TaxTMI 
TaxTMI 
2023 (4) TMI 1241
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....ce bearer of a co-operative housing society, namely, one 'Stuti Residency Co-operative Housing Society Ltd.' The petition is affirmed by one Commander Siddheshwar Hira Kalawat who has described himself as General Secretary of petitioner No. 1. 2. Respondent No. 1 is the Commissioner of the Panvel Municipal Corporation (for short 'the PMC'). The PMC is constituted by the State Government by issuance of a notification under Section 3 of the Maharashtra Municipal Corporation Act, 1949 (for short, 'the MMC Act') with effect from 1 October 2016, so as to include 29 villages and other areas, which now includes the Kharghar Node. 3. This petition concerns levy of municipal taxes in relation to only one area of the PMC namely the "Kharghar Node". The infrastructure of the Kharghar Node was developed and maintained by the City Industrial Development Corporation (for short 'CIDCO') which was constituted as a "New Town Development Authority", for the area constituting the twin city, namely, "Navi Mumbai". Until the formation of the PMC, CIDCO was looking after the infrastructure requirements of the Kharghar Node. By virtue of the PMC being constituted with ef....
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....the assessment in question from the date the PMC was constituted, has culminated into the assessment and levy of the property taxes and the bills in question being issued. Illustratively, the petitioners have drawn Court's attention to a bill issued to one of its members namely Satyam Heights Cooperative Housing Society Ltd. which is for the period 1 October 2016 upto 2021-22 of an amount of Rs. 1,69,151/-. 9. Thus, only substantive prayer in the present petition is for issuance of a writ of mandamus to cancel the bills and demand notices issued for levying retrospective tax since October, 2016 to 2021-2022 to individual members and societies of petitioner No. 1. C) Preliminary Objection 10. At the outset, Mr. Kumbhakoni, learned Senior Counsel for PMC has raised a preliminary objection to the maintainability of the present petition, as also, on the petition being entertained by the Court in its extraordinary jurisdiction under Article 226 of the Constitution. Such objection is inter alia on the ground that as the challenge is merely to the bills issued by the PMC demanding property taxes, from the members of petitioner No. 1, they have an effective and efficacious alternati....
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....e that petitioner No. 1 was claiming from them much higher amounts. It is contended that petitioner No. 1 has gone to the extent of publishing a notice in the newspaper inviting public at large to contact the office bearers of petitioner No. 1 to join in prosecuting the present petition, which according to the PMC, speaks volumes about the ill-intention of the petitioner-federation. It is contended that this is clearly an attempt to mislead, if not cheat, the gullible public. The contention is that when the court fees was Rs. 125/- per person/society, what was being demanded per person was Rs. 250/-. 14. It is thus contended that the office bearers of the petitioner-federation are abusing the process of law for their personal benefits and thus for such reason, demonstrably this is not a case which would warrant exercise of extraordinary constitutional jurisdiction of this Court. It is also contended that although the petitioner-federation has claimed support from all the societies, not a single resolution passed by any co-operative society, is annexed to the petition, nor there is any averment stating that every co-operative society to which petitioner No. 1 purportedly represents....
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....f the provisions of the Mumbai Municipal Corporation Act by which the capital method of levy of property taxes in Mumbai was assailed, which according to them, was entertained by this Court. It is on such ground that the petitioners contend that the reply affidavit ought not to be taken into consideration. 18. Mr. Kumbhakoni has contended that one would fail to appreciate as to how the present writ petition can be filed for reliefs which are to the effect that property taxes be not charged and collected, which is a major source of revenue for the PMC to carry out various municipal activities being undertaken in public interest, such as maintenance and development of infrastructure, providing all civic amenities, water requirements, street lighting, constructions of roads, by lanes, sanitary works, sewage treatment activities and infrastructure to be created and maintained, disposal of solid waste etc. It is contended that the present petition is, "not at all" filed much less prosecuted, in the larger public interest and therefore, on this ground itself, it needs to be rejected. It is contended that the petitioners have miserably failed to act upon the clear well-established distin....
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....nder Article 226 of the Constitution of India, observing that it was a discretionary remedy, inter alia observing as to in which circumstances could such a discretion to entertain a writ petition could be exercised by the High Court. The Division Bench in reaching to a conclusion that a writ petition in such circumstances would not be maintainable has referred to the decision of the Supreme Court in Thansingh Nathmal & Ors. Vs. A. Mazid, Superintendent of Taxes AIR 1964 SC 1419; Mahyco Monsanto Biotech (India) Pvt. Ltd. Vs. The Union of India & Ors. along with several other decisions. 22. Mr. Kumbhakoni has also placed reliance on the decision of the Division Bench of the Nagpur Bench of this Court in Vijaysingh Gajrajsingh Chauhan Vs. Governor of Maharashtra [Civil WP No. 3077 of 2020 decided on 9.2.2021.] and Arun Yashwant Kulkarni Vs. State of Maharashtra & Ors. 2021 (4) Mh. L.J. to contend that the cause of action being pursued in the present petition, is necessarily an individual cause of action, and such collective cause of action, certainly cannot be entertained in the present proceedings. 23. Mr. Kumbhakoni would submit that the petitioner has failed to show that petition....
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....of the MMC Act which provides for fixing of rates of taxes. He submits that on all counts the PMC has breached the provisions of law in making assessment. His next contention is levying of retrospective taxes demanded from 1 October 2016 till financial year 2021-2022, itself is illegal. It is his contention that there is no basis in law for such retrospective demand. It is his submission that the decisions as cited by Mr. Kumbhakoni are totally non-applicable in the facts of the present case. 26. Mr. Joshi has submitted that preliminary objection of Mr. Kumbhakoni to the petition not being maintainable, is totally untenable, in support of this contention, Mr. Joshi has placed reliance on the recent decision of the Supreme Court, in M/s. Godrej Sara Lee Limited Vs. The Excise and Taxation Officer-cum-Assessing Authority & Ors. to contend that by applying the ratio of the said decision, it would be required to be held that the petition is not only maintainable but also needs to be entertained. Insofar as contention on taxes being demanded for retrospective period, Mr. Joshi has placed reliance on the judgment of the Division Bench of this Court, in Satish Dattatray Shivalkar (Dr.) V....
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....ct for a complaint to be made to the Commissioner against the demand, such complaint has previously been made and disposed of; (d) in the case of an appeal against any amendment made in the assessment book for property taxes during the official year, a complaint has been made by the person aggrieved within [twenty-one days] after he first received notice of such amendment and his complaint has been disposed of; (e) in the case of an appeal against a tax, or in the case of an appeal made against a rateable value [or the capital value, as the case may be] [the amount of the disputed tax claimed from the appellant, or the amount of the tax chargeable on the basis of the dispute rateable value up to the date of filing the appeal, has been deposited by the appellant with the Commissioner]. (2A) Where the appeal is not filed in accordance with the provisions of clauses (a) to (e) of sub-section (2), it shall be liable to be summarily dismissed. [(3) In the case of any appeal entertained by the Judge, but not heard by him, before the date of commencement of the Maharashtra Municipal Corporations (Amendment) Act, 1975, the Judge shall not hear and decide such appeal unless the amou....
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....hall be entertained by the Deputy Commissioner or, as the case may be, the Commissioner unless the amount of the disputed tax claimed from the appellant has been deposited by the appellant with the Commissioner." (emphasis supplied) 29. About 59 years back, a three Judge Bench of the Supreme Court in the case of Shivram Poddar Vs. Income Tax Officer, Central Circle II, Calcutta and Anr. AIR 1964 SC 1095 has held that resort to the High Court in exercise of its extraordinary jurisdiction conferred and recognized by the Constitution in matters relating to assessment, levy and collection of tax (in such case, income-tax) may be permitted only when questions of infringement of fundamental rights arise, and where on undisputed facts the taxing authorities are shown to have assumed jurisdiction which they do not possess. In attempting to bypass the provisions of the statute by inviting the High Court to decide the questions which are primarily within the jurisdiction of the Revenue Authorities, the party approaching the Court has often to ask the Court to make assumptions of facts which remain to be investigated by the Revenue Authorities. 30. In another decision of a three Judge Ben....
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....226 by the High Court." 31. In Assistant Collector of Central Excise, Chandan Nagar, West Bengal Vs. Dunlop India Ltd. & Ors. (1985)1 SCC 260 referring to the decision in Titaghur Paper Mills Co. Ltd. Vs. State of Orissa (1983)2 SCC 433, the Supreme Court observed that Article 226 is not meant to short circuit or circumvent statutory procedures. It is only where statutory remedies are entirely ill-suited to meet the demands of extraordinary situations, as for instance where the very vires of the statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it, it may take recourse to Article 226 of the Constitution. It was held that the Court must have good and sufficient reason to by-pass the alternative remedy provided by statute. 32. Mr. Joshi, learned Counsel for the petitioners has referred to a recent decision of the Supreme Court in M/s. Godrej Sara Lee Ltd. Vs. The Excise and Taxation Officer-cum-Assessing Authority & Ors. (supra) to contend that applying the ratio as laid down in this decision, it ought to be held that the present petition is not only maintainable bu....
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....s of each particular case) have a discretion whether to entertain a writ petition or not. One of the self-imposed restrictions on the exercise of power under Article 226 that has evolved through judicial precedents is that the high courts should normally not entertain a writ petition, where an effective and efficacious alternative remedy is available. At the same time, it must be remembered that mere availability of an alternative remedy of appeal or revision, which the party invoking the jurisdiction of the high court under Article 226 has not pursued, would not oust the jurisdiction of the high court and render a writ petition "not maintainable". In a long line of decisions, this Court has made it clear that availability of an alternative remedy does not operate as an absolute bar to the "maintainability" of a writ petition and that the rule, which requires a party to pursue the alternative remedy provided by a statute, is a rule of policy, convenience and discretion rather than a rule of law. Though elementary, it needs to be restated that "entertainability" and "maintainability" of a writ petition are distinct concepts. The fine but real distinction between the two ought not to....
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....ool Corporation vs. Registrar of Trade Marks, Mumbai and Others) carved out the exceptions on the existence whereof a Writ Court would be justified in entertaining a writ petition despite the party approaching it not having availed the alternative remedy provided by the statute. The same read as under: (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is violation of principles of natural justice; (iii) where the order or the proceedings are wholly without jurisdiction; or (iv) where the vires of an Act is challenged. 7. Not too long ago, this Court in its decision 2021 (Assistant Commissioner of State Tax vs. M/s. Commercial Steel Limited) has reiterated the same principles in paragraph 11. 8. That apart, we may also usefully refer to the decisions of this Court reported in (1977) 2 SCC 724 (State of Uttar Pradesh & ors. vs. Indian Hume Pipe Co. Ltd.) and (2000) 10 SCC 482 (Union of India vs. State of Haryana). What appears on a plain reading of the former decision is that whether a certain item falls within an entry in a sales tax statute, raises a pure question of law and if investigation into facts is unnecessary, the h....
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.... Act read with the Rules, creates a robust statutory mechanism not only in respect of everything leading to the levy and collection of taxes but also providing for a specific statutory remedy of an appeal under Section 406 of the MMC Act of an appeal being provided, if a person is aggrieved by the fixation of a rateable value or capital value or 'tax fixed' or 'charged' under MMC Act, to be assailed in such appeal, which is to be filed before the Judge as defined under Section 2(29) of the MMC Act. Such provision defines "the Judge" to mean in the (City of Pune) the Judge of the Court of Small Causes, and in any other City the Civil Judge (Senior Division) having jurisdiction in the City. Thus, clearly, a statutory remedy of an appeal is available to the member/cooperative societies of petitioner no. 1, for redressal of their individual grievances/disputes on the quantum of the property tax or any other issue leading to the issuance of property tax bills. It, however, appears that such appeal would be maintainable, provided there is a "pre-deposit", as provided under sub-section 2(e) of Section 406. Sub-section 2(e) of Section 406 provides that amount of disputed ta....
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.... If we accept the contentions as made on behalf of the petitioners, we fear that we are creating a new pattern and jurisprudence in relation to such matters being entertained in exercise of writ jurisdiction, thereby rendering the provision for a statutory appeal wholly otiose. This would lead to severe and drastic consequences, in as much as assessments as may be levied by the several Municipal Corporations, governed by the provisions of the MMC Act, would become vulnerable to challenge by approaching the High Court in its extraordinary writ jurisdiction. This would be applicable across the board in respect of all the Municipal Corporations in the State of Maharashtra. We would hence certainly not accept such wanton contention as sought to be urged by the petitioners, that an en bloc writ petition assailing the property tax bills be entertained. The legislative wisdom behind Section 406 providing for a statutory appeal cannot be defeated, merely because petitioner no. 1 is a Federation, with several member societies, and merely because it is claimed that they have a common cause. It would be wrong reading of law that merely by forming a federation, a different color could be given....
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....he Karnataka High Court in the case of Vishwabharathi House Building Co-operative Society Ltd. Vs. Bangalore Development Authority (1991)0 AIR (Kar) 133. In our opinion, Mr. Joshi's reliance on this decision is not well founded for the reason that it is not petitioner no. 1 who is aggrieved by issuance of any bills. No civil wrong is caused to petitioner no. 1 but is alleged to be caused to its members. Also this is not a petition which is filed in public interest, so that the well settled principle of locus standi can be stretched to the cause action being pursued. The petitioners consciously have not filed this petition as Public Interest Litigation. Thus, in our opinion, in fact, neither any fundamental rights of the petitioner No. 1 nor any legal/statutory rights of petitioner No. 1 are, in any manner, violated, for petitioner No. 1 to maintain this petition. Insofar as petitioner No. 2 is concerned, as noted above, if he is aggrieved by any bill issued, he has a statutory remedy available to assail such bill. 41. For the sake of completeness, we also examine as to whether any exceptional case is made out by the petitioners so as to permit the petitioners to urge their con....
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.... any, to the final bill in accordance with the provisions of Rule 19 of the Taxation Rules. I crave leave to refer to and rely upon the documents in respect of the hearing given to the Petitioner. 33. I say and submit that after considering objections from the residents of the Corporation area, NGOs, leaders of various social and political parties etc, it was felt necessary to review the percentage of tax to be levied. Hence on 06-042021 the General Body of the Corporation in clause 1, 7, 8, 9 of resolution No. 310 proposed to reduce the annual letting rate of properties in municipal limit by 50% thereby substantially reducing the tax in the corporation limits. I say and submit that the proposal made by the general body to reduce annual letting rate by 50% was not approved by the Special Administrative Tax Committee. I say that they instead approved reduction in annual letting rate by 30% instead of 50%. I say that only in node G of the corporation area i.e. Taloja Industrial Area (Taloja MIDC) no reduction was given. I say that after this whole process of fixing property tax was complete in a particular node the Corporation issued final tax bills to the residents. 35. I say th....
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....t was not permissible for CIDCO to accept any taxes under the provisions of the constitution as CIDCO was not a municipal corporation. The relevant averments in that regard are required to be noted, which read thus: "37. I say that the contention of the Petitioner that as they are already paying Charges to CIDCO it is not legal on part of the Corporation to collect property tax from the residents of Panvel is unfounded and not tenable in eyes of law. I say that CIDCO has been declared as New Town Development Authority under the provisions of section 113(3A) of the MRTP Act for several of the villages and areas which now fall within the municipal limits of the Respondent No. 2 Corporation. I say that the functions of CIDCO are inter alia planning, development, use of land in regions established for that purpose, to make better provisions for preparation of Development Plan and its execution, creation of new town etc as is provided under the MRTP. I say that for the aforesaid functions, CIDCO charges Services Charges on persons within the area of its operation. I submit that Constitution mandates that no tax shall be levied or collected except by authority of law and CIDCO being de....
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....d property owners from Panvel municipal council area." 43. In regard to the petitioner's contention that it was illegal for the PMC to levy tax with retrospective effect, the PMC has stated that there is no levy of tax with retrospective effect as contended by the petitioner. In this regard, the PMC has contended that the PMC has determined the Annual Letting Rate, Rateable Value and Tax for the period commencing from the formation of the Corporation (1 October, 2016), for which, it has surveyed all properties which fell within its municipal area w.e.f. 1 October, 2016 and issued Demand Notices for the untaxed period as permissible under Section 150A of the MMC Act, under which municipal corporation can demand taxes for a retrospective period of six years. Hence, PMC's contention that levying of property tax from the date of formation of the Corporation has a legal foundation. The PMC has also contended that the petitioner's contention in regard to requirement by the Commissioner in preparing assessment book for every official year is untenable in view of Rule 21 of the Taxation Rules falling under 'Chapter VIII' of 'Schedule D' of the MMC Act, which pr....
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....reads thus: 150A. Power to assess in case of escape from assessment Notwithstanding anything to the contrary contained in this Act or the rules made thereunder, if for any reason any person liable to pay any of the taxes or fees leviable under this Act has escaped assessment in any year, the Commissioner may, at any time within six years from the date on which such person should have been assessed, serve on such person a notice assessing him to the tax or fee due and demanding payment thereon within 15 days from the date of such service, and the provisions of this Act and the rules made thereunder shall, so far as may be, apply as if assessment was made in the year to which the tax or fee relates." 46. A bare reading of Section 150A shows that it is a widely worded provision. It has an overriding effect over the other provisions of the Act and the Rules. In our opinion, it would not be a wrong reading of the said provision, if it is observed that such provision, would take within its ambit such situations whereby the municipal corporation could not levy taxes for a retrospective period. This would certainly include the situation as in the present case, namely, the difficulties....
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....f assessment for levy of tax in respect of each of the properties of the members of petitioner no. 1 would be independent and distinct. The Municipal Corporation makes assessment on varied factors which are infact requirements of the taxation rules. It cannot be a blanket common consideration in issuance of bills for different properties nor it is so pleaded in the writ petition. 48. From what has been contended by Mr. Joshi, it appears that at a click of a button, all its members have been issued similar property tax bills, which can hence be assailed in a common action, as being agitated in the present proceedings. We are quite astonished with such contentions as urged on behalf of the petitioners when the petitioners assert that the petition in its present frame, needs to be entertained. Following discussion would further aid the conclusion. 49. The procedure for levy and collection of municipal taxes falls under Chapter XI of the MMC Act titled as "Municipal Taxation". Section 127 which falls under the said Chapter, is the charging Section, providing that the Municipal Corporation, inter alia, is authorised to impose taxes and one of them being property taxes. Section 128 pro....
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....he Supreme Court had the occasion to lay down therein a principle of law which is salutary and not to be found in any other previous decision rendered by it. The principle, plainly is that, if a remedy is available to a party before the high court in another jurisdiction, the writ jurisdiction should not normally be exercised on a petition under Article 226, for, that would and allow the machinery set up by the concerned statute to be bye-passed. The relevant passage from the decision reads as follows: "The jurisdiction of the High Court under Article 226 of the Constitution is couched in wide terms and the exercise thereof is not subject to any restrictions except the territorial restrictions which are expressly provided in the Article. But the exercise of the jurisdiction is discretionary; it is not exercised merely because it is lawful to do so. The very amplitude of the jurisdiction demands that it will ordinarily be exercised subject to certain self-imposed limitations. Resort to that jurisdiction is not intended as an alternative remedy for relief which may be obtained in a suit or other mode prescribed by statute. Ordinarily the Court will not entertain a petition for a wr....
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....er a further appeal to the Tribunal under subsection (3) of Section 23 of the Act, and then ask for a case to be stated upon a question of law for the opinion of the High Court under Section 24 of the Act. The Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under Article 226 of the Constitution. It is now well recognized that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. ..." 19. Drawing guidance from the aforesaid dicta, rendered in connection with matters relating to tax and not any other subject, we are of the considered opinion that since the petitioner has the option of approaching this Court in a different jurisdiction at an appropriate stage, if at all the decision of the Tribunal is adverse to its interest, it would not be prudent in the judicious exercise of discretion to derail the procedure ignoring the law contained in the MVAT Act." 51. Mr. Kumbhakoni's reliance on the decision of a Division Bench of this Cour....
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....sions are attracted; if they are, the constitutional challenge to their validity must be examined and decided. If, however, the facts admitted or proved do not attract the impugned provisions there is no occasion to decide the issue about the vires of the said provisions. Any decision on the said question would in such a case be purely academic. Courts are and should be reluctant to decide constitutional points merely as matters of academic importance." (emphasis supplied) The same has also been considered in Kartar Singh (supra) as under:- "12. The standards themselves, it would be noticed, have been prescribed by the Central Government on the advice of a Committee which included in its composition persons considered experts in the field of food technology and food analysis. In the circumstances, if the rule has to be struck down as imposing unreasonable or discriminatory standards, it could not be done merely on any appropriate reasoning but only as a result of materials placed before the Court by way of scientific analysis. It is obvious that this can be done only when the party invoking the protection of Article 14 makes averments with details to sustain such a plea and l....
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.... of uniform elevation or even as if no part of that State is plain country but yet if the same minimum was prescribed for the entire area of Himachal Pradesh, that would clearly show that the elevation of a place is not the only factor to be taken into account." In Kusum Ingots (supra) the Hon'ble Apex Court held as under:- "19. Passing of a legislation by itself in our opinion do not confer any such right to file a writ petition unless a cause of action arises therefor. 21. A parliamentary legislation when it receives the assent of the President of India and is published in an Official Gazette, unless specifically excluded, will apply to the entire territory of India. If passing of a legislation gives rise to a cause of action, a writ petition questioning the constitutionality thereof can be filed in any High Court of the country. It is not so done because a cause of action will arise only when the provisions of the Act or some of them which were implemented shall give rise to civil or evil consequences to the petitioner. A writ court, it is well settled, would not determine a constitutional question in vacuum." 8. Thus the consistency of judicial opinion, in so far as....
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....est has been adversely affected or jeopardised." (emphasis supplied) 52. On maintainability of the writ petition, Mr. Joshi has placed reliance on an interim order passed by a coordinate Bench of this Court in Mahadev Waghmare & Anr. Vs. The State of Maharashtra, Urban Development Department & Ors. (supra). We may, at the very outset, observe that the said interim orders would not assist the petitioner, for more than one reason; firstly, interim orders do not make a precedent; secondly, the said order is passed in the facts of the case before the Court; and thirdly, such order has not decided the issue of entertainability of the petition, as issue on entertainability of the said petition has been expressly kept open by the co-ordinate Bench, whereas we are called upon to decide not only the issue of maintainability but also on entertainability of the present proceedings as discussed in detail in the foregoing paragraphs. 53. Adverting to the above principles of law, we are at a loss to comprehend as to how petitioner no. 1 can be said to be aggrieved and can have a cause of action to maintain this petition and the same would be entertained by this Court. 54. In view of the abo....