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2016 Supreme(MP) 702
IN THE HIGH COURT OF MADHYA PRADESH
Sanjay Yadav, J.
M/s. Permali Wallace Pvt. Limited - Petitioner
Versus
State of Madhya Pradesh and others - Respondents
Writ Petition No. 3965 of 2005, 5962, 11337, 3965 of 2006
Decided on : 30-08-2016
Advocate Appeared:
For the Petitioners: Smt. Shobha Menon, Learned Senior Counsel with Ms. A. Khare, Learned Counsel
For the Respondent:Shri A.P. Singh, Learned Government Advocate, Rahul Mishra, Advocate
The court upheld the validity of the property tax resolution under Section 138(1-a) of the 1956 Act and justified zone-wise assessment based on Rules 3, 4, and 5 of the 1997 Rules.
Headnote:
Property Tax - Industrial Unit - Madhya Pradesh Municipal Corporation Act, 1956 - Section 138(1-a), Section 421 - Rules, 1997 - [Zone No.4, Standing Order No.12/2004, Industrial Licence, Property Tax, Annual Letting Value, Zone-wise Assessment]
Fact of the Case:
The petitioner, an industrial unit, challenged the property tax imposed by the Municipal Corporation Bhopal, claiming discrimination in tax rates and the validity of the standing order. The petitioner's alternative statutory remedy was contested by the respondents.
Finding of the Court:
The court found that the Mayor's approval of the property tax resolution was within the scope of Section 138(1-a) of the 1956 Act, and the suspension of the Corporation's meeting did not invalidate the resolution. The court upheld the application of Rules 3, 4, and 5 of the 1997 Rules for zone-wise assessment.
Issues: Validity of standing order, Competence of the Mayor, Zone-wise assessment, Applicability of property tax rates
Ratio Decidendi: The Mayor's approval of the property tax resolution was valid, and the suspension of the Corporation's meeting did not affect its legality. The determination of annual letting value in accordance with Rules 3, 4, and 5 of the 1997 Rules justified zone-wise assessment.
Final Decision: The petition and connected writ petitions were dismissed, and no costs were awarded.
Sanjay Yadav, J.
1. The order passed in Writ Petition 3965/2005 shall lead to disposal of Writ Petitions No.5962/2006 and 11337/2006 as the issue raised in these petitions are similar.
2. Validity of standing order-dated 20.4.2004 passed by Commissioner, Municipal Corporation Bhopal and order-dated 19.5.2005 passed by Zonal Officer, Zone No.8 Municipal Corporation Bhopal are being called in question.
3. Vide impugned order-dated 19.5.2005, demand has been raised to the tune of Rs.77,88,635 (in WP-3965-2005) and similar demands raised in connected writ petitions towards property tax for the year 2004-2005.
4. Petitioner, a Private Limited Company registered under the Companies Act, 1956, was allotted Factory No. DW-200209 vide the order passed by Government of India, Director General of Technical Development, New Delhi dated 26.2.1964. The petitioner was also granted an Industrial Licence bearing No. L/36(4)/7/60-L IND dated 22.2.1960. Petitioner also have a licence to work in accordance with Rule 5 of the M.P. Factories Rules, 1962 by the Government of Madhya Pradesh which, as per the petitioner, has been renewed from time to time. Besides, Office of Deputy Director, Town and Country Planning, Bhopal, issued certificate for industrial use for the occupation of petitioner.
5. That, petitioner has been subjected to Property Tax from time to time under the Madhya Pradesh Municipal Corporation Act, 1956 (hereinafter referred to as 1956 Act') as is imposed by the Municipal Corporation Bhopal.
6. That, for the period 1998-2000, petitioner deposited an amount of Rs.34,519/- towards property tax. Vide notice dated 10.9.2004, petitioner was called upon to deposit an amount of Rs.19,36,669/- as property tax. Petitioner preferred an appeal in accordance with Section 149 of 1956 Act to the competent authority i.e. District Judge Bhopal on 15.9.2004 against said demand on the ground that petitioner being an industrial unit cannot be made to pay the property tax as compared with other commercial establishments. The claim was denied by respondent-Municipal Corporation on the ground that since petitioner unit falls under Zone No.4, the tax is realized in accordance with Standing Order No.12/2004. The Appeal was disposed of on 7.2.2005 directing the Municipal Corporation to consider the objections raised by the petitioner and take a decision thereon after affording an opportunity of hearing.
7. On the representation being filed by petitioner that it be treated at par with other industrial units of the adjoining area. And, that it is not carrying out any commercial activity and, therefore, it be assessed in accordance with the factories situated in Govindpura Area i.e. Ward Nos.56 and 63 respectively. That, being a Medium Scale Industry and being located over free-hold land used for industrial purpose, the property tax for the building be assessed in accordance with the rates as made applicable to other industries.
8. The claim was turned down vide impugned communication dated 19.5.2005 that since petitioner's unit is located in Ward No.45 the rates prevalent therein (and not that of Ward No.56 and 63) would be applicable.
9. These facts have led the petitioner question the resolution and the rejection order.
10. It is contended that the property tax is realized from the petitioner as per rates applicable in Zone No.4 in accordance with the impugned Standing Order No.12/2004 dated 20.4.2004. It is the contention that the impugned standing order is illegal and invalid inasmuch as the same though is in exercise of powers under sub-section (1-a) of Section 138 of 1956 Act, but a draft resolution passed by the Corporation was suspended by the State Government in exercise of its powers under Section 421 of 1956 Act. In the wake thereof, it was beyond the competence of the Mayor to have invoked subsection (1-a) of Section 138 of 1956 Act.
11. It is next contended that being an industry, though situated within Zone No.4 and Ward No.45, it cannot be discri
