Important Judgments on imposition of property tax by Municipal Corporation

1)  Whether civil suit is maintainable to challenge assessment and levy of property tax on immovable property?

 10. A Division Bench of the Delhi High Court in Sobha Singh & sons (P) Ltd. vs. New Delhi Municipal Committee [34 (1988) Delhi Law Times 91] had an occasion to consider the question of maintainability of a civil suit challenging the assessment and levy of property tax by the NDMC. Sections 84 and 86 of the Act came in for consideration. It was held that the provision of appeal contained in Section 84(1) of the Act provided a complete remedy to a party aggrieved against the assessment and levy of tax. Section 86 provides that the remedy of appeal is the only remedy to a party to challenge assessment for purposes of property tax. No other remedy was available to a party in such circumstances. It follows that the remedy of civil suit is barred.

11. In view of the aforesaid position in law, we are of the considered view that the civil suit filed by respondent challenging the assessment and demand of property tax by the appellant was clearly barred. 

SUPREME COURT OF INDIA

Brijesh Kumar J.Arun Kumar J.

N.D.M.C. Vs. Satish Chand(deceased by LR Ram Chand

Appeal (Civil) 2700 of 1997

11th September 2003

Citation:  2003 ALL SCR 313,2003(4) Maharashtra Law Reporter 331.

https://www.lawweb.in/2021/11/whether-civil-suit-is-maintainable-to.html

2) Whether Educational institution running on commercial lines are entitled to exemption from payment of general tax?

Therefore, an element of public benefit or philanthropy has to be present. The reason why we stress on this aspect of the matter as if education is run on commercial lines, merely because it is a school, it does not mean it would be entitled to the exemption under Section 115(4) of the Act. {Para 66}.

SUPREME COURT

S. MOHAN AND G.N. RAY, JJ.

Municipal Corporation of Delhi Vs. Children Book Trust

Civil Appeal No. 2805 and Civil Appeal No. 228 1990 of 1980

21st April, 1992

Citation: 1992 ALLMR ONLINE 386 (S.C.),(1992)3SCC 390.

https://www.lawweb.in/2021/11/whether-educational-

institution-running.html

3) Whether burden of proof is on assessee to prove that his case comes within the parameters of the exemption clause?

66.1. Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification.

66.2. When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the Revenue.

Reportable

Supreme Court of India

Commnr. Of Customs (Import), ... vs M/S. Dilip Kumar And Company on 30 July, 2018

Author: J N.V. Ramana

 Citation:  (2018) 9 SCC 1.

https://www.lawweb.in/2021/10/whether-burden-of-proof-is-on-assessee.html

4) Whether levy of property tax can be challenged U/S 406 of Maharashtra Municipal Corporation Act?

We do not agree with the submission of learned counsel for the petitioners that the remedy under section 406 of the Act is not an efficacious remedy.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

WRIT PETITION NO.1650 OF 2014

Viom Infra Networks Maharashtra Ltd. & Anr Vs Navi Mumbai Municipal Corporation and Ors.

CORAM : A.S. OKA & A.K. MENON, JJ.

DATED : 20TH JANUARY, 2015.

https://www.lawweb.in/2022/08/whether-levy-of-property-tax-can-be.html

5) Whether the civil court has jurisdiction to entertain a challenge to property tax imposed on charitable trust?

This contention of the respondent/Public Trust can be certainly raised in an appeal under Section 406 of the said Act. The exemption claimed by it, is under Section 132(1)(b) of the said 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. {Para 15}.

17. Thus, the provisions of the aforesaid 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. The claim of the respondent/Public Trust that the notice and bills issued by the appellant/Municipal Corporation are illegal because the respondent is entitled for exemption from payment of property tax, is a question that can very well be decided in the mechanism provided as per the aforesaid provisions of the said Act.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Appeal Against Order (AO) No. 34 of 2017

Decided On: 14.02.2018

Akola Municipal Corporation Vs. Shri Akola Gujrati Samaj

Hon'ble Judges/Coram:

Manish Pitale, J.

Citation:  MANU/MH/0239/2018.

https://www.lawweb.in/2022/08/whether-civil-court-has-jurisdiction-to.html

5) Should the court summarily dismiss Municipal Appeal if the appellant fails to deposit property tax during the pendency of Municipal Appeal?

Therefore, payment of the amount of tax till the date of institution and filing of the appeal and the taxes which are due and payable during the pendency of the appeal have to be secured or else, the Corporation stands to lose by way of property tax, merely because legal proceedings are pending challenging the valuation and the assessment of the same. That would not be in public interest and that is how sub-section 5 of section 217 came to be inserted.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

S.C. DHARMADHIKARI, J.

Dena Bank & Anr. Vs. Municipal Corporation Of Gr. Mumbai & Anr.

Writ Petition No.6816 of 2010

21st July, 2011

Citation: 2011(6) ALL MR 508.

https://www.lawweb.in/2021/10/should-court-summarily-dismiss.html

Q 6:- If a person fails to pays property tax for five years. Whether municipal corporation can carry forward said tax and claim property tax for six years from said person?

Ans:- [150A of MMC Act:-  Power to assess in case of escape from assessment. - Notwithstanding anything to the contrary contained in this Act or the rules made thereunder, if for any reason any person liable to pay any of the taxes or fees leviable under this Act has escaped assessment in any year, the Commissioner may, at any time within six years from the date on which such person should have been assessed, serve on such person a notice assessing him to the tax or fee due and demanding payment thereon within 15 days from the date of such service, and the provisions of this Act and the rules made thereunder shall, so far as may be, apply as if assessment was made in the year to which the tax or fee relates.]

7)  Can the court permit the charitable trust to produce documents relating to charitable work for claiming exemption from property tax in temporary injunction application?

The petitioner could have been directed to place on record

its constitution and/or bye-laws to ascertain the object

of the trust and whether the activity is carried out for

advancement of charitable causes exclusively. It would,

therefore, be appropriate to remit the matter back to the

trial Court to decide the application for temporary

injunction afresh in the light of the aforesaid

observations.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

BENCH AT AURANGABAD

WRIT PETITION NO. 8043 OF 2020

Abhinav Manav Vikas Sanstha  Vs The State of Maharashtra 

CORAM : N.J.JAMADAR,J.

PRONOUNCED ON : 30.04.2021.

https://www.lawweb.in/2021/07/can-court-permit-charitable-trust-to.html

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