9911796707
TMI Blog2010 (7) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... the competence of the NMMC for levy and collection of cess from the Industries in Maharashtra Industrial Development Corporation (for short MIDC) area in Thane Belapur Industrial Belt by filing Writ Petition No.2787/2001. On 22nd December, 2005 the 2nd Respondent issued demand notice of Rs. 49,733/- for the period 2005-2006 for payment of property taxes. The petitioner replied this notice on 5th January, 2006 questioning the competence of the NMMC to levy and recover the property taxes. Respondent No.2 issued notice dated 26th July, 2006 calling upon the 1st Petitioner to produce the books of accounts and demanding the payment of cess. This was replied by the 1st Petitioner on 27th July, 2006 contending that the question about the competence of the NMMC to levy and collect cess is pending in this Court and the petitioners would abide by the decision in that case. On 29th September, 2006 the 2nd Respondent issued final reminder to appear before the cess authorities alongwith the books of accounts to ascertain the cess liability. This was followed by notice dated 5th October, 2006 issued under Rule 25(3) (10) & (11) of the Bombay Provincial Municipal Corporation (Cess on entry of go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e an equally efficious alternate remedy of filing an appeal u/s.406 of the Act. He therefore prayed for dismissal of the writ petition. 5. Mr.Jain invited our attention to the judgment of the learned Single Judge of the Madras High Court in the case of Adam V/s.Income Tax Officer, Vol.XXXIII, Income Tax Reports 26, as also the judgment of the learned Singe Judge of the Karnataka High Court in the case of Karnataka Bank Limited V/s. Commissioner of Commercial Taxes, 1999 Sales Tax Cases 19. In the case of Income Tax Officer, the learned Single Judge of the Madras High Court considered the provisions of Section 46 (5A) of the Income Tax Act. The said provision reads as under:- "The Income-tax Officer may at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the assessee at his last address known to the Income Tax Officer) require any person from whom money is due or may become due to the assessee, or any person who holds or may subsequently hold money for or on account of the assessee to pay to the Income Tax Officer, either forthwith upon the money becoming due or being held at or within the time specified in the notice (not being before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This was replied by the Bank on 23rd November, 1955 stating that there was no amount with them which was payable to Mr.Adam. The learned Single Judge held that un-utilised overdraft account does not render the banker the debtor in any sense and the banker is, therefore, not a person from whom money is due to the customer. Nor is the banker in such case, a person from whom money may become due. Where the banker lends money on an overdraft and the customer is always in debit there is no stage at which the banker is debtor to the customer, nor at any point of time at which he holds any money of the customer or the later's account. In view of this, Section 46 (5A) of the Income Tax Act cannot be resorted to as a credit-freeze. This judgment was followed by the learned single Judge of Karnataka High Court in the case of Karnataka Bank Limited (supra). 6. In the present petition, the 3rd Respondent has passed the order under Rule 35 of the Rules, which reads as under:- "35. Special mode of recovery (1) Notwithstanding anything contained in any law for the time being in force or contract to the contrary, the Commissioner at any time or, from time to time, by notice in writing, a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (6) Any amount of money which a person is required to pay to the Commissioner, or for which he is personally liable to the Commissioner under this rule shall, if it remains unpaid, be recoverable as an arrears of property taxes. 7. Comparison of Rule 35 extracted herein-above with Section 46(5A) of the Income Tax Act, would indicate that similar language is employed in both the provisions. In view of this, Section 46 (5A) of the Income Tax Act cannot be resorted to as a credit-freeze. 8. We have disposed of the Writ Petition No.2787 of 2001 by holding that the MIDC area is within the municipal limits of the NMMC and consequently, having regard to the provisions of the Act, the NMMC has power and competence to levy and recover taxes, which obviously includes the cess as well. In the present case, undisputedly, the NMMC has attached the cash credit account which in other words is a overdraft facility. The un-utilised overdraft account does not render the banker the debtor in any sense and the banker is, therefore, not a person from whom money is due to the customer. Nor is the banker in such case, a person from whom money may become due. Where the banker lends money on an overd ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
