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2017 (2) TMI 286 - SUPREME COURT

2017 (2) TMI 286 - SUPREME COURT - TMI - Industrial area under U.P. Indusrial Area Development Act, 1976 - claim exemption from taxation - exemption under Article 12A of the 1976 Act - Held that:- Section 12A specifically contemplates issuance of notification under proviso to clause (1) of Article 243Q and exclusion from Panchayat area is consequent and dependent upon such notification. Notification under proviso to clause (1) of Article 243Q has to be subsequent to declaration of an area as ind .....

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nt area are immediately deprived of facilities and benefits extended to them by the respective Panchayats. The deprivation of the said benefits has to be thus a conscious decision in accordance with condition as contained in Article 243Q. In the case before us, it has not been pleaded that any notification referable to proviso to Article 243(Q)(1) has yet been issued. - Thus it was rightly held by the High Court that exemption under Article 12A of the 1976 Act was not available in the facts .....

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istered under the Societies Registration Act, 1860 whose members are running small industries. Zila Panchayat, Hapur initiated proceedings for realisation of tax for members of the appellant Association which was objected to and a representation was submitted to the District Magistrate. Appellant also represented the matter to the Upper Mukhya Adhikari, Zila Panchayat, Bulandshehar and filed a Civil Misc. Writ Petition (Tax) No.4 of 2013 which was disposed of by the Allahabad High Court by order .....

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tution, the Zila Panchayat/Nagar Panchayat is entitled to realise tax and appellants cannot claim exemption from taxation by local authority. Aggrieved by the order of the State Government, appellants filed a Civil Misc. Writ (Tax) No.447 of 2014 claiming the following reliefs: "A. Call for the records of the case; and issue writ, order or direction in the nature of certiorari quashing the order dated 2362014 passed by respondent No.1 (Annexure 8 to this writ petition). B. Issue writ, order .....

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udgment dated 17th July, 2014. The Division Bench of the High Court relying on an earlier Division Bench judgment in Rishipal & Ors. vs. State of U.P. & Ors., 2006 (1) AWC 426, dismissed the writ petition. The Division Bench also held that the area having not been declared as industrial township, exemption as sought to be claimed by the appellants under Section 12A of 1976 Act is misconceived. Aggrieved by the judgment of the High Court, the appellants have filed this appeal. 5. We have .....

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llants are entitled for the benefit of exemption as contemplated by Section 12A of the 1976 Act and by virtue of Section 12A no Panchayat is to be constituted for the said area. Hence, the Zila Panchayat is not entitled to realise any tax under the Uttar Pradesh Kshetra Panchayat and Zila Panchayat Adhiniyam, 1961. 7. The Authority constituted under the 1976 Act fully satisfied the condition under Section 12A of the 1976 Act, hence, there is no requirement of issue of any separate notification a .....

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der dated 23rd June, 2014 after referring to all relevant provisions of 1976 Act has found that unless industrial township is notified the provisions of Section 12A are not attracted. It has been stated by the State that no notification notifying the area as industrial township has yet been issued. Learned counsel appearing for the U.P. State Industrial Development Corporation submits that in the writ petition the appellants have only prayed for mandamus restraining respondent Nos.2 to 4 from re .....

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industrial development area which is to the following effect: Section 2(d) industrial development area means an area declared as such by the State Government by notification. 11. Under Section 3, the State Government, by notification, can constitute an Authority to be called Industrial Development Authority for industrial development area. By notification dated 5th September, 2001 which is in exercise of power under Section 2(d) of the 1976 Act, various areas as mentioned in the Schedule were d .....

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Pradesh Act, where an industrial development area or any part thereof is specified to be an industrial township under the proviso to clause (1) of Article 243Q of the Constitution, such industrial development area or part thereof, if included in a Panchayat area, shall, with effect from the date of notification made under the said proviso, stand excluded from such Panchayat area and no Panchayat shall be constituted for such industrial developmentarea or part thereof under the United Provinces P .....

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was inserted by the Constitution (Seventyfourth Amendment) Act, 1992. Article 243Q is contained in Part IX A of the Constitution dealing with Municipalities which provides as follows: 243Q. Constitution of Municipalities.( 1)There shall be constituted in every State, (a) a Nagar Panchayat (by whatever name called) for a transitional area, that is to say, an area in transition from a rural area to an urban area; (b) a Municipal Council for a smaller urban area; and (c) a Municipal Corporation for .....

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t;, "a smaller urban area" or "a larger urban area" means such area as the Governor may, having regard to the population of the area, the density of the population therein, the revenue generated for local administration, the percentage of employment in nonagricultural activities, the economic importance or such other factors as he may deem fit, specify by public notification for the purposes of this Part. 14. Article 243Q mandates constitution of a municipality in every State .....

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unicipal services being provided or proposed to be provided in that area, and (iii) such other factors as may deem fit. Thus, exemption from nonconstitution of Municipality is dependent upon consideration of aforesaid factors and a public notification thereof. 15. Section 12A has been inserted in the 1976 Act in consonance with proviso to Article 243Q( 1). Section 12A specifically provides that ....where an industrial development area or any part thereof is specified to be an industrial township .....

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om Panchayat area is consequent and dependent upon such notification. Notification under proviso to clause (1) of Article 243Q has to be subsequent to declaration of an area as industrial development area, which itself indicates that declaration of development area under 1976 Act is not sufficient to treat an area as an industrial township. As noted above, industrial township as contemplated by Article 243Q( 1) proviso has to be specifically a public notification after consideration of relevant .....

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proviso to Article 243(Q)(1) has yet been issued. The Division Bench of the High Court has also referred to and relied upon an earlier judgment of the Allahabad High Court in Rishipal (supra). In the above case, the appellants who were residents of industrial development area prayed for direction that no election for constituting Panchayat in various villages including the said industrial development area should be allowed since, notification under Section 2(d) of the 1976 Act has already been .....

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existing panchayat area. First is, specification to be an industrial township and secondly a notification under Proviso to Article 243Q of the Constitution of India. 7. From Section 12A it further reveals that if the said area is included in panchayat area, such area with effect from the date of notification made under proviso (proviso to Article 243Q) stands excluded from such panchayat. Thus, specification to be an industrial township as well as a notification under proviso to Article 243Q are .....

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anchayat area. As noted above neither it has been specified as Industrial Township nor a notification under Article 243Q has been issued. The relief claimed by the writ petitioner in the writ petition cannot be granted. 16. It shall also be relevant to refer the judgment of this Court in Saij Gram Panchayat vs. State of Gujarat and others, 1999 (2) SCC 366, where this Court had occasion to consider the proviso to Article 243Q subclause (1) in the context of Gujarat Industrial Development Act, 19 .....

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