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2019 Supreme(UK) 81
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
LOK PAL SINGH, J.
M/s Friends Glass & Glazing Pvt. Ltd. and ors. - Petitioner
Versus
State of Uttarakhand and ors. - Respondents
Writ Petition (M/S) No. 328 of 2018 With Writ Petition (M/S) No. 3273, 3276, 3278, 3289 of 2015 With Writ Petition (M/S) No. 64, 65, 66, 67, 68, 82, 108 of 2016
Decided On : 12-02-2019
Advocate Appeared:
For the Petitioners:Mr. Atul Kumar Bansal, Advocate
For the State : Mr. Yogesh Pandey, Addl. C.S.C.
For the Nagar Palika Parishad :Mr. Shiv Bhatt, Advocate
For SIDCUL :Mr. Vipul Sharma, Advocate.
For the Intervener :Mr. Davesh Bishnoi, Advocate
The court emphasized the authority of the Nagar Palika Parishad to impose property tax within its territorial jurisdiction, as notified by the State Government, and highlighted the distinction between tax and fee.
Headnote:
property tax - Jurisdiction of Nagar Palika Parishad - Article 243-Q of the Constitution of India, U.P. Municipalities Act 1916 - Section 128 of the Act
Fact of the Case:
The petitioners, private limited companies, challenged the imposition of property/house tax by the Nagar Palika Parishad, Mahuakhera Ganj, District Udham Singh Nagar, on the grounds of lack of jurisdiction and authority to impose tax.
Finding of the Court:
The court found that the second respondent had the authority to impose the tax as the area was notified as a Municipal area by the State Government, and the petitioners had concealed material facts. The court dismissed the writ petitions and imposed a cost on the petitioners.
Issues: Jurisdiction and authority of Nagar Palika Parishad to impose property tax, concealment of material facts by the petitioners.
Ratio Decidendi: The court held that the proviso to Article 243-Q of the Constitution of India did not apply as the area had been notified as a Municipal area by the State Government. It also emphasized the distinction between tax and fee, stating that the imposition of tax is by statute, while fee is for services rendered.
Final Decision: The writ petitions were dismissed, and a cost of 20,000/- was imposed on each petitioner.
1. By means of these batch of petitions, filed under Article 226 of the Constitution of India, the petitioners have challenged the imposition of property/house tax by the Nagar Palika Parishad, Mahuakhera Ganj, District Udham Singh Nagar and relief has been sought for quashing the demand notice dated 22.08.2015 and recovery citation dated 28.10.2015
2. Since, controversy involved in these batches of petitions is similar; therefore, same are being decided by common judgment.
3. Learned counsel for the petitioners would submit that since the pleading of WPMS No. 328 of 2018 is in detail, therefore, same may be considered as a leading case.
4. Factual matrix of the case are that petitioners are private limited companies, duly registered under the Companies Act, engaged in manufacturing of different items and also the members of Kumaon Garhwal Chamber of Commerce and Industry. The State Government of Uttarakhand vide notification no. 324/Industrial Section/07-industries/2005-06 dated 29.09.2005, notified the area of Nand Nagar Industrial Estate as a industrial township, also known as Nand Nagar Industrial Estate Phase I and Phase II, and granted permission to private developers, namely, Anshul Jindal and Apporv Jindal for development of industrial area, comprising of 34.29 acres of land, situated at Mahuakhera Ganj, District Udham Singh Nagar and to provide all the amenities, road etc. in the industrial township.
5. It is the contention of the learned counsel for the petitioners that in the year 2013, second respondent-Nagar Palika Parishd started imposing property/house tax over the industrial units situated in the industrial township of Nand Nagar Industrial Estate, Phase I & II. On 20.11.2013, petitioners served a notice through KGCCI to the second respondent in regard to the illegal imposition of property/house tax over the members of the industrial units, which is without jurisdiction, to which second respondent gave its reply on 10.12.2013 stating therein that second respondent has got jurisdiction to impose property/house tax over the construction raised by the petitioner. Subsequently, on 26.09.2013, second respondent-Nagar Palika Parishad issued demand notice, imposing the house tax over the petitioners’ companies and on 10.02.2015 published public notice dated 10.02.2015 in the daily newspaper Dainik Jagran mentioning therein if property/ house tax imposed is not deposited with respondent no. 2 up to 25.02.2015, then same will be recovered as arrears of land revenue.
6. The petitioners have challenged the imposition of property/house tax and recovery citation on the ground that in view of proviso to the Article 243-Q of the Constitution of India, the Municipality under this clause may not be constituted in such urban area or part thereof as the Governor may, having regard to the size of the area and the municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as he may deem fit, by public notification, specify to be an industrial township. It is contended that the Notification was issued by the State of Uttarakhand on 29.09.2005 permitting the private developer to develop an industrial area and also provide all the amenities like electricity, water and roads etc. to the industrialist. Nagar Panchayat Mahuakhera Ganj (now Nagar Palika Parishad) was constituted through Gazette Notification dated 27.02.2010 and came into existence after the Notification dated 29.09.2005, has got no jurisdiction to impose house/property tax over the petitioners’ properties situated in Nand Nagar Industrial Area Phase-I and II.
7. First respondent-State has filed its counter affidavit stating therein that His Excellency Governor of State of Uttarakhand, by virtue of powers vested under Clause (1) of Article 243-Q of the Constitution of India, vide notification dated 03.12.2015 upgraded the entire areas of Nagar Panchayat Mahuakheraganj to Municipal Council/Nagar
