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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION No 812 of 1998
with
SPECIAL CIVIL APPLICATION No 4859 of 1991
WITH
SPECIAL CIVIL APPLICATIONS NOS.2214/1997,
2161/2000, 1773/2001, 11439/2001,
7537/1998, 2990/1999
AND
SPECIAL CIVIL APPLICATION NO. 12090/2000
For Approval and Signature:
Hon'ble MR.JUSTICE R.K.ABICHANDANI
and
Hon'ble MR.JUSTICE KUNDAN SINGH
============================================================
1. Whether Reporters of Local Papers may be allowed : YES
to see the judgements?
2. To be referred to the Reporter or not? : YES
3. Whether Their Lordships wish to see the fair copy : NO
of the judgement?
4. Whether this case involves a substantial question : NO
of law as to the interpretation of the Constitution
of India, 1950 of any Order made thereunder?
5. Whether it is to be circulated to the concerned : NO
Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals?
--------------------------------------------------------------
UNION OF INDIA DY.ACCOUNTANT GENERAL
Versus
RAJKOT MUNICIPAL CORPORATION
--------------------------------------------------------------
Appearance:
1. Special Civil Applications Nos. 812/1998, 2161/2000,
1773/2001, 1773/2001, 11439/2001 & 12090/2000
MS. P.J. DAVAWALA for Petitioner
MR. A.K. CLERK for Respondents
2. Special Civil Application No. 4859 of 1991
MR. BIPIN I MEHTA for Petitioners
MR. P.M. THAKKAR for Respondent No. 1 - 2
MR M.G.NAGARKAR for Respondent No.3
3. Special Civil Application No. 2114 of 1997
MS. P.J.DAVAWALA for Petitioner
MR. A.J. PANDYA for Respondent No.1
TANNA ASSOCIATES for Respondent No.2
4. Special Civil Application No.7537 of 1998
MR. A.H. MEHTA for the Petitioner
MR. J.R.NANAVATI for Respondent No.2
5. Special Civil Application No. 2990 of 1999
MS. VASAVDATTA BHATT WITH MR. A.H.MEHTA for
the petitioner
MR. A.K.CLERK for the Respondents
--------------------------------------------------------------
CORAM : MR.JUSTICE R.K.ABICHANDANI
and
MR.JUSTICE KUNDAN SINGH
Date of decision: 19/09/2002
ORAL JUDGEMENT
(Per : MR.JUSTICE R.K.ABICHANDANI)
1. In this group of matters which are filed by the
Union of India, the demand notices and bills for recovery
of service charges in lieu of taxes issued by the
Municipal Corporations have been challenged. The
question raised before us by the petitioner - Union of
India is whether in view of the immunity from taxes
granted under the provisions of Article 285(1) of the
Constitution of India, these Corporations can issue such
bills and demand notices or take coercive measures
against the property of the Union of India for recovery
of property taxes or service charges in lieu of such
taxes.
2. The aforesaid question is raised, because, in
eight of these matters, Rajkot Municipal Corporation had
issued such demands for recovery of such service charges
in respect of properties of the Union of India housing
the offices of the Accountant General, Rajkot, Post
Offices and the Railway, and, in the remaining matter,
the Jamnagar Municipal Corporation had raised similar
demand for the Railway property.
3. Special Civil Applications Nos. 812 of 1998,
12090 of 2000 and 11439 of 2001 have been filed by the
Union of India through the Deputy Accountant General,
Rajkot. In Special Civil Application No. 812 of 1998,
the petitioner has challenged the bill dated 20th October
1997, at Annexure "A" to that petition, issued by the tax
Officer of the Municipal Corporation for a total sum of
Rs.14,66,640=00 in respect of the property occupied by
the office of the Accountant General, at Rajkot. The
petitioner also challenges the order dated 29-1-1998, at
Annexure "C" to the petition, restraining the petitioner
from dealing with the property since attachment warrant
was issued in respect thereof for recovery of the
aforesaid dues. The order was made under Rule 45(1) of
Chapter 8 of the Schedule to the Bombay Provincial
Municipal Corporation Act, 1949. The impugned bill at
Annexure "A" recited that it was issued in respect of the
property tax and water tax under Rules 39 and 40 of the
Schedule of Chapter 8 of the said Act. It appears from
the statement attached to that bill that it was prepared
on the basis of the property tax dues calculated from
1955-1956 upto 1997-1998 with general tax on property and
conservancy tax as the components. Special Civil
Application No. 12090 of 2000 also relates to the same
property of the Accountant General's office, Rajkot. The
bill impugned therein at Annexure "A" to the petition
(Bill No. 125101) was for the year 2000 - 2001 and it
was for a total sum of Rs.11,90,152=00 inclusive of the
arrears mentioned therein for service charges. Special
Civil Application No. 11439 of 2001 is filed by the
petitioner in respect of the property occupied by the
office of the Accountant General, Rajkot and bill at
Annexure "A" for the year 2001 - 2002 demanding a total
amount of Rs.13,14,656=00 inclusive of the previous dues
by way of service charges, is challenged in that
petition.
3.1 Special Civil Application No. 2990 of 1999 has
been filed by the Union of India in respect of the
property of the Western Railway rendered for which the
Rajkot Municipal Corporation issued a demand notice at
Annexure "A" to the petition demanding a sum of
Rs.16,26,49,575=00 as service charges from the Divisional
Manager, Western Railway, Rajkot in respect of the
property mentioned therein for which bill No. 18/5682
was received by the petitioners office on 18-2-1999, and
the said amount included arrears from 1-4-1954.
3.2 Special Civil Applications Nos. 2161 of 2000 and
1773 of 2001 have been preferred by the Union of India in
respect of the property occupied by the Post Master
General, Rajkot, challenging the demand notices, issued
by the Rajkot Municipal Corporation for the property in
question, for a sum of Rs.23,84,060=00 and the order
attaching the property and instructing the Senior Post
Master not to deal with the property so attached. The
demand notice and the order restraining the petitioner
from dealing with the property challenged in Special
Civil Application No. 2161 of 2000 are at Annexure "A"
and "B' to the petition, and similar orders for the
subsequent years which included the arrears, for the
recovery of the dues of the Corporation, are challenged
in Special Civil Application No. 1773 of 2001 at
Annexure "A" and "B" thereto.
3.3 Special Civil Application No. 4859 of 1991 is
also filed by the Union of India in respect of the
property occupied by the office of the Post Master
General, at Rajkot challenging the order dated 17-7-1991
at Annexure "A" to that petition, intimating the
petitioner that his property was attached and if the
amount was not paid in five days, it would be sold. The
demand notices dated 28th June 1991 have also been
challenged in that petition, which are at Annexure "G"
collectively. All these notices were issued by the
Rajkot Municipal Corporation.
3.4 Special Civil Application No. 2114 of 1997 has
been preferred against the Rajkot Municipal Corporation
again in respect of the property occupied by the office
of the Post Master General challenging the demand notices
dated 11th September 1996, at Annexure "A" to the
petition and the order dated 23rd February 1997, at
Annexure "B" to the petition, and the order dated 23rd
February 1997 at Annexure "B" to the petition, for
recovery of Rs.21,97,996=00 from the petitioner towards
service charges in respect of the property in question.
4. Special Civil Application NO. 7537 of 1998 has
been filed by the Union of India in respect of the
property occupied by the Railways at Jamnagar challenging
the demand notice issued by the respondent - Jamnagar
Municipal Corporation and received by the petitioner's
office on 24-6-1998, at Annexure "A" and "B" to the
petition, demanding a total amount of Rs.8,61,87,780=00
by way of service charges in lieu of the property taxes
in respect of the property in question. The demand
notice at Annexure "A" to that petition, dated 24-6-1998,
referred to general tax and conservancy tax, as also
education cess and the petitioner was warned that if the
amount of Rs.99,043=00, which included penalty for the
tax due till 31st March 1998, was not paid, attachment
warrant will be issued. The notice at Annexure "B" to
the petition dated 24-6-1998 was for the years 1992-93 to
1997-98 demanding the aforesaid amount of
Rs.8,61,87,780=00 in respect of the properties mentioned
therein. In the communication at Annexure "C" dated 28th
April 1998, the respondent - Municipal Corporation,
Jamnagar required the Divisional Railway Manager, Rajkot
to pay up the said amount of service charges in lieu of
the property tax within 15 days.
5. The case of the Union of India in all these
matters is that the respondents - Municipal Corporations
cannot recover any tax including property tax or service
charges in lieu of the property tax, as is sought to be
done by them in respect of these properties, in view of
the exemption granted by Article 285(1) of the
Constitution of India. According to the petitioner, it
was not challenging the bills as such, but was
challenging the authority of the respondent -
Corporations to issue such demand notices and coercive
orders for recovery of taxes on the property belonging to
the Union of India or service charges in lieu of such
taxes under the provisions of the Bombay Provincial
Municipal Corporation Act. According to the petitioner,
by using the nomenclature "service charges", the nature
of coercive recovery which was tax in respect of the
property did not change. It was submitted that so far as
the property occupied by the railway is concerned, there
was no notification issued under section 184(1) of the
Railways Act, 1989, which corresponded to section 135(1)
of the Act of 1890. According to the petitioner, there
was also no contract as contemplated by sub-section (4)
of section 184 of the Railways Act, 1989. Therefore,
even in respect of the property occupied by the Railway,
the respondent - Corporations could not have effected any
recovery by way of service charges in view of the
provisions of Article 285(1) of the Constitution of
India.
5.1 Reliance was placed on behalf of the petitioner
on the decision of Hon'ble the Supreme Court in case of
Union of India v. Purna Municipal Council, reported in
AIR 1992 SC 1597, in which, the Supreme Court in respect
of similar demand notices issued by Municipal Council,
Purna claiming service charges in lieu of tax for the
period from 1954 to 1960, held that the view expressed by
the High Court that the properties continued to be liable
to taxes under Article 285(2) was erroneous. Allowing
the appeal, the Supreme Court issued a direction in
favour of the Union of India restraining the respondent
Municipal Council from raising demands on the Railway in
regard to service charges.
5.2 Reliance was also placed on the decision of the
Supreme Court in Union of India v. Ranchi Municipal
Corporation, reported in (1996) 7 SCC 542 in which the
Supreme Court, considering the question of validity of
demand by Ranchi Municipal Corporation of service charges
and following the Purna Municipal Council case, held that
section 135 of the Railways Act, 1890, was subject to the
provision of Article 285 of the Constitution. Therefore,
the respondent municipality was restrained from demanding
any payment by way of service charges from the Railway.
It was held that the municipality had no right to demand
service charges from the Union of India, and such demand
made by the municipality was clearly ultra vires its
power. When the Supreme Court was pointed out that, in
earlier Writ Petition No. 2844 of 1992, the Patna High
Court had held that the demand on account of service
charges was not demand of tax on the property of the
Railway and that it was liable to pay the service
charges, against which leave was refused and the Special
Leave Petition was dismissed on the ground of gross
delay, the Supreme Court held that it was settled law
that such summary dismissal of Special Leave Petition did
not constitute res judicata for deciding the controversy.
It would thus be clear that notwithstanding the earlier
summary dismissal of the Special Leave Petition filed
against the judgement and order of the Patna High Court
in Writ Petition No. 2844 of 1992, the Supreme Court
holding that the controversy was no longer res integra,
in terms, held that the municipality had no right to
demand service charges from the Union of India and that
such a demand was ultra vires its power.
5.3 Reliance was also placed on the decision of the
Supreme Court in Union of India v. The City Municipal
Council, reported in AIR 1978 SC 1803 for the proposition
that the property of the Union was exempt from all taxes
imposed by State or by any authority within the State
under Clause (1) of Article 285 unless the claim can be
supported and sustained within the four corners of clause
(2) of Article 285.
6. The respondent - Corporations have taken up a
stand that service charges were payable by the
petitioner. In the affidavit-in-reply of the Jamnagar
Municipal Corporation filed in Special Civil Application
No. 7537 of 1998, it is contended in paragraph 1.2 that
service charges were payable and the impugned action
could be taken under the provisions of the Bombay
Provincial Municipal Corporation Act. In paragraph 2 of
the affidavit-in-reply, it is in terms contended that the
properties of the petitioner which are within the
municipal limits were liable to municipal taxation in
accordance with law. It is stated that the respondent
corporation provides all facilities to the petitioner as
are being provided to the other residents of the
Corporation and therefore, the petitioner was liable to
pay municipal taxes including service charges to the
respondent corporation. According to the respondent
corporation, it was entitled to recover service charges
in lieu of the property taxes in respect of the railway
properties as per the notification of the Government of
India, dated 29th March 1967. It is stated that, under
the development plan, 30 meters wide road is passing
through the petitioner's land and the respondent
corporation had provided that public road in public
interest.
6.1 In the affidavit-in-reply filed by the Rajkot
Municipal Corporation in Special Civil Application No.
812 of 1998, it has been stated in paragraph 4 that the
petitioner was explained the calculation of the rateable
value and the calculation of the service charges over and
over again and that the calculation of rateable value was
based upon the information about the property supplied to
the Corporation by the petitioner. According to the
respondent corporation, the action was in consonance with
the circulars issued by the Ministry of Finance and that
the other properties of the Union of India occupied by
Air India Radio, Doordarshan Kendra, Telecommunications
etc. were subjected to service charges by the
Corporation. It is stated that, ascertaining the amount
of service charges and levying and recovering the same is
an administrative process for which the respondent
Corporation and its authorities are fully empowered under
the provisions of the Act. The service charges were
calculated at the rate of 75% of the general tax (house
tax) and conservancy tax payable by private individuals.
7. The learned Senior Counsel and other counsel
appearing for the respondent - Corporations contended
that the demands raised by the Corporations were in
consonance with the circular letters of the Central
Government issued in 1954 and 1967 which allowed the
Corporations to collect service charges in respect of the
properties of the Union of India. It was submitted that
the Central Government had agreed to pay, by way of
contribution to the local bodies such service charges and
it was now estopped from resiling from its commitment.
It was submitted that the question of applicability of
Article 285 did not arise, because, the Central
Government itself had in its declaration stated that
service charges would be paid notwithstanding the
provisions of Article 285. The character of such
liability arising because of such declaration on the part
of the Central Government was different and it entitled
the Corporations to raise demands for service charges and
recover the same in accordance with the provisions of the
Act. It was also contended that so far as the railway
properties are concerned, the circular letters issued by
the Central Government in 1954 and 1967 constituted a
contract which enabled the municipal corporations to
recover service charges as contemplated by those circular
letters. It was finally contended that the service
charges were recoverable by way of compensation by the
municipal corporations from the petitioner on the basis
of there being a quasi-contract and therefore, the
respondents corporations were justified in issuing the
demand notices and attempting coercive recoveries of
their dues.
7.1 In support of their contentions, the learned
counsel relied upon the following decisions :
[a] The decisions of the Supreme Court in Food
Corporation of India v. The Sub-Collector,
Narsapur, reported in AIR 1999 SC 2521 and in
Food Corporation of India v. Municipal
Committee, Jalalabad, reported in AIR 1999 SC
2573 were cited to point out that the Supreme
Court held that the Food Corporation of India
cannot claim exemption from taxation under
section 285 of the Constitution, because, it was
a distinct entity from the Central Government.
[b] The decision of the Supreme Court in Board of
Trustees for the Visakhapatanam Port Trust v.
State of Andhra Pradesh, reported in AIR 1999 SC
2552 was cited to point out that the Supreme
court, in the context of the property of the
Board of Trustees of Visakhapatanam Port Trust,
held that the Board was not exempt from taxation
under Article 285 on the ground that the property
was that of the Union of India. It was held that
the Board was distinct from the Union Government
and it could not claim exemption from taxation
under Article 285 of the Constitution.
8. Chapter XI of the Bombay Provincial Municipal
Corporation Act, 1949 relates to municipal taxation.
Property taxes are referred to in section 127(1)(a) which
the Corporation is empowered to impose. The property
taxes comprise water tax, conservancy tax, general tax
and betterment charges as provided by section 129 of the
said Act and these can be levied on buildings and lands
in the City subject to the exceptions, limitations and
conditions provided in the Act. Section 130 provides for
levy of water tax in respect of premises referred to
therein, while section 131 provides that conservancy tax
shall be levied on the premises indicated therein.
General tax is leviable under section 132 in respect of
all buildings and lands, as stated therein. Under
section 132(1), the general tax is not payable on
buildings enumerated thereunder, which include buildings
and lands vesting in the Government used solely for
public purposes. So far as the State Government is
concerned, section 133(1) provides for payment to be made
to the Corporation in lieu of general tax by the State
Government, for which the buildings and lands vesting in
it are exempt by clause (c) of sub-section (1) of section
132. There is no similar provision for the Central
Government. Under section 135, if, in respect of
premises used solely for public purposes and not used or
intended to be used for purposes of profit or for
residential, charitable or religious purposes, water tax
would be leviable under this Act from the Government, the
Commissioner, in lieu of levy such tax, shall charge for
the water supplied to such premises, by measurement, at
such rate, as shall be prescribed by the Standing
Committee.
8.1 Chapter VIII of the Schedule to the said Act,
which contains Taxation Rules, provides for collection of
taxes, and Rules 40, 41 and 42 lay down the procedure for
recovery of taxes by issuance of bill, the notice of
demand and distress or attachment. The impugned demand
notice and orders clearly show that the Corporations have
exercised their powers of coercive recovery of taxes
under the said Act and the Rules.
9. Article 285 of the Constitution which is invoked
by the Union of India in all these petitions, reads as
follows :
"285. Exemption of property of the Union from
State taxation :-
(1) The property of the Union shall, save in
so far as Parliament may by law otherwise
provide, be exempt from all taxes imposed
by a State or by any authority within a
State.
(2) Nothing in clause (1) shall, until
Parliament by law otherwise provide,
prevent any authority within a State from
levying any tax on any property of the
Union to which such property was
immediately before the commencement of
this Constitution liable or treated as
liable, so long as that tax continues to
be levied in that State."
9.1 It will be noticed that, under Article 285(1),
there is an exemption in respect of the property of the
Union from all taxes imposed by a State or by any
authority within a State. The Municipal Corporation
would be an authority within a State and therefore, even
a Municipal Corporation cannot impose taxes on the
property of the Union which may be within its limits
unless law made by the Parliament otherwise provides.
The words "save in so far as Parliament may by law
otherwise provide" clearly rule out any method short of
enacting such law by the Parliament for taking away the
exemption conferred by Article 285(1) from all taxes
imposed by a State or by such authority within the State.
So far as the premises occupied by the Postal Department
and the Accountant General are concerned, it is not even
urged that there is any law made by the Parliament taking
away the exemption, from taxes by the State or any
authority within the State, which has been granted in
respect of the properties of the Union.
9.2 On the basis of the provisions of section 135(1)
of the Railways Act 1890, it was sought to be contended
that the readiness of the Central Government in the
communications dated 10th May 1054 and 29th March 1967 to
pay service charges equivalent to 75% of the property tax
realised from private individuals, where the services are
availed of by the Central Government, should constitute
sufficient authorization to the respondents corporations
to raise such demands and effect the recovery of service
charges in lieu of taxes. Admittedly, there has been no
notification issued under section 135(1) of the Railways
Act 1890 or under section 184(1) of the Railways Act,
1989, declaring the railway administration to be liable
to pay the taxes. Nothing short of such notification can
create such liability, because, the extent of liability
will be determined by the provisions made by the
Parliament, as contemplated by Article 285(1), and when
the provision of law made by Parliament i.e. section
184(1) of the Railways Act 1989, lays down that it is
only by way of notification in official gazette that the
railway administration can be declared to be liable to
pay the taxes, the exemption could be taken away only
when such notification is issued and published in the
official gazette and not otherwise. Section 184(1) of
the Act of 1989 refers to such notification, which has
been defined by section 2(26) so as to mean a
notification published in the official gazette.
Admittedly, no such notification has been published in
any official gazette in respect of the properties of the
railways declaring the railway administration to be
liable to pay any specified tax. Therefore, the railway
administration cannot be made liable to pay any tax in
aid of the funds of any local authority as laid down by
the first part of section 184(1) of the Railways Act,
1989, as also on the basis of the provisions of Article
285(1) of the Constitution.
9.2 In The Union of India v. Bhusawal Municipal
Council, reported in AIR 1982 BOM. 512, a Division Bench
of the Bombay High Court, construing the provision of
section 135 of the Railways Act 1890, held that, under
that section, unless the Railway Administration is
expressly declared as being liable to pay a tax, that tax
cannot be levied on the Railway Administration. Such
declaration has to be by a notification issued by the
Central Government.
9.3 In The Municipal Corporation of Greater Bombay v.
Akbar S. Sarela, reported in AIR 1990 BOM. 141 (decided
on 13th February 1959), a Division Bench of the Bombay
High Court, in context of the provisions of section 135
of the Railways Act 1890, held that, in order to attract
the provisions of sub-section (2) of section 135, not
only must there be a notification of the Central
Government under sub-section (1) of section 135, but
there must be a liability upon the Railway Administration
to pay a tax by virtue of the notification. It is only
when the Railway Administration is made prima facie
liable to pay a tax to a local authority that it can
approach the appropriate authority for determining the
quantum of such liability.
9.4 In Union of India v. Commr. of Sahibganj
Municipality, reported in AIR 1973 SC 1185, the Supreme
Court held that since there was no law providing for
taxation of Railway property and since the 32 blocks of
buildings were not in existence before April 1, 1937
(when Part III of the Government of India Act came into
force) or before commencement of the Constitution, the
buildings were not liable to pay any tax, by virtue of
Article 285. The 32 blocks of buildings vested in the
Union, some of them after April 1, 1937, and some after
the Constitution came into existence. It was held that
these properties could be made liable to pay tax to the
Municipality only if Parliament by law provided to that
effect.
9.5 In Union of India v. City Municipal Council,
reported in AIR 1978 SC 1803, it was held that the
exemption from all taxes given to the property of the
Union under clause (1) of Article 285 was subject to the
exception in clause (2) of Article 285 where such
property was exigible to tax immediately before the
commencement of the Constitution. The advantage of this
exception can be claimed only if (1) it is "that tax"
which continues to be levied and no other, and (2) the
local authority in "that State" claims to continue the
levy of the tax. In other words, the nature and the type
of tax and the property on which the tax was being levied
prior to the commencement of the Constitution must be the
same as also the local authority must be of the same
State to which it belonged before the commencement of the
Constitution. But in both these cases, under clause (1)
and clause (2), Parliament may make a law withdrawing the
exemption from imposition or the exception giving the
right to impose.
9.6 The word "Taxation" as defined in Article 366(28)
of the Constitution includes the imposition of any tax or
impost, whether general or local or special, and "tax"
shall be construed accordingly". Though it is not an
exhaustive definition and only shows what is included in
the word one is struck immediately by the width of its
language. Though it speaks of any tax or impost, it goes
a step further and adds "whether general, or local or
special", indicating thereby that no special or local
considerations are relevant and even a general
non-discriminatory levy must be regarded as taxation.
(See In re SEA CUSTOMS ACT, reported in AIR 1963 SC
1760). "Tax" would include also "rates" and other
"charges" levied by local authorities under statutory
powers. (See D.G.Gouse & Co. (Agents) Pvt. Ltd. v.
State of Kerala, reported in AIR 1980 SC 271). Thus,
unless the Parliament makes law as contemplated by
Article 285, exemption from taxes which include service
charges in lieu of taxes granted under that provision,
cannot be taken away.
10. The argument that the provision of sub-section
(4) of section 184 of the Railways Act, 1989 should be
invoked for holding that the Corporations were enabled by
the aforesaid communications of 1954 and 1967 to recover
service charges has no basis, for the simple reason that,
admittedly, there has not been entered into any contract
with the local authorities as contemplated by section
184(4) of the Railways Act 1989, and there cannot be any
implied contract spelt out from the unilateral
communications from the Central Government showing
readiness to pay by way of compensation for specified
services which are specifically rendered to the premises
of the Union Government. Under sub-section (4) of
section 184, it is provided that, nothing in this section
shall be construed to prevent any railway administration
from entering into a contract with any local authority
for the supply of water or light, or for the scavenging
of railway premises, or for any other service which the
local authority may be rendering or be prepared to render
to the railway administration. Obviously, this provision
speaks of contract in respect of particular service
specially provided to the railway administration and has
no application to the general taxes leviable under the
Bombay Municipal Corporation Act. None of the impugned
demand notices or recovery orders intimating attachment
of the properties of the Union Government are referable
to any contract and these have obviously been issued by
the Municipal corporation under the purported exercise of
powers to recover service charges in lieu of property
taxes. When the taxes themselves could not be levied
except by removing the exemption by law made by the
Parliament as contemplated by section 285(1), the embargo
cannot be taken away by any implication arising from such
administrative communications. Even if the respondents
were entitled to recover any compensation on the basis of
any alleged assurances of the Central Government, the
nature of their demand would have been entirely different
and not as has been made in all these matters by way of
recovery notices for tax dues and coercive action for
recovery of such dues. The attempt to base the
contention now on quasi-contract theory and entitlement
for compensation for services rendered, cannot cloud the
nature of the demand notices and the orders of recovery
which are issued under the provisions of the said Act and
the Rules having bearing on the aspect of levy and
recovery of municipal taxes. No exemption can be spelt
out from the communications of 1954 and 197 which can
make any inroad in Article 285(1) of the Constitution.
11. We may recall here that, in the Civil Writ
Jurisdiction Case No. 2844 of 1992 decided by the Patna
High Court which has been referred to in the decision of
the Supreme Court in Union of India case (supra), the
High Court had, in terms, relied upon these very circular
letters dated 10th May 1954 and 29th March 1967 and had
on the basis of these communications, upheld the demand
for recovery of service charges made by the Municipal
Corporation of Ranchi. Same question again arose before
the Supreme Court in Union of India v/s Ranchi Municipal
Corporation (supra) from the decision of the of a
Division Bench of the High Court rendered on 15-5-1999 in
Writ Jurisdiction Case No. 3323 of 1994 when the
municipality raised similar demand for service charges
from the Union of India. It was tried to be contended
before the Supreme Court that the Special Leave Petition
against the earlier judgement and order in Civil Writ
Jurisdiction Case No. 2844 of 1992 dated 6th April 1996
was rejected. The Supreme court, holding that such
summary dismissal did not constitute res judicata, held
that the Municipal Corporation had no power to recover
such service charges from the Union of India. Therefore,
the decision in Ranchi Municipal Corporation as well as
in Purna Municipal Council are directly applicable to the
present case and cannot be distinguished on any ground,
as was attempted to be done on behalf of the petitioners
by their learned counsel.
12. It is thus clear to us that, in absence of any
notification under section 184(1) of the Railways Act,
1989 or under the corresponding provision of section
135(1) of the Act of 1890, and in absence of any contract
as contemplated under sub-section (4) of section 189 or
under sub-section (4) of the corresponding provision of
section 135 of the Act of 1890, it was not open to any of
these Corporations to impose any tax or service charges
in lieu of tax under the said Act and effect recovery by
issuing the impugned demand notices and other coercive
orders. Admittedly, there is no law enacted by the
Parliament, withdrawing the exemption from municipal
taxes, as contemplated by Article 285(1) in respect of
the properties occupied by the Postal Department or
Office of the Accountant General. Obviously, therefore,
the recovery of property taxes or service charges in lieu
of such taxes as is sought to be done under the impugned
demand notices and orders issued for the coercive
recovery of the municipal taxes under the said Act, is
ultra vires the powers of the Municipal Corporations.
All the impugned notices, demand notices as well as other
orders issued by these Municipal Corporations for
effecting recovery of service charges in lieu of taxes
are, therefore, hereby set aside. Rule is made absolute
in each of these petitions accordingly, with no order as
to costs. If any amount is deposited pursuant to the
interim orders, that may be refunded to the Union of
India.
[R.K.ABICHANDANI, J.]
[KUNDAN SINGH, J.]
parmar*
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