to refuse to pay the tax legally imposed on him. It is, therefore, clear that the payment of tax to the Government cannot be construed as consideration for the services rendered by the Government

5.   This point has been answered directly by the National Commission in Consumer Unity and Trust Society, Jaipur v. State of Rajasthan (1991 (1) C.P.R. 241 : II (1991) CPJ 56). It has been held in that decision that the payment of taxes cannot be regarded as consideration for service rendered by the Government. The same principle applies to taxes paid to the Municipal Committee. We, therefore, agree with the conclusion of the District Forum and hold that the complainant-appellant is not a 'consumer'.

15. xxxxxx    xxxxxx

16. The Madras State Commission also came to the similar conclusion in respect of payment of house tax in the decision of The Commissioner, Mannargudi Municipality v. Consumer Protection Council, reported in (1993) I CPR 191. In that decision, the State Commission, in paragraph 5, held as follows:

...It has been pointed out by this Commission that there is an essential distinction between the consideration for hire be it called as fee, charge or rent and the payment of tax; the former is a voluntary payment and it is open to a person to make the payment and hire service or refuse to pay and forego the service. In the case of the latter, it is a levy or imposition made by the Government or the Panchayat under the Panchayat Act and there is no element of voluntariness in the payment of tax, for no tax payer has the option to refuse to pay the tax legally imposed on him. The house tax collected by the appellant/opposite party in respect of these houses of Mr. Kalyanasundaram is a tax and not a fee for any service rendered by the Municipality, in the matter of laying and maintenance of road, water supply and drainage facilities. The complainant cannot therefore be held to be a consumer within the meaning of Section 2(1)(d)(ii) of the Act and the complaint is not maintainable. The District Forum has not considered this aspect of the matter and has erred into the conclusion that the complainant is a consumer.

17. I am in complete agreement with the conclusions arrived at in the above said decisions as also the reasoning contained therein. While local bodies do certain acts as services rendered for payment of fee in respect of which there is quid pro quo coming within the purview of the Consumer Protection Act, in respect of the sovereign functions exercised by the local bodies by way of collection of taxes like property tax, profession tax and other taxes, it cannot be said that the local bodies are rendering any services, in respect of which the tax payer can maintain a complaint under the Consumer Protection Act. Therefore, in respect of payment of property tax, no complaint would lie before a Consumer Disputes Redressal Forum or Commission. Further, as held in the case of Thiruvalluvar Transport Corporation (supra), since the Kerala Municipality Act provides for a hierarchy of appellate and revisional authorities in respect of redressal of grievances of tax payers, the Kerala Municipality Act being a special law, the same would prevail over the general law of Consumer Protection Act and as such the Forum ought to have relegated the complainants to the remedies available under the Act itself instead of taking upon itself a task of deciding the complaint.

     In view of my decision that in respect of levy and demand of property tax under the Kerala Municipality Act, no complaint under the Consumer Protection Act would lie, it is not necessary to decide the question as to whether the limitation prescribed under Section 539 of the Kerala Municipality Act would apply to collection of property tax. In view of my above finding, the Consumer Disputes Redressal Forum went wrong in entertaining the complaints which ended in Ext. P3 common order. Accordingly, I set aside Ext. P3 order of the Consumer Disputes Redressal Forum, Thrissur and dismiss O.P. Nos. 463, 464, 465, 466, 467 and 468 of 2005 filed before the Forum by respondents 1 and 2 herein. The Writ Petition is allowed as above.

        The principle of law settled in the aforesaid judgments of the Hon'ble Supreme Court of India, is squarely attracted to the facts and circumstances of the present case as in the case in hand, the complainant has sought directions from this Commission to direct the OPs not to demand the property tax for the financial year 2004-05 to 2008-09 being illegal and arbitrary and to quash the notice dated 30.07.2019 and subsequently order of attachment dated 13.09.2019 vide the OPs resorted to recover the amount by attachment and  to overhaul the account etc.  Thus, there is no relationship of consumer and service provider between the complainant and the OPs. Hence, the complaint is dismissed, the complainant being not consumer of the OP.

7.     Consequently, this complaint stands dismissed, being not maintainable before this Commission. The office is directed to return the complaint along with documents annexed therewith to the complainant, after retaining its copy. The complainant is at liberty to get his grievances redressed through alternative remedy, permissible under law.
8.     Certified copy of this order be sent to the parties, free of charge, as per rules. After compliance file be consigned to record room.

Announced 14/02/2023
	Sd/- (AMRINDER SINGH SIDHU) PRESIDENT
	Sd/-
	(B.M.SHARMA) MEMBER