The liability for property tax is determined by ownership at the time the tax is assessed, and new owners are not responsible for arrears incurred by previous owners.

JUDGMENT :

(Augustine George Masih, J.) :

1. This Appeal challenges the Order dated 07.07.2016 (hereinafter referred to as “Impugned Order”) in Special Civil Application No. 4577 of 2016 passed by High Court of Gujarat wherein the Appellant herein being Rajkot Municipal Corporation (hereinafter referred to as “Appellant-Corporation”) was directed to refund a portion of the property tax, which was paid by the Respondent No. 02 herein, namely, Avenue Supermarts Limited. Respondent No. 02 had assailed the demand raised by Appellant-Corporation seeking payment of property tax for the Assessment Year (hereinafter referred to as ‘AY’) 2015-16 along with outstanding arrears of such tax dues amounting to INR 2,97,02,324/- (Rupees Two Crores Ninety- Seven Lakhs Two Thousand Three Hundred and Twenty-Four Only). As a consequence to the nonfulfilment of aforesaid payment of dues by the predecessor-in-interest holder of the property, the premises were sealed on 21.03.2016 with prior indication to the Respondent No. 02.

2. The High Court of Gujarat vide Impugned Order had allowed the Special Civil Application moved by the Respondent No. 02 on the ground that the said Respondent cannot be made liable for the payment of arrears of property tax which arose prior to the acquisition of ownership, that is, prior to 03.09.2015. The High Court deprecated the approach of the Appellant-Corporation in charging exorbitant amount of dues from Respondent No. 02 as well as the uncalled inclusion of further interest and penalty on such outstanding arrears, which had already been challenged by the predecessor and had been stayed by the competent court. Considering the said circumstances, the High Court directed the Appellant-Corporation to retain a portion of the property tax to the tune of INR 14,85,000/- (Rupees Fourteen Lakhs and Eighty-Five Thousand Only) relating to the relevant AY 2015-16 for which Respondent No. 02 had acquired ownership and possession, that is, from 03.09.2015 and to refund the rest of the amount of property tax along with simple interest at 6 per cent per annum from the date of recovery till the actual payment of refund. In compliance with the aforesaid direction qua refund by the High Court, the Appellant-Corporation has already refunded such quantum of excessive property tax to the Respondent No. 02.

3. Aggrieved by the direction to make the refund of accrued amount of property tax dues, the Appellant- Corporation is assailing the Impugned Order before this Court.

4. It is the case of the Appellant-Corporation that the Impugned Order directing the refund of property tax is contrary to the provisions of Sections 139 and 140 of the Gujarat Provincial Municipal Corporation Act, 1949 (hereinafter referred to as “GPMC Act 1949”). It is argued that a Commissioner, by virtue of Sub-Civil Section (1) of Section 140 of the GPMC Act 1949, is empowered to recover such outstanding property tax dues from an occupier where a person primarily liable to pay the tax, after being duly served with demand notice, has failed to make the payment thereof. Moreover, as per Sub-Section (4) of Section 140 of the GPMC Act 1949, such occupier may credit the said payment from a person who was primarily liable to discharge the liability of such dues. Thus, it was argued that from a cumulative reading of Sections 139 and 140 of the GPMC Act 1949, the Appellant-Corporation was justified in recovering arrears from Respondent No. 02.

5. Per contra, it is contended by Respondent No. 02 that the property in question which is a commercial complex known as Shivlink-IV bearing City Survey No. 5095/1B, 5095/1C(P), Plot No. 68, situated at Gondal Road, Rajkot, was acquired via Deed of Conveyance dated 03.09.2015 from its predecessor-in-interest, that is, Respondent Nos. 04 and 05. Respondent No. 02 would be liable for the payment of property tax from the date of acquisition of ownership and not for any period before this date, as affirmed by the High Court. Respondent No