Supreme court: Right To Property Under Article 300A Available To A Person Who Isn't A Citizen Of India

 We say so because Article 300-A of the Constitution states that no person shall be deprived of his property save by authority of law. The word "law" is with reference to an Act of Parliament or of a State Legislature, a Rule or a statutory order having the force of law. Although, to hold property is not a fundamental right, yet it is a constitutional right. The expression person in Article 300-A covers not only a legal or juristic person but also a person who is not a citizen of India. The expression property is also of a wide scope and includes not only tangible or intangible property but also all rights, title and interest in a property. {Para 18}

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 2878 of 2024.

Decided On: 22.02.2024

Lucknow Nagar Nigam and Ors. Vs. Kohli Brothers Colour Lab Pvt. Ltd. and Ors.

Hon'ble Judges/Coram:

B.V. Nagarathna and Ujjal Bhuyan, JJ.

Author: B.V. Nagarathna, J.

Citation: MANU/SC/0128/2024.

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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

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Whether the court can frame issues placing burden of proof on Municipal Corporation to prove that it has levied property taxes by following due procedure of law?

  The application filed by the petitioner/ plaintiff to

frame the additional issue, so as to cast burden upon the

defendant to prove that the defendant levied the taxes by

following due procedure of law came to be rejected. It is the

contention of the plaintiff that the defendant has not adhered to

the procedure. In para 7 of the plaint, the plaintiff has averred

that the defendant has not followed the procedure laid down in

Chapter VIII of Schedule of the Bombay Provincial Municipal

Corporations Act. It is for the plaintiff to aver and prove as to

how the procedure has not been followed. Vide the issue sought

to be framed, the plaintiff wants to cast burden upon the

defendant. It is for the plaintiff first to aver and then to lead

evidence to the effect that the defendant has not followed the

procedure as laid down in Chapter VIII and thereafter the burden

would shift on the defendant to show that the procedure has

been followed. It is the plaintiff who is seeking the relief from

the Court and against the defendant.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY,

BENCH AT AURANGABAD

WRIT PETITION NO.1740 OF 2015

Marathwada Shikshan Prasarak Mandal Vs  The Municipal Corporation, Aurangabad

CORAM: S.V. GANGAPURWALA, J.

DATED: 23rd March, 2016.

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Supreme Court: Profit-oriented Educational Institutions not entitled to tax emption under Section 10(23C) of the Income Tax Act, 1961

 86. The conclusions of this court are summarized as follows:

a. It is held that the requirement of the charitable institution, society or trust etc., to ‘solely’ engage itself in education or educational activities, and not engage in any activity of profit, means that such institutions cannot have objects which are unrelated to education. In other words, all objects of the society, trust etc., must relate to imparting education or be in relation to educational activities.

b. Where the objective of the institution appears to be profit-oriented, such institutions would not be entitled to approval under Section 10(23C) of the IT Act. At the same time, where surplus accrues in a given year or set of years per se, it is not a bar, provided such surplus is generated in the course of providing education or educational activities.

c. The seventh proviso to Section 10(23C), as well as Section 11(4A) refer to profits which may be ‘incidentally’ generated or earned by the charitable institution. In the present case, the same is applicable only to those institutions which impart education or are engaged in activities connected to education.

d. The reference to ‘business’ and ‘profits’ in the seventh proviso to Section 10(23C) and Section 11(4A) merely means that the profits of business which is ‘incidental’ to educational activity - as explained in the earlier part of the judgment i.e., relating to education such as sale of text books, providing school bus facilities, hostel facilities, etc.

e. The reasoning and conclusions in American Hotel (supra) and Queen's Education Society (supra) so far as they pertain to the interpretation of expression ‘solely’ are hereby disapproved. The judgments are accordingly overruled to that extent.

f. While considering applications for approval under Section 10(23C), the Commissioner or the concerned authority as the case may be under the second proviso is not bound to examine only the objects of the institution. To ascertain the genuineness of the institution and the manner of its functioning, the Commissioner or other authority is free to call for the audited accounts or other such documents for recording satisfaction where the society, trust or institution genuinely seeks to achieve the objects which it professes. The observations made in American Hotel (supra) suggest that the Commissioner could not call for the records and that the examination of such accounts would be at the stage of assessment. Whilst that reasoning undoubtedly applies to newly set up charities, trusts etc. the proviso under Section 10(23C) is not confined to newly set up trusts - it also applies to existing ones. The Commissioner or other authority is not in any manner constrained from examining accounts and other related documents to see the pattern of income and expenditure.

g. It is held that wherever registration of trust or charities is obligatory under state or local laws, the concerned trust, society, other institution etc. seeking approval under Section 10(23C) should also comply with provisions of such state laws. This would enable the Commissioner or concerned authority to ascertain the genuineness of the trust, society etc. This reasoning is reinforced by the recent insertion of another proviso of Section 10(23C) with effect from 01.04.2021.

In the Supreme Court of India

(Before Uday U. Lalit, C.J. and S. Ravindra Bhat and P.S. Narasimha, JJ.)

Civil Appeal No. 3795 of 2014

New Noble Educational Society Vs Chief Commissioner of Income Tax 1

Decided on October 19, 2022

2022 SCC OnLine SC 1458

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Questions and answers on law(Part 48)

Q 1:- Whether in appeal against eviction decree Under Maharashtra rent control Act, Court should pay compensation from the date of  rent agreement or from the date of order? What is the position if eviction decree is under Transfer of property Act?

Ans:- If suit is under Rent Act then interim compensation from the date of decree.If suit under TP Act, then interim compensation at market value  from the date of determination of tenancy i.e. expiration of period of termination notice.

Read full Judgment here: Click here

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Important Judgments on Municipal Corporation(Part 5)

 

1) 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

2) When is Municipal Corporation justified to remove encroachment done on the street?

 In the light of the aforementioned four factors

being present, we are of the considered opinion that

the appellant (Commissioner) was justified in

invoking the powers under Section 314 of the Act

against the respondents on 26.05.2018 for removal

of their stalls/structures. Since the action to

remove the stalls/structures was taken under

Section 314 of the Act, it was not necessary to give

any prior notice to the respondents though a

circular was issued on 05.10.2015 requesting the

respondents to remove their stalls/structures from

the site in question.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos.17271732

OF 2019

Municipal Corporation of  Greater Mumbai  Vs Rafiqunnisa M. Khalifa

Author: Abhay Manohar Sapre, J.

Dated: February 18, 2019.

https://www.lawweb.in/2021/07/when-is-municipal-corporation-justified.html

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Important Judgments on Municipal Corporation(Part 3)

 1) Whether court can direct builder to demolish existing construction if there is subsequent changes in Environment clearance law?

Supreme Court

JUSTICE R. SUBHASH REDDY JUSTICE HRISHIKESH ROY

M/S. SAI BABA SALES PVT. LTD. Vs. UNION OF INDIA & ORS.

CIVIL APPEAL NO. 595 OF 2021

26th November 2021

Author: Hrishikesh Roy, J.

Citation: 2021 ALL SCR (ONLINE) 698

https://www.lawweb.in/2021/12/whether-court-can-direct-builder-to.html

2) Whether State or third party can permit change of user of Gouchar land contrary to its permissible use?

 It is trite to say that gouchar land can be

used only for purposes for which it is permitted

to be used. If there is a user contrary to the

permissible user, whether by the State or by any

third party, the same cannot go on.

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5135 OF 2021

RAMESHBHAI VIRABHAI CHAUDHARI Vs THE STATE OF GUJARAT 

Citation: SEPTEMBER 06, 2021.

https://www.lawweb.in/2021/11/whether-state-or-third-party-can-permit.html

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Can a charitable trust claim exemption from paying property tax if it fails to prove that said building is used entirely for charitable purposes?

Above all these aspects, petitioner has produced not even a single document to establish before this Court that the building is used for any of the purposes mentioned under section 235 of Act, 1994. I would also like to observe that grant of exemption from the payment of property tax is not an empty formality; but on the other hand such an exemption can be granted only on the owner of the building establishing before the authority that the building is used completely for charitable or such other purposes in contemplation of law prescribed under the Act 1994. Therefore, I have no hesitation to say that even if any exemption was granted to the building, that will not detain the Corporation from cancelling the same if the truth otherwise is detected. To top up the other adverse factors, petitioner has also not produced any order to show that exemption was ever granted to the building. That being the situation, I do not think the petitioner is entitled to get the benefits of section 235 of Act, 1994. {Para 17}

In the High Court of Kerala at Ernakulam

(Before Shaji P. Chaly, J.)

Panayappilly Sree Narayana Guruswami Trust Vs Corporation of Kochi

WP(C) No. 10147 of 2014

Decided on July 29, 2022

Citation: 2022 SCC OnLine Ker 3918

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

  Learned counsel appearing for the petitioners does not dispute that against the demand for property taxes, a remedy under section 406 of the Maharashtra Municipal Corporation Act, 1949 is available. However, he submitted that the remedy is not efficacious. He submits that the towers on which the taxes have been levied are neither land nor the buildings which can be subjected to payment of the property taxes. He submits that there is a breach of principles of natural justice.

4. As far as the second submission is concerned, again the

same can be gone into by the appellate authority. Hence, 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. The issues raised by the petitioners can be gone into by the appellate authority. Hence subject to what is observed above, the petition is dismissed. 

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.

Read full Judgment here: Click here

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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}

16. A perusal of the other relevant provisions of the said Act show that under Section 410 thereof, if on hearing of an appeal a question of law or construction of a document arises, the Judge may draw a statement of the facts of the case and refer such questions with his own opinion on the point for a decision of the District Court. Under Section 411 of the said Act, an appeal shall lie to the District Court from any decision of the Judge in an appeal under Section 406 thereof, by which a rateable value or capital value as the case may be is fixed or upon a question of law or usage or the construction of a document. The question whether tax is to be fixed at the rate at which the Municipal Corporation claims or it has to be nil as claimed by the respondent based on Section 132(1)(b) of the Act, can also be a subject matter of such appeal under Section 411 of the Act. Further Section 413 of the said Act provides that the decision of the District Court in an appeal under Section 411 of the Act shall be final.

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. Applying the propositions culled out by the Constitution Bench judgment of the Hon'ble Supreme Court in the case of Dhulabhai (supra), it becomes evident that the aforesaid Act, with which we are concerned in the present case, is covered under proposition Nos. 2 and 6. In the present case, there is no question of a challenge to the vires of any provision of the aforesaid Act and 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.

18. In this context, the contents of the plaint of the respondent/Public Trust need to be appreciated. The entire grievance of the respondent is that it is undertaking educational activities in the building in question and that, therefore, under Section 132(1)(b) of the said Act, it is exempt from levy of tax. It is also claimed that tax is being claimed retrospectively by the appellant/Municipal Corporation, which cannot be done. In my opinion, all these are facets of "tax fixed or charged" or the rateable value applied by the appellant/Municipal Corporation, while raising bills against the respondent/Public Trust. If the contents of the plaint are appreciated in the proper perspective, it becomes evident that there is force in the contention raised on behalf of the appellant/Municipal Corporation that the respondent/Public Trust has filed the civil suit, instead of appeal under Section 406 of the said Act, only to avoid the mandatory deposit of disputed tax claimed by the appellant/Municipal Corporation, under Section 406(2)(e) of the Act, before the appeal can be heard or decided by the Judge. Although, this aspect may not be relevant to decide as to whether the jurisdiction of the Civil Court is ousted, it does demonstrate that in such cases, by clever drafting assessees may claim that civil suit is maintainable by contending that the very levy of the tax by the Municipal Corporation is "illegal" and that there is no remedy other than filing of suit before the Civil Court. It is for the assessees like the respondent/Public Trust to demonstrate as to why the grievance sought to be raised by them cannot be addressed under the scheme manifested by the above quoted provisions of the said Act.

19. In the present case, the learned Counsel for the respondent/Public Trust has heavily relied upon the judgment of this Court in the case of Balkrishna Vora v. Poona Municipal Corporation (cited supra). In the aforesaid case, the Court was concerned with the question that the tax levied or sought to be recovered was ultra vires the powers of the Corporation. In such a situation, it was held by this Court that the machinery provided under the aforesaid Act would not be sufficient for the assessee to air his grievance and thereupon, the Court held that the jurisdiction of the Civil Court could not be said to have been ousted and that the suit was maintainable. But, in the instant case, the nature of the grievance of the respondent/Public Trust is not such that it cannot be redressed under the machinery of the aforesaid Act. Therefore, the reliance placed on the said judgment of this Court is misplaced.

 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

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

 It will be noticed from the provisions contained in Section 9 of the Code of Civil Procedure that a bar to file a civil suit may be express or implied. An express bar is where a Statute itself contains a provision that the jurisdiction of a civil court is barred e.g., the bar contained in Section 293 of the Income Tax Act, 1961. An implied bar may arise when a Statute provide a special remedy to an aggrieved party like a right of appeal as contained in the Punjab Municipal Act which is the subject matter of the present case. Section 86 of the Act restrains a party from challenging assessment and levy of tax in any manner other than as provided under the Act. A provision like this is the implied bar envisaged in Section 9 C.P.C. against filing a civil suit.  {Para 7}
8. Munshi Ram and Others vs. Municipal Committee, Chheharta [1979 (3) SCR 463] was a case under the Punjab Municipal Act itself. The Court was considering the question of bar created under Sections 84 and 86 of the Act regarding hearing and determination of objections to levy of provisional tax under the Act. In this connection it was observed:
"From a conjoint reading of sections 84 and 86, it is plain that the Municipal Act, gives a special and particular remedy for the person aggrieved by an assessment of tax under the Act, irrespective of whether the grievance relates to the rate or quantum of tax or the principle of assessment. The Act further provides a particular forum and a specific mode of having this remedy which analogous to that provided in Section 66 (2) of the Indian Income-tax Act, 1922. Section 86 forbids in clear terms the person aggrieved by an assessment from seeking his remedy in any other forum or in any other manner than that provided in the Municipal Act.
It is well recognised that where a Revenue Statute provides for a person aggrieved by an assessment thereunder, a particular remedy to be sought in a particular forum, in a particular way, it must be sought in that forum and in that manner, and all other forums and modes of seeking it are excluded.
Construed in the light of this principle, it is clear that sections 84 and 86 of the Municipal Act bar, by inevitable implication, the jurisdiction of the Civil Court where the grievance of the party relates to an assessment or the principle of assessment under this Act."
9. The Court upheld the objection regarding maintainability of the civil suit.
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.

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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}

 If the gain derived by running the institution continues to be impressed with the trust which is a charitable trust, then it is immaterial whether the institution is run as a commercial institution or not, but if in the running of the institution profits are made and the profit goes to any private individual or if the institution is intended for any private gain, then undoubtedly the running of the institution could not be considered as being run for a charitable object."

73. In Addl. C.I.T. v. Surat Art Silk Cloth Assocn., 121 ITR 1 at 24 : (AIR 1980 SC 387 at p. 401), it is observed:

"Where an activity is carried on as a matter of advancement of the charitable purpose or for the purpose of carrying out the charitable purpose, it would not be incorrect to say as a matter of plain English grammar that the charitable purpose involves the carrying on of such activity, but the predominant object of such activity must be to subserve the charitable purpose and not to earn profit. The charitable purpose should not be submerged by the profit-making motive; the latter should not masquerade under the guize of the former."

74. In view of the above rulings it would be clear that where the predominant object is to subserve charitable purpose and not to earn profit it would be a charitable purpose. 

75. We have already seen that merely because education is imparted in the school, that by itself, cannot be regarded as a charitable object. Today, education has acquired a wider meaning. If education is imparted with a profit motive, to hold, in such a case, as charitable purpose, will not be correct. We are inclined to agree with Mr. B. Sen, learned Counsel for the Delhi Municipal Corporation in this regard. Therefore, it would necessarily involve public benefit.

76. The rulings arising out of Income-tax Act may not be of great help in the Income-tax Act "charitable purpose" includes the relief of the poor, education, medical relief and the advancement of any other object of general public utility. The advancement of any other object of general public utility is not found under the Delhi Municipal Cornoration Act. In other words, the definition is narrower in scope. This is our answer to question No. 1.

81. The word "contribution" used in the proviso must also be given its due meaning. It cannot be understood as donations. If that be so, a voluntary contribution cannot amount to a compulsive donation. If the donor, in order to gain an advantge or benefit, if he apprehends that but for the contribution some adverse consequence would follow, makes a donation certainly it ceases to be voluntary.

88. There is another way of looking at the matter. The school being a separate entity, premises occupied by the school will belong to it and not to the society. Therefore, the society cannot claim to be in exclusive occupation and use of the land and building in question. In fact, the proposal for assessment sets out these aspects clearly which are extracted below:

"The first step would be to determine whether the activity in which the society is engaged is charitable or not. The charitable purpose has not been defined in the Act, but it definitely means to include only such acts as relief of the poor, medical relief to the poor and education relief. In P. C. Rajaratnam Institutions v. MCD (Civil Writ Petition No. 1764 of 1979) Division Bench of the Delhi High Court has held that to be held as charitable institutions for the purpose of S. 115(4), the society must give education relief. It was further held by the Hon'ble Court that where fees are charged, exemption cannot be granted. The scrutiny of the Income and Expenditure account of the school shows that the activity which is being carried out by the society i.e. running of school, generates positive income from year to year. Positive income in the years 1977 to 1987 ranged between 32,000/- to Rs. 3 lacs per year. 1 do not know on what criteria this activity can be called as charitable activity. The institute is being run purely on commercial lines for the purposes of profits. Even the society for which receipts and payments accounts have not been filed are in receipt of income generated from this activity in the form of building fund and donations etc. which are forced on the students and their guardians.

The figures picked up from some of the final accounts of the society show that contributions from the school to the society was Rs. 1,56,895/ - in the year ending 31-3-79, and every year thereafter the amount of contribution from school to the society has been increasing. Since the institute is not only self-supporting but also is generating positive income, I hold that the activitiy carried out by the society is not a charitable activity. The second confusion that the institute/society should be supported wholly or in part by voluntary contribution is also not fulfilled. The element of voluntary contributions comes only if there is an excess of expenditure over the receipts of the society. Even otherwise the donations received by the society if any cannot be treated as voluntary in view of the fact that they are all forced on the students/parents. The very fact that the tax payer society has claimed depreciation in the income and expenditure account of the school shows that what they are preparing is not the income and expenditure account, but a Profit

and Loss Account as is done in commercial establishments. Depreciation is not an expenditure but is only a deduction @ certain percentage of the capital assets for arriving at profits and gains of the business. In view of the foregoing discussions 1 have no hesitation to decline exemption from payment of general tax in respect of the property known as Green Field School, A-2 Block, S.J.D.A., New Delhi. Accordingly, all property taxes are payable by the tax payer."

 90. We are in entire agreement with these findings.

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

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What is presumption regarding acts done by the authorities working under the statute?

It is also a settled cannon of law that presumption of constitutionality and correctness is in favour of the legislation and not against the law enacted. It is equally true that all the acts done by the authorities working under the statute are presumed to have been done in accordance with the law unless contrary is shown. Keeping these two principles in mind and the amended provision of Section 217(5) of the Act, it is difficult for us to draw a presumption of discriminatory and arbitrary exercise of powers by the officers of the Corporation in face of clear legislative mandate. {Para 18}

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

SWATANTER KUMAR AND D.Y. CHANDRACHUD, JJ.

Peninsula Land Ltd.Vs.Brihan Mumbai Mahanagarpalika & Ors.

Writ Petition No. 395 of 2007,

24th October, 2008

Citation: 2008(6) ALL MR 519

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

66. To sum up, we answer the reference holding as under:

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.

66.3. The ratio in Sun Export case [Sun Export Corpn. v. Collector of Customs, (1997) 6 SCC 564] is not correct and all the decisions which took similar view as in Sun Export case [Sun Export Corpn. v. Collector of Customs, (1997) 6 SCC 564] stand overruled.

67. The instant civil appeal may now be placed before the appropriate Bench for considering the case on merits after obtaining orders from the Hon'ble Chief Justice of India.

Reportable

Supreme Court of India

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

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Whether occupier of property is liable to pay property tax if he files Municipal appeal?

 It is not possible to accept this submission. Section 209 as already clarified above, deals with the case of liability for payment of property taxes as far as occupiers are concerned. The bill is raised on the person primarily liable for payment of property tax. If the person primarily liable is not the occupier of the premises, then, the bill may be raised on the occupier and after it is served on him the recovery can be effected in accordance with section 199 to 209 of the MMC Act. While recovering taxes, the arrears cannot be recovered from such occupiers under section 209, if the same have remained due for more than one year. Thus, the recovery in terms of section 209 cannot be effected if the property tax has remained in arrears for more than one year. It is not possible to extend the provision and particularly sub-section 3 of 209 and read it into section 217(5) of the Act. It will be defeating the Legislative Mandate if such a reading of the provision is permitted. The word "payable" is used in sub-section 5 only to point out that after the appeal is filed the payment of property taxes which are due on the basis of the original and the increased rateable can be secured during the pendency of the appeal provided it is claimed from the appellant by issuing bills from time to time, since filing of the appeal. Therefore, to secure further sum till such time as the appeal is decided that sub-section 5 has been introduced in the Statute Book. In other words to enable and facilitate the corporation to effect recovery of property taxes levied and assessed at the original rate and to secure the claim on the basis of the revised or increased rateable value that this provision is made. Taxes are public dues and their recovery should not be hampered in any manner because challenge to the levy and assessment is pending before a court of law, is the intent in inserting sub-section (5) in the Act. That intent will be defeated if it is held that operation of this provision is controlled and restricted by section 209(3) of the MMC Act. That section serves another purpose. Once, the Legislature does not provide for any restriction and enacts the law in absolute terms full effect must be given to the provision or else the object and purpose of its insertion is defeated and frustrated. Once its introduction is understood in proper perspective, then, it is not difficult to reject the submissions of Mr.Joglekar.{Para 22}

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

S.C. DHARMADHIKARI, J.

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

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

 As far as section 217 is concerned, it provides for an appeal against the valuation and taxes and the appeal lies to the Chief Judge of Small Causes Court and there is a precondition inasmuch as the appeal cannot be entertained unless the disputed tax which is mentioned in the appeal is deposited with the Commissioner. Sub-section 5 provides for a continuing liability inasmuch as it cannot be that the appellant assessee stops paying taxes which are due and payable in respect of the property, after the appeal under section 217(1). Therefore, after the appeal is filed and, during its pendency, the disputed amount has to be deposited or else the appeal can be summarily dismissed. This is a condition attached to the statutory right of appeal. It is well settled that appeal is a right created by Statute. The Statute can regulate and control exercise of that right. It is also well settled that imposition of condition of deposit of disputed tax for entertaining and hearing of the appeal cannot be held to be onerous, excessive or arbitrary (See Sham Charan Vs. Delhi Municipal Corporation - reported in A.I.R. 1992 S.C. 2279).{Para 17}

18. An amendment in section 217 was made inasmuch as sub-section 5 as was reading prior to the amendment came to be substituted by Maharashtra Act 10 of 1998, which is already reproduced above.

19. 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

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Whether a party can challenge Validity and legality of property tax before Magistrate?

(A) Goa, Daman and Diu Municipalities Act (1968), Ss.164, 165, 115 - Scope of appeal - Validity and legality of tax - Could not be challenged before Judicial Magistrate - Scope of appeal is restricted to valuation and assessment alone.

S.115 of the Goa,Daman and Div Municipalities Act, 1968 provides for the objections which can be filed by the party aggrieved in relation to the assessment list. S.115(2) restricts the objections which can be raised by the aggrieved party to the calculation and amendment. It does not provide that levy of tax its validity or legality can be challenged thereunder. The aggrieved party is required to state the grounds on which the valuation or amendment is disputed. S.164 provides for appeals to Magistrates against any claim for taxes or other dues included in a bill presented to any persons u/s. 145 or any other provisions of the Act. The provisions of Ss. 164and 165 clearly restrict the scope of the appeal before the Judicial Magistrate and the scope is restricted to valuation and amendment alone. The filing of written objections, which are restricted to the valuation and assessment u/s. 115(2) is a condition precedent for entertaining an appeal u/s. 165 of the Act. In view of this, it is clear that in an appeal u/s. 164 of the Act, it is not open to the assessee to challenge the legality or validity of the tax itself.

(B) Goa, Daman and Diu Municipalities Act (1968), Ss.116, 115 - Procedure - Filing of objections to assessment list - Objections dealt with not by authorised Valuation officer but by Chief Officer - Held, challenge to procedure regarding levy & tax amounted to challenge to assessment itself and hence matter had to be remanded back to follow proper procedure u/s. 116. 

(C) Goa, Daman and Diu Municipalities Act (1968), S.101 - Recovery of tax - Retrospectivity - Tax cannot be recovered retrospectively and recovery would be in relation to financial year during which assessment list is duly authenticated. 

 

IN THE HIGH COURT OF JUDICATURE AT BOMBAY (PANAJI BENCH)

R.K. BATTA AND S.S. NIJJAR, JJ.

Shri Ketan Ranjit Maaganlal, Vs. Panaji Municipal Council & Ors.

Letters Patent Appeal No.2 of 1998

15th October, 1999

Citation: 2000(1) ALL MR 515

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