Property Lawyer: A suit challenging property tax assessment is not maintainable; SC.

Supreme Court of India

Justice L. Nageswara Rao and Justice Hemant Gupta

The issue in present case was the maintainability of the civil suit challenging order of assessment of property tax by MCD and demand of payment of property tax. The SC sets aside the judgment of DB of the High Court  by which the suit was remanded back to Single Judge to decide the question of jurisdiction. Originally, the Single Judge of the HC had rejected the plaint under O 7 R 11 CPC. The suit was held to be not maintainable by the SC. It was held by the SC {South Delhi Municipal Corporation & Anr. v. M/s Today Homes and Infrastructure Pvt. Ltd. Etc.} :

"....that the Civil Court’s jurisdiction is impliedly barred for the following reasons:

(i) There is no pre-existing liability of tax under Common Law. The liability has been created by Delhi Municipal Corporation Act along with a remedy by way of an appeal to the Municipal Taxation Tribunal. Necessarily, where a party aggrieved by the decision of the authorities has to resort to the remedy provided under the Statute, civil courts’ jurisdiction is barred.

(ii) Section 171 of the Act gives finality to orders passed by Municipal Taxation Tribunal, which shows the intendment of the legislature to exclude jurisdiction of civil courts.

(iii) The remedy provided by Section 169 of the Act is an adequate and effective remedy. We are not in agreement with the High Court that an appeal provided by the Statute against orders of assessments, containing an ‘onerous’ pre-condition of deposit of the entire amount in dispute, is not an effective remedy."

It was further held by the SC that no allegations are made in the plaint regarding the violation of any provisions of the statute and there is also no pleading with regard to non-compliance of any fundamental provisions of the statute. It was held that it is settled law that jurisdiction of the civil courts cannot be completely taken away in spite of either an express or implied bar and the civil courts shall have jurisdiction to examine a matter in which there is an allegation of non-compliance of the provisions of the statute or any of the fundamental principles of judicial procedure. It was held that a plain reading of the plaint in present case would suggest that the order impugned in the suit is at the most an erroneous order and no jurisdictional error is pleaded in the plaint, therefore, it was held by the SC that the suit is not maintainable before the Civil Court.