Tuesday, 31 August 2021

Whether civil suit by Charitable trust challenging levy of property tax imposed by Municipal Corporation is maintainable?

Once it is found that the true nature of the grievance is such that it can certainly be raised in an appeal under section 406 of the said Act, it becomes clear that the jurisdiction of the civil Court is impliedly ousted and that the respondent/Public Trust is required to exhaust the remedy provided under the above quoted provisions of the said Act.

 21. If litigants like the respondent/Public Trust are permitted to raise grievance, that can certainly be addressed in the remedies provided under the aforesaid Act, by filing civil suits, on the basis of clever drafting, all such litigants would avoid mandatory requirements of the said Act and approach the civil Court, although a proper mechanism of grievance redressal is provided under the said Act. This aspect was not appreciated in the correct perspective by the Appellate Court while passing the impugned judgment and order.

 In the High Court of Bombay


(Before Manish Pitale, J.)

Akola Municipal Corporation Vs Akola Gujratisamaj and Others

Appeal against Order (AO) No. 34 of 2017

Decided on February 14, 2018

Citation: 2018 SCC OnLine Bom 201 : (2018) 5 Mah LJ 267 : (2018) 2 AIR Bom R 578 : (2018) 2 Bom CR 841

(a) Maharashtra Municipal Corporations Act (59 of 1949), SS. 406 and 132(1)(b) — Municipal Tax — Levy of tax on Public Trust — Validity — Jurisdiction of Civil Court — Claim by Public Trust that it is undertaking educational activities in building in question and is exempt from levy of tax under section 132(1)(b) — Can be agitated in an appeal under section 406 — Jurisdiction of Civil Court is impliedly ousted.

The exemption claimed by respondent-Public Trust is under section 132(1)(b) of the Maharashtra Municipal Corporations Act, which is a ground that can be agitated in the appeal. It is not as if the respondent/Public Trust is prohibited from raising such a ground in the appeal or that the “Judge” does not have the authority to deal with such a ground of challenge while exercising appellate power under section 406 of the said Act. The said contention of the respondent/Public Trust is covered under the expression “appeals against rateable value or the capital value as the case may be or tax fixed or charged under this Act” used in section 406 of the said Act. The provisions of the Act provide a scheme wherein the grievance of the respondent/Public Trust can be fully taken care of and, therefore, the jurisdiction of the Civil Court is impliedly ousted. 1968 (3) SCR 662.

(Paras 15, 17, 20 and 22)

(b) Maharashtra Municipal Corporations Act (59 of 1949), SS. 406 and 132(1)(b) — Ouster of jurisdiction of Civil Court — Ouster of jurisdiction can take place by an express provision in statute or impliedly — Must be decided on examination of scheme of statute in question and its analysis.

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