2009 (11) TMI 946

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....dings by treating the dues as arrears of taxes. Such actions of the appellants were challenged by Union of India in a batch of writ petitions before the Gujarat High Court which were disposed of by the impugned common order of the High Court dated 19.9.2002. THE High Court allowed the petitions holding as follows: "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 ail these matters by way of recovery notices for tax dues and coercive action for recovery of such dues. ....

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....dia dated 10.5.1954, 29.3.1967, 28.5.1976 and 26.8.1986 were enforceable agreements between the Government of India and the municipal corporations, which had nothing to do with Article 285. The municipal corporations also contended that sections 135(1) and 184(1) of the Railways Act, 1989 exempted the Railways only from payment of taxes and not from payment of service charges, Article 285 of the Constitution provides that : "(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 provides, 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 is liable or treated as liable, so long as that tax continues to be levied in that State." ( 3. ) IN Union of INdia and Ors, vs. State of Uttar Pradesh and Ors., 2007 (11) SCC 324, this Court upheld the decision of the High Court that charges for supply of water or for other services rendered under any statutory obligation, is a fee a....

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....e arrangements with the respective municipal corporations, as suggested by its advisory committees and make modifications or revisions in the rates of service charges. (vi) Wherever properties of State Government are exempted, such exemption shall apply to properties of Central Government also. Under no circumstances, the service charges payable by the Union of India will be more than the service charges paid by the State Government, (vii) The arrangement will not affect the legal rights conferred by the appropriate laws, in regard to any property held by the Union. ( 4. ) THE Union of India has also stated that taking note of the relevant circumstances, it has decided to pay service charges at the following rates: (a) 75% of the property tax levied on private owners, where the properties of the Union are provided by the municipal corporations with all services/facilities as were provided to other areas within the municipal corporation; (b) 50% of the property tax levied on private owners, in regard to properties of the Union, where only some of the services/facilities were availed; and (c) upto a maximum of one-third (33 and 1/3%) of the property tax levied on private owners in....

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....ssued a circular dated 24.7.1954, similar to the circulars issued by the Government of India, Ministry of Finance, providing for payment of part of the property tax, as services charges for water, scavenging etc. THE learned Solicitor General however stated that she was not sure whether the said circular continues in force or was superseded by other circulars. Be that as it may. ( 6. ) IN view of the above, there is no need to consider the appeals on merits. We dispose of appeals and pending applications by recording the following brood agreement between the parties: (i) The Union of INdia and its departments will pay service charges for the services provided by the appellant municipal corporations. They will not pay any property tax. The service charges will be paid at 75%, 50% and 331/3% respectively of the property tax levied on private owners, depending upon whether Union of INdia or its department is utilising the full services, or partial services or nil services. The Union of INdia represented by its concerned department will enter into agreements/understandings in regard to service charges for each of its properties, with the respective municipal corporation. (ii) The ab....