Tenants can be evicted for not Paying Municipal Taxes: Supreme Court [Read Judgment]

Tenants - Supreme Court of India - Taxscan

The Supreme Court has held that Tenants in Bengal can be evicted by landlords if they are not paying municipal taxes under the Calcutta Municipal Corporation Act 1980 and the West Bengal Municipal Act 1993.

While answering the Question, “Whether after the amendment of the West Bengal premises Tenancy Act by Amendment Act No. 14 of 2001 with effect from 10th July, 2001 [which had incorporated sub-section (8) to Section 5] whether a tenant who defaults in payment of his/her share of municipal tax as apportioned by the landlord would be in default of rent rendering him/her liable to eviction, the three judge bench comprising of Justice Ranjan Gogoi, Justice R. Bhanumathi and Justice Navin Sinha observed that, with the amendment of the Act with effect from 10th July, 2001 and after incorporation of sub-section (8) of Section 5 the obligation to pay the municipal tax/taxes was specifically cast on the tenant in his/her capacity as an occupier.

With the amendment made to the Act with effect from 10th July, 2001 and upon incorporation of sub-section (8) of Section 5, the obligation to pay municipal taxes as an occupier of the premises fell upon the tenant. The relevant clauses in the rent agreement therefore stood superseded by the statutory obligation cast on the tenant by the amendment to the Act.

While allowing the appeal, the bench also observed that, “the provisions of the 1980 Act make it very clear that an occupier as distinguished from the owner i.e. ‘person primarily liable’ is entitled to pre-assessment notice and to participate in the assessment proceedings and also to question the same by way of an appeal, etc. assessment of a part of the premises in occupation of a tenant or different parts of such premises in occupation of different tenants is not contemplated under the 1980 Act. Rather, from the provisions of Section 230 of the 1980 Act, it is clear that the person to be assessed to tax is the person primarily liable to pay i.e. the owner who is vested with the right to recover the portion of the tax paid by him on behalf of the tenant, if required, proportionately to the extent that the value of the area occupied bears to the value of the total area of the property. Under the 1980 Act, in the event of any default on the part of the owner to pay the tax the rent payable by the tenant(s) is liable to be attached”.

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