9911796707
TMI Blog2016 (7) TMI 1676X X X X Extracts X X X X X X X X Extracts X X X X ..... of "City" as defined in Section 2(8) of the Maharashtra Municipal Corporation Act, 1949 (MMC Act) or in the alternate, declaration that the MIDC is the special planning authority, in respect of such area, in view of the provisions contained in Section 40(1A) of the Maharashtra Regional Town Planning Act, 1966 (MRTP); c] The constitutional validity of Rule 41 of the Taxation Rule Vide Chapter-VIII appended to the Scheduled-D to the MMC Act imposing penalty, where cess amount is not paid within stipulated period; d] The constitutional validity of Rule 41 of the Maharashtra Municipal Corporation (Cess on Entry of Goods) Rules 1996 imposing penalty and interest on cess, where such cess is not paid within stipulated period; and e] Demands towards interest and penalty in respect of cess, which had remained unpaid or which is paid after the period stipulated. 2] On basis of the aforesaid challenges, the petitioners have applied for refund, where some amount have already been paid towards cess or for restraint in the matter of recovery of cess, interest and penalty under the provisions of the MMC Act or the Rules made thereunder. 3] Initially, Rule was granted in Writ Petition No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hallenge is primarily on the ground that the rules are ultra vires the MMC Act, inasmuch as in the MMC Act, there is no substantive provision for imposition of penalty or levy of interest upon the unpaid cess amount or where the cess amount is paid beyond stipulated period. In support of this submission, reliance is placed upon the decisions in case of State of Kerala Vs. Madras Rubber Factory [(1998) 1 SCC 616] and VVS Sugar Vs. Government of A.P. [1999 (4) SCC 192] 6] Mr. S.V. Marne, learned counsel for respondent Nos.7 to 9 and Mr. V.B. Thadani, learned AGP for the State have submitted that the issues raised in the present petitions stand substantially decided by the judgment of this Court in case of Small Scale Entrepreneurs Association and ors. Vs. State of Maharashtra and ors. [(2010) 6 Bom CR 442] The learned counsel submitted that it is impermissible for the petitioners to raise substantially the very same challenges under the guise of challenging consequential actions. Learned counsel for the respondents submitted that the challenge to Notification dated 17 December 1991, to the extent, the same includes notified area of MIDC has already been negatived by the Divisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.A. Sasi that the property taxes or cess levied by the NMMC had not been challenged in case of Small Scale Entrepreneurs Association (supra)Small Scale Entrepreneurs Association (supra) and that the challenge was only restricted to the Notification dated 17 December 1991, to the extent, the notification, whilst constituting the NMMC had included within its jurisdictional area, the MIDC's notified area, wherein, the petitioners' properties/industries are located. Once, the challenge to such inclusion came to be negatived, as a corollary therefore, the NMMC was held entitled to levy property taxes and other taxes upon the petitioners' industries, though, such industries may be stated to be located within the MIDC's notified area. Further, perusal of the decision in case of Small Scale Entrepreneurs Association (supra) makes it clear that the contentions now sought to be raised in the present petitions, had been substantially raised in case of Small Scale Entrepreneurs Association (supra). In the context of property taxes and other taxes, the contention has been reproduced in paragraph 25 and 26 in case of Small Scale Entrepreneurs Association (supra) and the same rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed thus: (v) As noted earlier, under the provisions of the MID Act, what can be levied and recovered is the fees or service charges. However, there is no provision empowering the MIDC to levy and recover the taxes. Now, coming to clause 7 of the First Schedule under the M.R.& T.P. Act, it lays down that whenever the relevant authority (MIDC in the present case) itself provides in the area within the jurisdiction of the local authority (NMMC in the present case) all or any of the amenities, which the local authority provides, the relevant authority shall not be liable to pay taxes including the property taxes, if any, but it shall be lawful to the local authority to arrive at an agreement with the relevant authority with the prior sanction of the State Government to receive the lumpsum contribution from the relevant authority in lieu of all or any of the taxes levied or services rendered by the local authority. In view of the provisions of clause 7 of First Schedule, it is the relevant authority who is exempt from payment of taxes including the property taxes. The contention of the petitioners that even the plot holders in the MIDC area are exempt and are not liable to pay the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the MIDC may arrive at an agreement with prior sanction of the State Government to receive all or any of the taxes levied or services rendered by the NMMC. This is clearly an enabling provision, which however, cannot be interpreted to mean that the plot holders in the jurisdiction of the MIDC are not liable to pay taxes." (emphasis supplied) 12] The decision in case of Saij Gram Panchayat (supra), has been duly considered by the Division Bench of this Court, holding that the principle laid down therein, in fact, militates against the contentions now sought to be raised by the petitioners. Thus, the decision in case of Saij Gram Panchayat (supra), upon its proper construction offers no assistance to the petitioners. This Court in case of Small Scale Entrepreneurs Association (supra) has further held that the provisions of MMC Act and MIDC Act and MRTP Act are required to be construed harmoniously. Thus construed, this Court did not find any substance in the contention raised by the petitioners that they were not liable to pay any taxes. This Court has in fact held that the MIDC area is the part of municipal limits of NMMC and therefore, the NMMC has the power to levy tax and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is impermissible for parties to raise challenges in installments, when it is apparent that the entire purpose for institution of Writ Petition No. 2787 of 2001 was to question the levy of property taxes or other taxes by the NMMC, insofar as the petitioners' properties/industries, which are located within MIDC's notified area are concerned. To that extent, the principles of constructive res judicata might be attracted. However, we do not propose to non-suit the petitioners upon such principle particularly as we are satisfied that even otherwise, there is no merit in the challenge as to the said rules, as raised by the petitioners. 16] Mr. Sasi, learned counsel for the petitioners, urged that Rule 41 as contained in Schedule-D to the MMC Act or Rule 41 of the Maharashtra Municipal Corporation (Cess on Entry of Goods) Rules 1996, to the extent, such rules authorised levy of penalty and interest upon the cess amount unpaid or paid beyond the stipulated date, are ultra vires the parent Act, which is MMC Act. Mr. Sasi submitted that the parent Act has no substantive provision which permits the State Government from framing rules of such nature. In the alternate, Mr. Sasi sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce with effect from 29 December 1975. Section 21 (3-D) (5) introduced by way of amendment with effect from 29 December 1975 had provided that the arrears of tax shall carry interest at such rates as may be prescribed. In this context, the Hon'ble Supreme Court held that the provisions came into force on date of commencement of the amending Act. The provisions are openended and are intended to apply upon the commencement of the amending Act with no limitation in time. There being no substantive provision in the Act for levy of interest on arrears of tax that applied to purchases of sugarcane made subsequent to the date of commencement of the amending Act, no interest thereon could be so levied, based upon application of some provision in the rules or otherwise. The position in the present case offers no parallel to the position in case of V.V.S. Sugars (supra). 21] Further, Section 454 of the MMC Act provides that the Corporation may add to the Schedule-D rules not inconsistent with the provisions of the MMC Act, which expression shall, in this section, be deemed not to include the said Schedule to provide for any matter dealt with or for any of the purposes specified in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rule shall from the date of publication of such notification have effect only in such modified form or be of no effect, as the case may be, so however, that any such modification or annulment shall be without prejudice to the validity of anything previously done or omitted to be done under that rule." 24] Mr. Marne, learned counsel for respondent Nos.7 to 9 has submitted that the Maharashtra Municipal Corporation (Cess on Entry of Goods) Rules 1996 have been enacted by the State Government by resort to special power of the State Government under Section 456A of the MMC Act. Section 456-A confers special powers of the State Government to make rules and this section opens with a non-obstanate clause, thereby, making it clear that the power of the State Government to make rules under Section 456A is not in any manner circumscribed by anything contained in Sections 456 and 456A of the MMC Act. The rules in the present cases provide for levy of interest and penalty where from cess amount is either not paid at all or paid beyond the period stipulated. There is nothing arbitrary or unreasonable in such rules. We are, in such circumstances, unable to accept the plea that the rules im ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
