2008 (5) TMI 647 - HC - Indian Laws

Delhi Metro Rail Corp exempt from municipal taxes; court remands property qualification issue for further assessment.

DELHI METRO RAIL CORPORATION LIMITED Versus MUNICIPAL CORPORATION OF DELHI & ORS

The HC ruled that the petitioner, Delhi Metro Rail Corporation Limited, is exempt from paying municipal taxes under Section 184 of the Railways Act, 1989, ... Liability to pay property tax and other taxes under the provisions of Delhi Municipal Corporation Act, 1957 - Entitlement for exemption from Payment of Municipal Taxes u/s 184 of 1989 Act - 'Railway Administration' includes 'Metro Railway'? - Interpretation of Section 184 and the term 'railway administration' and whether it includes properties not specified in Clauses (a) to (f) of Section 2 (31) of 1989 Act - HELD THAT:- Two similar terms can have two different meanings under two enactments depending upon the context in which the said terms have been used. Therefore, it will not be proper to import the definition of the terms 'Metro Railway', etc. used in 2002 Act into 1989 Act. 1989 Act is a separate enactment and it's clauses have to be interpreted as per the definition given to the said term in the said enactment. Recourse to 2002 enactment is not permissible to define 'Railway Administration' under 1989 Act. It is also equally well settled that there can be two separate enactments dealing with the same subject matter and the question which one of the two enactments will prevail on a particular issue or question, may arise in a given case, but the said question is not relevant and material for the present controversy. Therefore, it is not possible to hold and accept the contention of the respondent corporation that the petitioner ceases to be 'railway administration' within the meaning of Section 2 (32) of 1989 Act in view of definition clauses in 2002 enactment or as 2002 Act stands enforced. Moreover, the expression 'Railway' is generic in nature and the expression 'Metro Railway' is a mere specie. 'Metro Railway' will be included and forms part of the generic expression 'Railway'. Anything which falls within the definition of term 'Railway' cannot be taxed by the respondent under the Delhi Municipal Corporation Act, 1957 in view of Section 184 of the 1989 Act. However, the respondent is entitled to tax under the Delhi Municipal Corporation Act, 1957 the assets and properties, which do not fall and are not 'Railways' within the meaning of Section 2 (31) of the 1989 Act. A bare reading of the Section 2 (31) of 1989 Act will show that lines, electrical equipments, installations, stations, warehousing workshops, running room, rest house etc. constructed for the purpose of or in connection with the railway are exempted from taxation under the Delhi Municipal Corporation Act, 1957. The Delhi Municipal Corporation will have to establish and show that a particular building or asset can be taxed under the Delhi Municipal Corporation Act as it does not fall within the meaning of 'Railway' as defined in Section 2 (31) of 1989 Act. This aspect requires examination and to this limited extent the matter is remanded back to the Assessor and Collector for fresh adjudication. The Assessor and Collector will keep the ratio of this decision in mind and ensure that properties or assets mentioned in Section 2 (31) of 1989 Act are not taxed. He shall give a specific finding on each asset/property brought to tax. The petitioner will cooperate and furnish all details, documents and information in this regard to the Assessor and Collector. Therefore, it is held that the petitioner is entitled to exemption from payment of municipal taxes in view of Section 184 of 1989 Act, but only in respect of assets/properties which have been defined as Railway in Section 2 (31) and not in respect of other assets/properties. It is also clarified that this is subject to issue of notification by Central Government withdrawing the said exemption and also subject to right of the respondent- Delhi Municipal Corporation to raise and claim property tax from third parties, if permissible and allowed under law. The writ petition is accordingly allowed to the extent indicated above. Issues Involved:1. Liability of the petitioner to pay property tax under the Delhi Municipal Corporation Act, 1957.2. Applicability of Section 184 of the Railways Act, 1989.3. Definition and scope of 'Railway Administration' under the Railways Act, 1989.4. Interaction between the Railways Act, 1989, the Metro Railways (Construction of Works) Act, 1978, and the Delhi Metro Railway (Operation and Maintenance) Act, 2002.5. Exemption from taxation under Section 184 of the Railways Act, 1989.6. Classification of properties as 'Railway' under Section 2(31) of the Railways Act, 1989.Detailed Analysis:1. Liability of the Petitioner to Pay Property Tax:The petitioner, Delhi Metro Rail Corporation Limited, contested its liability to pay property tax under the Delhi Municipal Corporation Act, 1957. The court noted that this was the third round of litigation on this issue. The earlier writ petitions had resulted in remands to the Assessing Authority to decide the applicability of Section 184 of the Railways Act, 1989, which had not been adequately addressed in previous assessment orders.2. Applicability of Section 184 of the Railways Act, 1989:Section 184 of the Railways Act, 1989, provides that a 'railway administration' is not liable to pay any tax to a local authority unless specified by a Central Government notification. The court emphasized that this exemption is granted notwithstanding any other law, including the Delhi Municipal Corporation Act, 1957. The respondents did not contend that any such notification had been issued by the Central Government declaring the railway administration liable to pay taxes.3. Definition and Scope of 'Railway Administration':The term 'railway administration' is defined in Section 2(32) of the Railways Act, 1989, to include both Government and non-Government railways. The court clarified that this definition is meant to identify the individual or entity responsible for the railway, rather than to define the term 'railway administration' exhaustively. The petitioner, being a railway for public carriage of passengers, qualifies as a 'railway administration' under Section 2(32).4. Interaction between the Railways Act, 1989, the Metro Railways (Construction of Works) Act, 1978, and the Delhi Metro Railway (Operation and Maintenance) Act, 2002:The respondents argued that the 1989 Act was not applicable to the petitioner due to the specific definitions in the 2002 and 1978 Acts. The court rejected this argument, stating that the 1989 Act is a separate enactment and its terms must be interpreted independently. The court also noted that the provisions of the 1978 and 2002 Acts are in addition to and not in derogation of the 1989 Act. Sections 43 of the 1978 Act and 104 of the 2002 Act confirm that these Acts do not override the provisions of the 1989 Act.5. Exemption from Taxation under Section 184 of the Railways Act, 1989:The court held that Section 184 of the 1989 Act grants protection from local taxation to both Government and non-Government railways. The petitioner is entitled to this exemption as it qualifies as a 'railway administration' under the Act. The court found no ambiguity in the language of Section 184 that would require interpretation in favor of the state.6. Classification of Properties as 'Railway' under Section 2(31) of the Railways Act, 1989:The court noted that the term 'railway' includes various properties and installations used for the purposes of or in connection with a railway, as specified in Section 2(31). The Assessor and Collector had not examined whether specific properties of the petitioner qualified as 'railway' properties. The court remanded this issue for detailed scrutiny, stating that only properties falling within the definition in Section 2(31) are exempt from local taxation.Conclusion:The court concluded that the petitioner is entitled to exemption from municipal taxes under Section 184 of the 1989 Act for properties defined as 'railway' in Section 2(31). The matter was remanded to the Assessor and Collector to determine which properties qualify for this exemption. The court clarified that the exemption is subject to any future notification by the Central Government and does not preclude the respondent from taxing third parties if permissible by law. The writ petition was allowed to the extent indicated, with no order as to costs.