TaxTMI 
TaxTMI 
2023 (8) TMI 934
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....unt of Rs. 2,71,36,506/-. 2. At the outset, Ms. Sagvekar, learned Counsel for the respondent-municipal corporation raised a preliminary objection to the maintainability of this petition on the ground that there is an alternate remedy of an appeal available to the petitioner under Section 406 of the Act. Section 406 of the MMC Act being appeal provision, is required to be noted which reads thus: 406. Appeals when and to whom to lie. - (1) Subject to the provisions hereinafter contained, appeals against any rateable value [or the capital value, as the case may be] or tax fixed or charged under this Act shall be heard and determined by the judge. (2) No such appeal [shall been entertained] unless - (a) it is brought within fifteen days after the accrual of the cause of complaint; (b) in the case of an appeal against a rateable value [or a capital value, as the case may be] a complaint has previously been made to the Commissioner as provided under this Act and such complaint has been disposed of; (c) in the case of an appeal against any tax [including interest and penalty imposed] in respect of which provision exists under this Act for a complaint to be made to the Commissio....
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.... case of any appeal, which may have been entertained by the Judge before the date of commencement of the Act aforesaid or which may be entertained by him on and after the said date, the Judge shall not here and decide such appeal, unless the amount of the tax claimed by each of the bills, which may have been issued since the entertainment of the appeal, is also deposited, from time to time, with the Commissioner in the first month of the half year to which the respective bill relates. In case of default by the appellant at any time before the appeal is decided, on getting an intimation to that effect from the Commissioner, the Judge shall summarily dismiss the appeal,] [(6) An appeal against [the demand notice in respect of levy of cess under Chapter XIA or the Local Body Tax under Chapter XIB] shall lie,- (i) to the Deputy Commissioner, when the demand notice is raised by the Cess Officer [or any other officer, not being the Deputy Commissioner] (ii) to the Commissioner, when the demand notice is raised by the Deputy Commissioner. (7) The appeal under sub-section (6) shall be filed within fifteen days from the date of the demand notice.] (8) No appeal under sub-section ....
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....eeds to be made available to the petitioner and therefore, the levy is bad and illegal. 7. Mr. Desai would urge on the in-applicability of the provisions of Section 152D referring to the provisions of the definition of Cess as defined under Section 152A of the Act to contend that it is not entry of goods at the hands of the petitioner which is being taxed, but at the hands of the third party who are the sellers of the petitioner. He would submit that the petitioner is entitled to the reliefs as prayed for in the Writ Petition. He has accordingly advanced submissions, not only on the issue of alternate remedy, but also on the merits of the case in contending that the petitions be adjudicated qua the reliefs as prayed for. 8. To appreciate the rival contention, it would be necessary to note the factual matrix: The case of the petitioner is that it is holding a registration certificate under the LBT in respect of its factory which is situated at Rajprabha Udyog Nagar Building No. 6B & C, Golani Naka, Waliv, Vasai (East), District Palghar. It is not in dispute that the said factory premises of the petitioner are situated within the municipal limits of Vasai-Virar City Municipal Cor....
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....the aforesaid provisions namely that the goods purchased by the petitioner from the unregistered suppliers which were imported by them within the municipal limits and the petitioner had moved the said goods outside the city for carrying out the process enumerated in the Explanation to Rule 28 and after the said process is carried out, the same have been imported into the limits of the city. It is, thus, contended that the demand raised by the impugned assessment order is without authority of law. 11. It is also contended that the provision to file an appeal against any assessment order before the Appellate Authority as provided under Section 406(6)(ii) of the MMC Act read with sub-section (8) thereof, is also not an efficacious remedy inasmuch as such provision requires that for an appeal to be maintainable, the disputed tax is required to be deposited and it is difficult for the petitioner to pay the entire amount of disputed tax and it is for this reason this petition has been filed. The averments to that effect is made in paragraph 5(f) read thus: "5(f) It is submitted that there is a provision to file appeal against any assessment order, to the appellate authority constitute....
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.... be adjudicated in the present proceedings, we may briefly note the legislative scheme in respect of the taxing provision. Prior to the introduction of the local body tax 'cess' was levied on the entry of goods within the municipal limits for use, consumption and sale, which was included as one of the municipal taxes under Section 127 of the MMC Act. The said provision was amended by the Maharashtra Act No. 27 of 2009, whereby in substitution of cess, the municipal corporation was permitted to levy LBT (Local Body Tax). 14. The relevant provisions can be noted which read thus:- Section 2(31A): Definition of Local Body Tax "Local Body Tax" means a tax on the entry of goods into the limits of the city, for consumption, use or sell therein, levied in accordance with the provisions of Chapter XI-B, but does not include cess as defined in Clause 6A and Octroi as defined in Clause 42. Section 127 : Taxes to be imposed under this Act (1) ..... (2) In addition to the taxes specified in sub-section (1) the Corporation may for the purposes of this Act and subject to the provisions thereof impose any of the following taxes, namely: (a) ..... (aa) ..... (aaa) Local Body Tax o....
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....in become liable on the day his turnover of sales or purchases or imports again first exceeds the relevant limit prescribed in this behalf. Section 152D: Liability of Cess in certain cases Where on and after the date fixed by the Corporation for levy of Cess, any goods on which cess is leviable under this Chapter are imported into the limit of the City by any person (not being a registered dealer) from any place outside of the City area and sold to a registered dealer, there shall be levied and collected cess on such goods at the rates fixed by the Corporation, under the rules, from time to time, and such registered dealer shall be liable to pay the cess so levied: Provided that, no cess on the same goods shall be levied if such purchasing dealer proves to the satisfaction of the Commissioner that the cess has been paid earlier on the said goods to the Corporation. 152L. Offences and Penalties: (1) Whoever,- (a) not being a registered dealer under section 152F falsely represents that he is or was a registered dealer, at the time when he sells or buys or imports or delivers goods, or (b) knowingly furnishes a false return, or (c) knowingly produces before the Commiss....
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....ealer shall also be deemed to be guilty of such offence unless he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission thereof. (5) No prosecution for an offence under this section shall be instituted in respect of same facts on which a penalty has been imposed by the Commissioner under any provisions of this Chapter. Bombay Provincial Municipal Corporations (local body tax) Rules, 2010 Rule 33: Assessment of Local Body Tax (1) The amount of Local Body Tax due from a registered dealer liable to pay it, shall be assessed separately for each period, (2) If the Commissioner is satisfied that the returns furnished by a registered dealer in respect of any period are correct and complete, he shall assess the amount of local body tax due from such dealer, on the basis of such returns. (3) The Commissioner may assess a registered dealer who, (i) has failed to furnish returns for any period, or, (ii) has furnished all the returns in respect of all the periods on or before the date prescribed for furnishings the last return pertaining to that period, if he is not satisfied that the returns furnished by th....
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.... Act and the rules or while passing any order in any appeal or revision or rectification proceedings, it appears to the Commissioner that such dealer or, as the case may be, a person (a) ..... (b) ..... (c) has failed to disclose any entry of goods on which local body tax is leviable in the City for consumption use or sale therein or has failed to show in the return the appropriate liability to pay local body tax or has claimed inaccurate deduction, refund or has failed to disclose fully and truly all material facts necessary for the proper and correct quantification of the local body. liability, the Commissioner may, after giving the dealer or person a reasonable opportunity of being heard, by an order in writing, impose upon dealer or, as the case may be, a person by way of penalty in addition to a local body tax assessed or re-assessed or found due in the appeal or revision or rectification proceedings, as the case may be- (i) ..... (ii) ..... (iii) in the case covered by clause (c) sum not exceeding (two times) the amount of local body tax found payable under the said clause. (6)(a) If a dealer or a person does not pay the local body tax within the time he is req....
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.... Act, as challenged by the petitioner as prayed for in prayer clause (a). This for the reason that we are of the clear opinion that what was questioned by the petitioner are primarily the assessment orders, which is clear from the reading of prayer clause (b) of the petition. Illustratively prayer clause (b) of the petition reads thus:- "(b) This Hon'ble Court be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction for calling for the records of the present case and after going through the legality and validity thereof be pleased to quash and set aside the Assessment order dated 13/03/2023 for the period 2016-17 as per "Exhibit-A" raising total demand of Rs. 2,71,36,506." 16. It would quite justified for us in taking such view considering the clear averments as made in the memo of petition in paragraph 5(f) when the petitioner takes a position contrary to the well settled principles of law, i.e. when the petitioner contends that the provision of not allowing filing of a statutory appeal without deposit of the disputed tax is arbitrary, harsh and irrational (when the validity of the said provision of pre-dep....
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....ggrieved and who intend to assail the property tax bills. All these grounds are certainly grounds which can be raised by the petitioners in a statutory appeal under Section 406 of MMC Act. In our opinion, the grounds as raised by the petitioner in fact can be more effectively raised, only by taking recourse to the statutory remedy of an appeal, as each of the assessees would be required to prove on evidence, that the PMC in issuing individual bills in respect to each of these assesses, has not acted in accordance with the provisions of law and/or that in respect of such assesses there was a breach of principles of natural justice. We may also observe that all these are issues which are purely subjective and which are required to be individually adjudicated before the appellate authority. On a deeper scrutiny, it would certainly not be possible for this Court, in exercise of its writ jurisdiction under Article 226 of the Constitution of India and in such blanket manner, examine these issues, albeit camouflaged by the petitioners to be common issues. 38. If we accept the contentions as made on behalf of the petitioners, we fear that we are creating a new pattern and jurisprudence i....
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....lue, or on capital value, as the case may be and at what rate. The entire chapter dealing with Municipal Taxation comprises of provisions of Section 127 to Section 152-1A. This apart, Chapter VIII falling under Schedule 'D' of the MMC Act provides for Taxation Rules, which contains Rules 1 to 63 dealing with the assessment of taxes. It can certainly be said that the provisions of "Chapter IX (Municipal taxation)" from Section 127 to 152-1A of the MMC Act read with the "Taxation Rules" (Rule 1 to 63) incorporated thereunder is a Code by itself. Thus, on one hand the MMC Act provides substantive provisions in regard to the municipal taxation. Read with these provisions is the provision of Section 406 which forms an inextricable concomitant, of the taxing provisions, when it provides for a statutory remedy of an appeal. Thus, such provision which is integral to the mechanism of the taxing provisions, necessarily is required to be given its highest weightage, when the Court considers whether a challenge to levy or demand of tax being raised in the proceedings under Article 226 of the Constitution of India could be entertained. The petitioners' contention to disregard this provision is ....