India, High court of Madras, Single Judge Bench, 28 April 2022, CRP(NPD) No. 1689 of 2018
Case overview
Country
Case ID
Decision date
Deciding body (English)
Type of body
Type of Court (material scope)
Type of jurisdiction
Type of Court (territorial scope)
Instance
Area
Further areas addressed
Outcome of the decision
General Summary
The petitioner’s hotel was a commercial property assessed for property tax by the respondent. The petitioner took issue with the calculation process and stated that the tax calculation provided under Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 should have been adopted during fair rent calculation instead of the Government order (G.O.Ms.No. 856). He also sought that the pandemic conditions of the hotel be considered and that the annual value rent of the property be evaluated accordingly. The Court held that its assessment for property tax was to be made by taking the actual occupancy during the lockdown period into consideration and granting benefit for the same. Otherwise, in all other aspects, the Government orders pertaining to the assessment were held to be lawful and binding on the petitioner.
Facts of the case
The petitioner owned a commercial property (hotel) that was assessed for tax. The respondent assessed the annual value on the basis of room rent excluding luxury tax. The petitioner raised objections with respect to calculating the annual value on the basis of the plinth area and the assessment of annual rental value on the basis of room rent for the different floors in the hotel. The claim of the petitioner was that Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 should have been adopted during fair rent calculation instead of the Government order (G.O.Ms.No. 856) and that the respondent should have taken the plight of the hotel during the pandemic into account when the Government prevented rooms from being let out and directed that hotels must be closed for business.
Type of measure challenged
Measures, actions, remedies claimed
Individual / collective enforcement
Nature of the parties
Claimant(s)
Private individualDefendant(s)
Public
Type of procedure
Reasoning of the deciding body
On the matter of considering the pandemic period during the tax assessment, the Court clarified that the annual rental value had to be determined from the lockdown period owing to the Covid-19 pandemic in accordance with various Government Orders which had been passed first closing down all business establishments and later permitting the opening of the Hotel with limited business activity. The assessment had to be made with due reference to March 24, 2020 when the national lockdown was announced.
As for the applicability of the government order, the Court stated that the order was indeed lawful and binding on the petitioner and that the respondent may also seek necessary documents from the petitioner for the assessment and that the petitioner shall hand over the same. The assessment of the property tax was to be done for the period in which there was no lockdown and for the earlier periods of assessment.
Conclusions of the deciding body
The civil revision petition was partly allowed and the claim was partly upheld. Assessment of the property tax was to be made by taking into consideration the actual occupancy during the lockdown period and granting benefit for the same. Otherwise, in all other aspects, the Government orders pertaining to the assessment were held to be lawful and binding on the petitioner.
Implementation of the ruling
The Government order (G.O.Ms.No. 856) was upheld.
Fundamental Right(s) involved
Fundamental Right(s) instruments (constitutional provisions, international conventions and treaties)
Rights and freedoms specifically identified as (possibly) conflicting with the right to health
- Health v. economic freedoms
- Health v. freedom to conduct a business
General principle applied
Balancing techniques and principles (proportionality, reasonableness, others)
The court used the reasonableness principle to consider that the petitioner could be given leverage for the reassessment of his property tax considering the actual occupancy during the lockdown period.
