Calcutta H.C : The valuation report of the Valuation Officer made under s. 16A of the WT Act, 1957.

Counsel Appeared

Bhattacharyya, for the Petitioner : Dev, for the Respondent

JUDGMENT

TARUN CHATTERJEE, J. :

Sri Sri Radheshyam Jew, a Hindu deity located at premises No. 31, Shibnarayan Das Lane, Calcutta (hereinafter referred to as “the deity”), is the writ petitioner No. 1 and Gopal Lal Chandra, the sole shebayat of the deity is the writ petitioner No. 2 before me. They have jointly challenged the valuation report of the Valuation Officer made under s. 16A of the WT Act, 1957. Learned counsel for the Revenue took a preliminary objection as to entertainability of this writ application at this stage, as no assessment order has yet been made by the WTO in terms of sub-s. (6) of s. 16A of the Act. If this question is answered in the affirmative, then I need not go into the other questions raised by learned counsel for the writ petitioner on the question whether the valuation report submitted by the Valuation Officer could be accepted or not. In my considered opinion, the preliminary objection of learned counsel for the Revenue must succeed as I find that there is no necessity to entertain this writ application at this stage in view of the admitted fact that no assessment has yet been made by the WTO in terms of sub-s. (6) of s. 16A of the Act. For the purpose of deciding the preliminary objection as raised by learned counsel for the Revenue, the facts which are necessary are stated below :

2. The writ petitioners filed wealth-tax returns on or about 27th Nov., 1995, for the asst. yrs. 1985-86 to 1995-96 in respect of premises No. 17/1, Canal Street, Calcutta-700 014, amongst the other premises, viz., premises Nos.25 and 26, Colootola Street, Calcutta, and undivided 1/4th share in premises No. 53, Phears Lane, Calcutta. Since I am at the present stage concerned with the valuation of premises No. 17/1 Canal Street, Calcutta, I need not go into the details in respect of other premises as mentioned hereinabove. The premises No. 17/1, Canal Street, according to the writ petitioner, were requisitioned by the Government of West Bengal in 1943 and they were de- equisitioned by it in the year 1988. The writ petitioners have admitted in the writ application since the date of de- requisition the aforesaid premises were not let out to any person and they have remained under self-occupation of the deity. The premises No. 17/1, Canal Street, Calcutta700 014 (hereinafter referred to as “the said premises”), comprise one-storied building with land asuring about 29 cuttahs. On or about 11th Aug., 1995, the WTO, referred the matter to the Valuation Officer, IT Department, for making valuation of the said premises along with three other properties, viz., 25 and 26, Colootola Street, and 53, Phears Lane, Calcutta, under s. 16A of the Act. By a letter dt. 11th Aug., 1995, the Valuation Officer sought for certain particulars of the said premises, viz., lay out plan, full set up drawing, floor-wise detail of areas let out, proof of municipal tax paid, etc., from the writ petitioners. Although the writ petitioners stated in the writ application that the WTO had no jurisdiction to refer the matter to the Valuation Officer to determine the value of the said premises under s. 16A of the Act, they, however, supplied the required information asked for by the Valuation Officer by a letter dt. 20th Oct., 1995. On or about 29th Feb., 1996, the writ petitioners received a notice issued under s. 16A(4) of the Act estimating the value of the said premises. From a perusal of the estimate regarding the valuation of the said premises. From a perusal of the estimate regarding the valuation of the aid premises, it appears that the Valuation Officer determined the fair market value of the said premises on the basis of ypothetical rent capitalisation method from1985-86 and land and building method from 1989-90. After receiving the estimate, the writ petitioner made submissions before the Valuation Officer by filing a letter dt. 28th Oct., 1995, by which it was alleged that the valuation of the said premises could not be in accordance with the rules of valuation prescribed by Schedule III to the Act. Being aggrieved by the said preliminary estimate of valuation made by the Valuation Officer in respect of the said premises, the writ petitioner filed a writ application challenging the said valuation and also the jurisdiction of the WTO to make a reference to the Valuation Officer for valuation under s. 16A of the Act. The writ application was, however, disposed of by Arun Kumar Dutta (as his Lordship then was) on 21st March, 1996, by making the following directions : “Having heard the submissions of both sides and having regard to the materials on record, I dispose of the instant writ application by directing respondent No. 1 herein to make final valuation of the property in question after considering the objection already put in by the petitioners, herein, and also giving them an opportunity to put in any further objection which they may propose to put in within one week from this date and after giving them all reasonable opportunity of being heard, according to law and rules in force, by passing a reasoned order.” Subsequent to the passing of the order by this Court as aforesaid, the writ petitioners filed further objection by a letter dt. 27th March, 1996, in respect of the estimate of valuation relating to the said premises. On 24th April, 1996, the writ petitioners also sent a letter to the concerned valuer. On 30th April, 1996, the final valuation report was sent by the Valuation Officer to the writ petitioners wherefrom it appears that he valued the said premises for the period from 31st March, 1985, to 31st March, 1986, on the basis of rent capitalisation method. By moving this writ application, the writ petitioners have not only challenged the valuation report of the Valuation Officer, but also the final valuation orders dt. 18th June, 1996, in respect of premises No.26, Colootola Street, Calcutta, and also the draft aluation report dt. 28th March, 1996, in respect of premises No.23, Colootola Street.3. In the background of the aforesaid facts, let me now consider whether Mr. Dev was justified in raising the questions as referred to hereinabove that is to say hether this Court in the exercise of its extraordinary writ jurisdiction shall set aside the valuation report or the valuation order passed by the Valuation Officer in terms of s.16A(4) of the Act at the stage of valuation when the assessment order is yet to be passed by the WTO in terms of s. 16A(6) of the Act. Mr. Dev, learned counsel for the Revenue, contended that at the stage of valuation, the writ Court which shall exercise discretionary power under the Constitution shall not exercise the writ jurisdiction in view of sub-s. (5) of s. 16A of the Act which, as stated hereinabove, says clearly that on the basis of the valuation of the Valuation Officer in respect of any premises, the WTO shall pass an order of assessment in conformity with the valuation arrived at by the Valuation Officer and if any assessee is aggrieved by the Valuation Officer of the assessment, he can very well file an appeal against the said final order of the WTO. This submission of Mr. Dev was seriously contested by learned counsel for the writ petitioners. Mr. Bhattacharyya, appearing on behalf of the writ petitioners, however, contended that against the valuation report or order passed by the Valuation Officer, no appeal has been provided under the Act. Therefore, according to Mr. Bhattacharyya, in view of non-availability of any alternative remedy by way of appeal, this Court in its writ jurisdiction can certainly entertain the writ application even against the valuation report or the valuation order passed by the Valuation Officer. Mr. Bhattacharyya secondly contended that in view of the specific direction made by this Court, while disposing of the earlier writ application between the same parties to give hearing to the writ petitioners and thereafter to dispose of the valuation matter and since no personal hearing was given to the writ petitioners in compliance with the said direction of this Court, it must held that the principle of natural justice has been violated as no personal hearing was given by the Valuation Officer before making the valuation report or before making the valuation order in respect of the premises in question and, therefor5e, this Court under Art. 226 of the Constitution can invoke its discretionary power even before the final order of assessment is made by the WTO although it is open to the writ petitioner to challenge the valuation report or the order after the final order of assessment is passed by way of an appeal under s. 23 of the Act before the Dy. CIT(A). In this connection, reliance was placed on the case of Uday Kaushish vs. CWT (1982) 29 CTR (Del) 217 : (1982) 137 ITR 906 (Del) : TC 66R.227. Mr. Bhattacharyya

thereafter, relying on Sch. III, Part B, of the relevant rules, contended that since the aforesaid rules were violated in making such valuation by the Valuation Officer, the valuation report or the order must be set aside. In support of this contention, Mr. Bhattacharyya relied on two decisions, one is reported in Dilip Kumar Mitra vs. CWT (1993) 200 ITR 336 (Cal) : TC 63R.534 and the other is Bharat Hari Singhania vs. CWT (1994) 118 CTR (SC) 125 : (1994) 207 ITR 1 (SC) : TC 63R.362. Let me first consider the last submission first. In my view whether the aforesaid rules have been violated by the Valuation Officer can very well be gone into by the appellate authority and, therefore, there is no need to entertain the writ application at this stage.Let me now consider whether the first submission made by Mr. Bhattacharyya can be accepted. After a serious consideration of the submissions made by Mr. Bhattacharyya and Mr. Dev on the first question, I do not think that the submission of Mr. Bhattacharyya can be accepted. Chapter IV of the Act deals with assessment of wealth-tax. Sec. 14 of the Act contemplates filing of return of wealth by the assessee. Sec. 16 of the Act deals with the procedure for making the assessment of wealth by the concerned officer under the Act. Sec. 16A of the Act makes a provision for reference to a Valuation Officer by the WTO. Sec. 16A(1) confers power on the AO to refer the valuation of any asset to a Valuation Officer if the market value of any asset is to be taken into account in the assessment of wealth-tax under s. 16 of the Act. Sec. 16A(1) says that the AO may refer the valuation of any asset to a Valuation Officer— (a) in a case where the value of the asset as returned is in accordance with the estimate made by registered valuer, if the AO is of opinion that the value so returned is less than its fair market value;

(b) in any other case, if the AO is of the opinion— (i) that the fair market value of the asset exceeds the value of the asset as returned by more than such percentage of the value of the asset as returned or by more than such amount as may be prescribed in this behalf; or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do. Sub-s. (2) of s. 16A of the Act deals with the procedure to be adopted by the Valuation Officer for the purpose of making the valuation of any asset referred to him. Sub-s. (5) of s. 16A says that on the date specified in the notice under sub-s. (4) or as soon thereafter as may be, after hearing such evidence as the assessee may produce and after considering such evidence as the Valuation Officer may require on any specified points and after taking into account all relevant material which he has gathered, the Valuation Officer shall, by order in writing, estimate the value of the asset and send a copy of his order to the AO and to the assessee. Sub-s. (6) of s. 16A says that on receipt of the order under sub-s. (3) or sub-s. (5) from the Valuation Officer, the AO shall, so far as the valuation of the asset in question is concerned, proceed to complete the assessment in conformity with the estimate of the Valuation Officer. Chapter VI of the Act deals with appeals, revisions and references. Sec. 23(1)(ha) says that subject to the provision of sub-s. (1A), any person objecting to any order of the Valuation Officer under s. 35 having the effect of enhancing the valuation of any asset or refusing to allow the claim made by the assessee under s. 35 may appeal to the Dy. CIT(A) against the assessment or order, as the case may be, in the prescribed form and verified in the prescribed manner.From the above, it is evident that no provision has been made under the Act to file an appeal against the order of valuation made by the Valuation Officer. It is also true that the WTO in dealing with the valuation of a particular premises made by the Valuation Officer has no alternative but to pass an assessment order in conformity with the valuation report or order passed by the Valuation Officer. But, in my view, the report of the Valuation Officer in respect of any premises would be a piece of evidence on the basis of which the WTO shall pass the order of assessment. I do not think that before any order of assessment is passed on the basis of such valuation report or valuation order of the Valuation Officer under sub-s. (5) of s. 16A, it would be proper to entertain a writ application only in respect of the valuation report or the valuation order passed by the Valuation Officer. After the valuation report is sent to the WTO for assessment, the WTO shall pass a final assessment order which may be in conformity with the valuation report, but before that is done by the WTO it would not be fit and proper for the writ Court to set aside the valuation report and the order of the Valuation Officer because s. 23 of the Act clearly provides an appeal against an order passed by the WTO under s. 16A(5) of the Act and the appellate authority can very well set aside the valuation order or can cancel the valuation report on the ground that the same was not made in accordance with law or it was arbitrary or without jurisdiction as the valuation report or the valuation order shall merge with the final order of assessment. The appellate authority shall take into consideration the valuation report or the order passed by the Valuation Officer and can come to a conclusion that the valuation arrived at by the Valuation Officer was not in accordance with law or arbitrary and without jurisdiction. In that case, the appellate authority can set aside the order of assessment and send it back to the WTO for further reference to the Valuation Officer for the purpose of coming to the proper conclusion on the valuation of the premises in question.The appellate authority also can hold that in the facts and circumstances of this case, it was not open to the WTO to refer the valuation matter before the Valuation. Officer. Therefore, all the questions that need to be considered against the valuation report or the valuation order can be dealt with by the appellate authority. Therefore, in my view, there is an efficacious alternative remedy to the writ petitioner by way of an appeal against the final order of assessment in which the writ petitioners can very well challenge the valuation report as well as the valuation order of the Valuation Officer. That being the position, I am of the view that there is an efficacious alternative remedy by way of an appeal under s. 23 of the Act and, therefore, the writ Court cannot be approached at this stage. Apart from that, the WT Act provides a complete machinery for assessment of wealth-tax and imposition of penalty and for obtaining relief in respect of any order passed by the WT authorities, and, therefore, the writ petitioners cannot be permitted to abandon the procedure framed under the Act and invoke the jurisdiction of the High Court under Art. 226 of the Constitution of India when he had adequate remedy by way of an appeal to the Dy. CIT(A). In Union of India vs. Jyoti Prakash Mitter AIR 1971 SC 1093, the apex court of our country has repeatedly held that when there is an efficacious alternative remedy available to a litigant, it would not be prudent for the writ Court to entertain a writ application before such remedy is exhausted. In the similar manner, the decision in the case of Mool Chand Mahesh Chand vs. CIT 1978 CTR (All) 193 : (1978) 115 ITR 1 (All) : TC 49R.1024 and the decision in the case of Bharat Hari Singhania vs. CWT (1994) 118 CTR (SC) 125 : (1994) 207 ITR 1 (SC) : TC 66R.328, can also be referred to. Mr. Bhattacharyya, however, sought to argue that since the order of valuation was on the face of it void, it is open to the writ Court to entertain the writ application without directing the writ petitioners to avail of the alternative remedy by way of an appeal under s. 23 of the Act. In support of this contention, Mr. Bhattacharyya relied on several decisions of the Supreme Court in the case of Swadeshi Cotton Mills Co. Ltd. vs. Union of India (1981) 51 Comp Cas 210, Cantonment Board vs. Taramani Devi, AIR 1992 SC 61 : (Suppl.) 2SCC 501 and in the case of Rattan Lal Sharma vs. Managing Committee, Dr. Hari Ram (Co-education) Hr. S. School AIR 1993 SC 2155. For this purpose, I have carefully examined the valuation report as well as the valuation order. From a plain reading of the same, it cannot be said that on the face of it, the valuation report or the valuation order can be found to be void, arbitrary and without jurisdiction. The question whether the valuation report is illegal or without jurisdiction can well be taken up by the appellate authority. In this view of the matter, it would not be necessary to deal with the decisions cited on this question at all on behalf of the writ petitioners. 8. As noted herein earlier, a submission has also been made on behalf of the writ petitioners that when there is violation of the principles of natural justice, it would be open to the writ petitioner to challenge an order without exhausting the remedy of appeal available under the statute. Let me now first consider whether in the present case, the principles of natural justice have in fact, been violated by the Valuation Officer. After taking intoconsideration the materials on record. I am unable to hold that in the present case, the Valuation Officer had in any way violated the principles of natural justice. It is true that the High Court while disposing of the writ application directed the concerned Valuation Officer to afford an opportunity of hearing to the writ petitioners. But it is well settled that to give “opportunity of hearing” always cannot be meant that personal hearing must be given. From the materials on record, it appears that after the order of the High Court, a further written submission was filed by the writ petitioners in which the writ petitioners cited several decisions in support of the contention, that the valuation report or the order cannot at all stand in law or on facts. It does not appear from the record that the writ petitioners in fact, prayed before the Valuation Officer that they required personal hearing in the matter. Since a written submission was filed after the order of the High Court, which was considered by the Valuation Officer at the time of passing the order of valuation. I do not think that in the present case there was any necessity to give an opportunity of personal hearing to the writ petitioners. Therefore, I am of the view that in the present case, the principles of natural justice were not violated by the Valuation Officer and, therefore, the writ Court cannot entertain the writ application at this stage. In this connection, reliance can be placed on the cases of C.A. Abraham vs. ITO (1961) 41 ITR 425 (SC) : TC 68R.358, TC 66R.328 and CWT vs. Dr. H. Rahman (1991) 99 CTR (All) 39: (1991) 189 ITR 307 (All) : TC 66R.339. For the reasons aforesaid, I am of the view that the preliminary objection as to the entertainability of the writ application taken on behalf of the Revenue must be accepted and, accordingly, the writ petition must be dismissed on the ground of availability remedy under the Act. 9. Before parting with this order, I, however, make it clear that I have not gone into the merits as to whether the valuation report or the valuation order has been rightly passed by the Valuation Officer or not which shall beconsidered by the appropriate forum. I also make it clear that the rejection of this writ application does not mean that I have confirmed the order of the Valuation Officer on the merits. All questions relating to the valuation of the premises in question are kept open to be decided by the appropriate forum. Accordingly, the writ petition is dismissed.

10. There will be no order as to costs.

[Citation : 238 ITR 343]