TaxTMI 
TaxTMI 
2023 (8) TMI 651
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..... There is also a prayer assailing the notice demanding such tax dated 14 June, 2023. As the prayers made in these three petitions are similar (except for the different periods), for convenience, the prayers as made in the first petition are required to be noted which read thus:- "(a) Quashing and setting aside the impugned order dated 14/06/2023 as per "Exhibit-A" and declaring that 'Chole' village is not included in the local urban area of the Kalyan-Dombivali Municipal Corporation. (b) Quashing and setting aside the impugned Assessment order dated 14/09/2022 as per "Exhibit-E" and directing the Respondent No. 3 to refund the amount paid by the Petitioner or recovered from the petitioner on account of LBT, interest and penalty; (c) Declaring that sub-rule (2) and sub-rule (3) of Rule 48 of the LBT Rules respectively for levy of penalty and interest are ultra virus to the Municipal Act. (d) Cancelling the LBT registration Certificate as per "Exhibit-F"; (e) That pending hearing and final disposal of this Petition, the recovery of Rs. 2,47,10,854 arising out of Assessment order dated 14/09/2022 as per "Exhibit-E" be stayed; (f) ....
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....ea of the KDMC is concerned, we may note that the State of Maharashtra by virtue of notification dated 14 May, 2015 (Exhibit-C to the petition) has notified the revised boundaries of the municipal corporation after inclusion of the area specified in Schedule-I to be an area as specified in Schedule-II, which is appended to the said notification. From the reading of the said notification, it is clearly seen that the same has been issued in the context of the requirements of clause (2) of Article 243-Q of the Constitution read with Section 3(3)(a) of the MMC Act. To appreciate Mr. Desai's submission in this regard, it would be necessary to not only note the said notification, but also the statutory provisions under which the notification has been issued. The relevant provisions of the Constitution and of the MMC Act read thus:- "243Q of the Constitution. Constitution of Municipalities.- (1) There shall be constituted in every State,- (a) a Nagar Panchayat (by whatever name called) for a transitional area, that is to say, an area in transition from a rural area to an urban area; (b) a Municipal Council for a smaller urban area; and ....
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.... (2) Save as provided in sub-section (1), the State Government may, having regard to the factors mentioned in clause (1) of article 243-Q of the Constitution of India, specify by notification in the Official Gazette, any urban area with a population of not less than three lakhs as a larger urban area. (2A) Every larger urban area so specified by the State Government under sub-section (2), shall form a City and there shall be a Municipal Corporation for such larger urban area known by the name of the '' Municipal Corporation of the City of .............".] (3) [(a) [Subject to the provision of sub-section (2), the State Government] may also from time to time after consultation with the Corporation by notification in the Official Gazette alter the limits specified. for any city under sub-section (1) or sub-section (2) so as to include therein or to exclude therefrom, such area as is specified in the notification.] [(b) Where any area is included within the limits of the 4[larger urban area] under clause (a), any appointments, notifications, notices, taxes, orders, schemes, licences, permissions, rules, by-laws or forms made, issued, imposed or granted und....
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....as a "larger urban area" in the notification issued in respect thereof, under clause (1) of article 243-Q of the Constitution, shall be deemed to be a duly constituted Municipal Corporation, for the 'larger urban area', so specified forming a City, known by the name of the respective Municipal Corporations. Sub-section (2) of Section 3 provides that save as provided in sub-section (1), the State Government may, having regard to the factors mentioned in clause (1) of Article 243-Q of the Constitution, specify by notification in the Official Gazette, any urban area with a population of not less than three lakhs as a 'larger urban area.' Further, sub-section (2A) of Section 3 provides that every 'larger urban area' so specified by the State Government under sub-section (2), shall form a City and there shall be a Municipal Corporation for such 'larger urban area' known by the name of the respective Municipal Corporations of the City. What is relevant for the present proceedings are the provisions of sub-section (3) of Section 3 and clauses (a) and (b) thereof. Clause (a) of sub-section (3) of Section 3 provides that subject to the provision of sub-section (2), the State Government may ....
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....se (2) of article 243-Q of the Constitution of India, it is expedient to alter the limits of the Kalyan-Dombivali Municipal Corporation so as to include therein certain areas; Now, therefore, in exercise of the powers conferred by clause (a) of sub-section (3) of section 3 of the Maharashtra Municipal Corporations Act, and of all other powers enabling it in that behalf, the Government of Maharashtra after consultation with the Municipal Corporation of the City of Kalyan-Dombivali and after previous publication as required by sub-section (4) of the said section 3, hereby with effect from 1st June 2015, alters the limits of the larger urban area for which the Municipal Corporation of the City of Kalyan-Dombivali has been constituted, so as to include therein the areas specified in Schedule-I appended hereto. The revised boundaries of the Kalyan-Dombivali Municipal Corporation after inclusion of the area specified in Schedule-I, shall be such as specified in Schedule-II appended hereto. Schedules - I The description of area to be included in the larger urban area of the Municipal Corporation of the City of Kalyan-Dombivali Sr.No. Name of the revenue Village ....
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....p to the western boundary of Ulhasnagar Municipal Corporation (along the eastern boundaries of village Ashele, Khadegolavali) up to the Eastern boundary of village Aashele, Chinchpada, Manere, Vasar. 3. South-Along the Southern boundaries of villages viz. Vasar, Bhal, Umbroli up to the Eastern-southern boundary of village Hedutane and further up to Southern boundary of villages viz. Hedutane, Nilaje, Ghesar. 4. West-Along the boundary of village viz. Ghesar, Nilaje, Katai, Usaraghar, Sandap, Bhopar and further along Eastern bank of Ulhas River towards up to the Western boundaries of village Kopar, Dombivali (old) and Thakurli." 10. It is clear from the reading of the above notification that it is issued in exercise of the powers conferred on the State Government under clause (a) of sub-section (3) of Section 3 of the MMC Act. It also specifically refers to the factors mentioned in clause (2) of Article 243Q of the Constitution, as also to the revised boundaries of the municipal corporation, to the effect that after inclusion of the area specified in Schedule-I, it shall be such area as specified in Schedule-II. Schedule-II of the notification provides for the r....
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....er or not the tax, penalty, interest, sum forfeited or tax deducted at source, if any, in relation to such proceedings is paid on or before the appointed day. Thus, Section 78 has clearly saved the applicability of the LBT provisions for the relevant period even after coming into force of the GST regime. Thus, Section 78 of the Maharashtra Act No. XLII of 2017 itself provides that the repeal is in view of the provisions of the MGST Act, 2017 being brought into force. 12. Thus, In view of the above clear position in law, we cannot accept the contention as urged by Mr. Desai that in view of the deletion of the provisions of the LBT by Maharashtra Act No. XLII of 2017, the saving clause would not operate and the entire exercise of assessment as undertaken by the municipal corporation in regard to the LBT being levied by the municipal corporation is without jurisdiction. Such argument of Mr. Desai is in fact contrary to the provisions of Section 78 of the Maharashtra Act No. XLII of 2017 and Section 173 of the MGST Act. 13. In so far as the third contention is concerned, we are not inclined to examine such contention, in as much as the rules themselves are clear that they would p....