TaxTMI 
TaxTMI 
2023 (8) TMI 934
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....or the year 2016-17, the demand is of an amount 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 ....
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....appellant who has not deposited the required amount with the Commissioner within the prescribed period. (5) In the 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. ....
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....ely because the petitioner was purchasing goods from unregistered dealers within the municipal limits. It is his contention that in fact, the benefit of Section 152B also needs 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, ....
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.... limits of the city. The petitioner has contended that, however, the assessing officer has levied tax by invoking Section 152D and Rule 28(3) without complying with the pre-requisites of 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 averm....
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....d the manner laid down in section 406 of the Maharashtra municipal corporation Act (1949). Place: Waliv. Dated: 13/03/2023 Sd/- (Dr. Kishor Gawas) Deputy Commissioner Vasai-Virar City Municipal Corporation" 13. To appreciate as to whether the prayers as made in these petitions need to 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 de....
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....ct of the goods imported by him into the limits of the city for consumption, use or sale therein during the period commencing on the first day of April of the said year upto the time when his turnover of sales or of purchases or of imports, as computed from the first day of April of the said year does not exceed the relevant limit prescribed in this behalf. (3) Every dealer who has become so liable for payment of cess shall continue to be so liable until his registration is duly cancelled ; and shall again 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 s....
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.... of the provisions of the sub-section (1) shall, on conviction, be punished with daily fine which shall not be less than rupees one hundred during the period of the continuance of the offence, in addition to the punishment provided under this section. (3) Notwithstanding anything contained in sub-section (1), no person shall be proceeded against under that sub-section for the acts referred to therein if the total amount of cess evaded or attempted to be evaded is less than rupees two hundred during the period of a year. (4) Where a dealer is accused of an offence specified in sub-section (1), the person deemed to be the manager of the business of such dealer 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 Bod....
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....all not be earlier than fifteen days from the due date of Service thereof. (8) Any assessment made under this rule, shall be without prejudice to any penalty or interest or prosecution for an offence under the Act. (9) The order of assessment shall be in Form-I (10) An order imposing a penalty or interest under rule 48 or an order of forfeiture with or without interest penalty or interest or both in respect of any period, may be incorporated in the order of assessment relating to that period, made under this rule. (11) ..... (12) ..... (13) ..... (14) ..... Rule 48(2) and (3): Imposition of penalty and interest in certain cases: (1) ..... (2) If, while assessing or re-assessing the amount of local body tax due from a dealer or person under any provisions of the 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....
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.... the purpose of this sub-rule, a part of a month shall be counted as one month. (4) ..... (5) ..... (6) ..... (7) ..... (8) ..... (9) ..... " 15. Having heard learned counsel for the parties and having noted the legislative scheme of the MMC Act in relation to the levy and collection of Local Body Tax ("LBT"), we may observe that the municipal taxation in regard to the levy and recovery of the LBT is part of a well defined statutory scheme, which is a Code by itself. The question would be whether the petitioner has made out any exceptional case so as to be made an exception from deviating the statutory scheme and discipline as may be legitimately required in entertaining the present petition. Considering the case as avered by the petitioner in the petition, as also argued before us, we are of the clear opinion that at this stage of the proceedings we are not inclined to examine the vires of sub-section 152D of the MMC 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....
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....s contention of the petitioner is similar to one considered by the Division Bench in Kharghar Co-op. Housing Societies' case (supra). The relevant observations of the Division Bench are required to be noted which read thus:- "36. Be that as it may, we would also consider as to whether the grounds on which the present petition has been filed, in any manner are precluded to be raised, in such statutory appeal. As noted above, primarily the grounds as raised by the petitioners in the present petition are, firstly, non-adherance to the provisions of law in assessment and levy of property taxes which is quite vague, secondly, no authority to levy retrospective tax and thirdly, principles of natural justice not being followed. 37. We are not impressed with any of the grounds as urged by the petitioner so as to pursuade us to entertain this petition and/or to come to a conclusion, that the petitioners be permitted to by-pass the statutory remedy made available by law to persons who are aggrieved 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....
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....ave a foothold to maintain the present petition and that looking at the numbers albeit miniscule number of assessees, the High Court would be under some obligation, to entertain such a petition. Certainly, the law would not accept such a drastic proposition. ........... 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 provides for the prescribed manner in which the Municipal taxes may be recovered by the Rules. Section 128-A provides that the property taxes leviable on buildings and lands in the City under the Act shall include water tax, water benefit tax, sewerage tax, sewerage benefit tax, general tax, education cess, street tax and betterment charges. Section 129 provides for property taxes leviable on rateable value, 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 15....