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High Court Of Madhya Pradesh
U. L. BHAT, M. V. TAMASKAR
WESTERN COALFIELDS LTD. - Appellant
Versus
NOTITIED AREA COMMITTEE, DONGAR-PARASIA - Respondents
MISC. PETN. 1173 Of 1981
Decided On : 07/19/1994
TAXATION - PROPERTY TAX - NOTIFIED AREA COMMITTEE - POWER TO IMPOSE - EXTENSION OF PROVISIONS OF MUNICIPALITIES ACT - INTERPRETATION OF SECTION 7 - CESSATION OF PANCHAYAT AND ESTABLISHMENT OF NOTIFIED AREA COMMITTEE - CONTINUANCE OF TAXES IMPOSED BY PANCHAYAT - EXEMPTION OF GOVERNMENT BUILDINGS - INTERPRETATION OF EXEMPTION CLAUSE.
Fact of the Case:
The petitioner, a company owned by the Government of India, challenged two demand notices issued by the first respondent, a Notified Area Committee, for payment of house tax and lighting tax for the periods 1975-76 to 1979-80 and 1980-81. The petitioner contended that the first respondent lacked the competence to impose these taxes.
Finding of the Court:
The court held that the first respondent was competent to impose house tax and lighting tax for the period prior to 11-1-1980 by virtue of the extension of Section 7 of the M. P. Municipalities Act, 1961 to the first respondent Notified Area Committee by Annexure-5 notification dated 17-11-1975. The court further held that the first respondent was competent to impose these taxes for the period subsequent to 11-1-1980 by virtue of the extension of several Sections of the Act, including Section 127, to the first respondent by Annexure-11 notification dated 24-11-1979. The court also held that the exemption clause in Section 81 (1) of the M. P. Panchayats Act, 1962 and Section 127a of the M. P. Municipalities Act, 1961, which exempts buildings belonging to the Government of India from property tax, was not applicable to the buildings or lands of the petitioner.
Issues: 1. Whether the first respondent was empowered to impose house tax and lighting tax for the period prior to 11-1-1980? 2. Whether going by the provisions of the Panchayats Act, buildings belonging to the petitioner are leviable for house tax and lighting tax? 3. Whether the first respondent is empowered to levy these taxes for the period subsequent to 11-1-1980? 4. Whether the petitioner, being a Government owned company, is exempt from payment of these taxes?
Ratio Decidendi: 1. Section 341 (1) (a) of the M. P. Municipalities Act, 1961 empowers the State Government to impose in any notified area any tax which can be imposed there by the Council if the notified area were a Municipality. 2. Section 7 (d) of the M. P. Municipalities Act, 1961 provides that any tax imposed by the erstwhile Panchayat will continue to be in force and will be deemed to have been imposed in respect of the notified area until it is superseded or modified. 3. Section 81 (1) (a) and (c) of the M. P. Panchayats Act, 1962 imposes a tax on buildings of capital value exceeding one thousand rupees and a lighting tax, if the Gram Panchayat has made lighting arrangements. 4. Section 127 (1) (i) and (xiv) of the M. P. Municipalities Act, 1961 empowers imposition of tax on buildings called property tax and lighting tax. 5. The exemption clause in Section 81 (1) of the M. P. Panchayats Act, 1962 and Section 127a of the M. P. Municipalities Act, 1961, which exempts buildings belonging to the Government of India from property tax, is not applicable to the buildings or lands of the petitioner.
Final Decision: The petition was dismissed.
( 1 ) THE petitioner is a company whose share capital is owned by the Government of India. It owns properties situated within the Notified Area Committee Dongar-Parasia, the first respondent. Second respondent is the Chief Municipal Officer of the first respondent. Annexure-1 is a copy of the demand notice dated 18-2-1981 issued by the second respondent calling upon the petitioner to pay house tax and lighting tax for the period from 1975-76 to 1979-80. Annexure-2 is a similar notice dated 18-2-1981 issued demanded house tax and lighting tax for the year 1980-81. Petitioner has filed the writ petition challenging these two demand notices on the ground of lack of competence. At an earlier stage the writ petition was allowed on the ground that the State Government had not published any notification imposing property tax, or lighting tax in the notified area. It appears that only draft notifications were sent dawn to the committee. Respondents filed an application for reviewing the order on the ground that Area Committee is otherwise entitled to impose house tax and lighting tax. The application was allowed. We have heard the parties.
( 2 ) LEARNED counsel for the petitioner has submitted a written note today. On the basis of arguments advanced at the Bar, the following questions arise for consideration: (1) Whether the first respondent is empowered to impose housetax and lighting tax for the period prior to 11-1-1980? (2) Whether going by the provisions of the Panchayats Act, buildings belonging to the petitioner are leviable for house tax and lighting tax? (3) Whether the first respondent is empowered to levy these taxes for the period subsequent to 11-1-1980? (4) Whether the petitioner, being a Government owned company, is exempt from payment of these taxes?
( 3 ) POINT No. 1. Dongar-Parasia was originally a Panchayat governed by the provisions of the M. P. Panchayats Act, 1962. With effect from 1-12-1974, it was constituted as a notified area under Section 340 of the M. P. Municipalities Act, 1961 (for short 'the Act' ). With effect from 10-12-1982, it became class IV Municipality. It was upgraded as Class III Municipality in 1988.
( 4 ) SECTION 341 (1) (a) of the Act states that the State Government may impose in any notified area any tax which can be imposed there by the Council if the notified area were a Municipality. Section 127 (1) (i) enables a Municipal Council to impose a tax payable by the owner of houses, buildings or lands situated within the municipal limits with reference to annual letting value of the house, building or land, called property tax. There is a 'similar provision in Sec. 127 (1) (xiv) regarding lighting tax. Going by Section 341 (1) (a), property tax or lighting tax can be levied in a noted area where the State Government imposes the same. It is admitted on behalf of both the sides that the State Government has not issued any notification imposing any such tax in the notified area of the first respondent.
( 5 ) THE respondents contend that for the period prior to 11-1-1980, the notified area was competent to impose house tax and lighting tax by virtue of the provisions of Section 81 of the M. P. Panchayats Act, 1962 read with Section 7 of the M. P. Municipalities Act, 1961 and Annexure-5 notification dated 17-11-1975 issued by the State Government and published in the official gazette on 9-1-1976. ( 6 ) SECTION 341 (1) (f) of the M. P. Municipalities Act, 1961 empowers the State Government to extend to any notified area the provisions of any Section of this Act, subject to such restrictions and modifications, if any, as the State Government may think fit. By Annexure-5. In exercise of powers conferred by Section 341 (1) (f), the State Government extended the provisions of Section 7 of the Act to first respondent Notified Area and three other Notified Areas with effect from the date of publication of the notification in the gazette. The extension of Section 7 to the first respondent
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