TaxTMI 
TaxTMI 
1987 (1) TMI 80
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.... was questioned by the allottees. The learned single judge upheld the validity but the Division Bench in appeal' took a contrary view. The Municipal Corporation has preferred the present appeal 2 and has contended that the learned single judge was right in upholding the levy and the Division Bench was wrong in holding it invalid. The facts giving rise to the writ petition instituted by the 72 allottees to whom the houses were allotted need to be stated briefly: The Hyderabad Municipal Corporation started a scheme called Low Income Housing Scheme in 1957. In pursuance of that scheme, the Corporation constructed several houses in various parts of the Hyderabad City including the locality of Malakpet. After the houses at Malakpet were co....
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....ons, if any, within 15 days of the receipt of the notice. The writ petitioners accordingly filed their objections on 29-4-1965. The principal contention of the petitioners was that the houses are not liable to be taxed as they vest in the Municipal Corporation and as the writ petitioners are not the owners of the houses. Negativing this contention, the Municipal Corporation served a notice dated 19-6-1966 demanding from, the petitioners taxes for the period commencing from 1st April, 1961, to 31st March, 1965. It is this demand notice which has given rise to the writ petition, and, in turn, giving rise to the present appeal. The challenge to the levy of taxes is built on the argument that inasmuch as the houses under the hire purchase ag....
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....t used. or intended to be used for purposes of profit in respect of which the said tax, if levied, would under the provisions hereinafter contained be primarily leviable from the Central Government or State Government, as the case may be." "204. (1) Property taxes shall be leviable primarily from the actual occupier of the premises upon which the said taxes are assessed if such occupier holds the said premises immediately from the Government or from the Corporation." It is no doubt true that until all the instalments under the hire purchase agreement were paid, the allottees would not become the owners of the houses for the title would vest unto them only upon the payment of all the instalments as per the stipulations contained in the....
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....ested in such a user. The same principle is discernible in regard to clause (b) which provides for exemption in regard to lands or buildings solely occupied for public worship or for charitable or educational purposes. The same philosophy is discernible in the exemption accorded under clause (d) to properties belonging to the Central or State Government which are used solely for a public purpose. Be it realised that clause (d) makes it abundantly clear that the exemption will not be extended to properties belonging to the Central Government and State Government if the same are used for purposes of profit and not for a public purpose. The user for the purposes of the community is the rationale of the thread of principle which runs through al....
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....ngs and lands vesting in the Corporation " is not very happily or perfectly worded. Had it been drafted with the care and precision to be expected from a perfect draftsman (who exists only in theory and not in practice), there would have been no scope for the controversy. But then if the entire scheme is viewed in a common sense manner so that the scheme makes sense, the matter cannot present any serious problem. Section 204(1) which is a part of the packet of sections relating to this subject-matter clinches the issue in favour of the Municipal Corporation of Hyderabad, the appellant herein. It, in terms, provides that property taxes shall be leviable primarily from the actual occupier of the premises upon whom the said taxes are assessed,....
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....ossession or under the actual use and occupation of someone else, that is to say, persons or bodies other than the Corporation itself are not exempted. In order to attract section 202(1)(c), it must be established that the property must satisfy a dual test. The property must not only be owned by the Corporation, it must also be in the occupation of the Corporation itself. It is in this sense that the word " vesting " has been used. And the proposition that the expression " vest " is capable of being used in this sense, depending on the context in which it is employed, is supported by the observations made by this court in Fruit & Vegetable Merchants Union v. Delhi Improvement Trust, AIR 1957 SC 344. It has been observed therein that the wor....