Uttarakhand High Court
M/S Friends Glass & Glazing Pvt. Ltd vs State Of Uttarakhand And Ors on 12 February, 2019
Equivalent citations: AIR 2019 UTTARAKHAND 64, (2019) 1 UC 409, AIRONLINE 2019 UTR 13
Author: Lok Pal Singh
Bench: Lok Pal Singh
Reserved Judgment
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Writ Petition (M/S) No. 328 of 2018
M/s Friends Glass & Glazing Pvt. Ltd .......Petitioner
Versus
State of Uttarakhand and ors. ......Respondents
with
Writ Petition (M/S) No. 3273 of 2015
M/s Singhal Spintx Pvt. Ltd. & anr. .......Petitioners
Versus
State of Uttarakhand and ors. ......Respondents
with
Writ Petition (M/S) No. 3276 of 2015
M/s Lohia Auto Industries & anr. .......Petitioners
Versus
State of Uttarakhand and ors. ......Respondents
with
Writ Petition (M/S) No. 3278 of 2015
M/s PVM Nutrient Products Pvt. Ltd and anr.
......Petitioners
Versus
State of Uttarakhand and ors. ......Respondents
with
Writ Petition (M/S) No. 3289 of 2015
M/s Flexituff International Ltd. and anr. .......Petitioners
Versus
State of Uttarakhand and ors. ......Respondents
with
Writ Petition (M/S) No. 64 of 2016
M/s Sheikh Bhullan & sons and anr. .......Petitioners
Versus
State of Uttarakhand and ors. ......Respondents
2
with
Writ Petition (M/S) No. 65 of 2016
M/s Gupta Power Infrastructure Ltd. and anr.
.......Petitioners
Versus
State of Uttarakhand and ors. ......Respondents
with
Writ Petition (M/S) No. 66 of 2016
M/s Rizwan Export House and anr. .......Petitioners
Versus
State of Uttarakhand and ors. ......Respondents
with
Writ Petition (M/S) No.67 of 2016
M/s Kalptaru Auto Part & anr. .......Petitioners
Versus
State of Uttarakhand and ors. ......Respondents
with
Writ Petition (M/S) No. 68 of 2016
M/s Bakers Circle India Pvt. Ltd. & anr.
.......Petitioners
Versus
State of Uttarakhand and ors. ......Respondents
with
Writ Petition (M/S) No. 82 of 2016
M/s V.R.B. Foods Pvt. Ltd. and anr. .......Petitioners
Versus
State of Uttarakhand and ors. ......Respondents
and
Writ Petition (M/S) No. 108 of 2016
Smt. Madhu Singh .......Petitioner
Versus
State of Uttarakhand and ors. ......Respondents
3
Mr. Atul Kumar Bansal, Advocate for the petitioners.
Mr. Yogesh Pandey, Addl. C.S.C. for the State.
Mr. Shiv Pande, Advocate for the Nagar Palika Parishad.
Mr. Vipul Sharma, Advocate for SIDCUL.
Mr. Davesh Bishnoi, Advocate for the intervener.
Chronological list of cases cited
1. (1984) 2SCC 436 Siliguri Municipality & ors. vs. Amalendu Das &
ors.
2. 1954 AIR (SC) 282 Commissioner, Hindu Religious Endowments,
Madras vs. Lakshmindra Thrtha Swamian or Shirur Mutt
Hon'ble Lok Pal Singh, J.
By means of these batch of petitions, filed under Article 226 of the Constitution of India, the petitioners have challenged the imposition of property/ house tax by the Nagar Palika Parishad, Mahuakhera Ganj, District Udham Singh Nagar and relief has been sought for quashing the demand notice dated 22.08.2015 and recovery citation dated 28.10.2015
2. Since, controversy involved in these batches of petitions is similar; therefore, same are being decided by common judgment.
3. Learned counsel for the petitioners would submit that since the pleading of WPMS No. 1328 of 2018 is in detail, therefore, same may be considered as a leading case.
4. Factual matrix of the case are that petitioners are private limited companies, duly registered under the Companies Act, engaged in manufacturing of different items and also the members of Kumaon Garhwal Chamber of Commerce and Industry. The State Government of Uttarakhand vide notification no. 324/Industrial Section/07-industries/2005-06 dated 29.09.2005, notified the area of Nand Nagar Industrial 4 Estate as a industrial township, also known as Nand Nagar Industrial Estate Phase I and Phase II, and granted permission to private developers, namely, Anshul Jindal and Apporv Jindal for development of industrial area, comprising of 34.29 acres of land, situated at Mahuakhera Ganj, District Udham Singh Nagar and to provide all the amenities, road etc. in the industrial township.
5. It is the contention of the learned counsel for the petitioners that in the year 2013, second respondent- Nagar Palika Parishd started imposing property/house tax over the industrial units situated in the industrial township of Nand Nagar Industrial Estate, Phase I & II. On 20.11.2013, petitioners served a notice through KGCCI to the second respondent in regard to the illegal imposition of property/house tax over the members of the industrial units, which is without jurisdiction, to which second respondent gave its reply on 10.12.2013 stating therein that second respondent has got jurisdiction to impose property/house tax over the construction raised by the petitioner. Subsequently, on 26.09.2013, second respondent-Nagar Palika Parishad issued demand notice, imposing the house tax over the petitioners' companies and on 10.02.2015 published public notice dated 10.02.2015 in the daily newspaper Dainik Jagran mentioning therein if property/ house tax imposed is not deposited with respondent no. 2 up to 25.02.2015, then same will be recovered as arrears of land revenue.
6. The petitioners have challenged the imposition of property/house tax and recovery citation on the ground that in view of proviso to the Article 243-Q of the Constitution of India, the Municipality under this clause 5 may not be constituted in such urban area or part thereof as the Governor may, having regard to the size of the area and the municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as he may deem fit, by public notification, specify to be an industrial township. It is contended that the Notification was issued by the State of Uttarakhand on 29.09.2005 permitting the private developer to develop an industrial area and also provide all the amenities like electricity, water and roads etc. to the industrialist. Nagar Panchayat Mahuakhera Ganj (now Nagar Palika Parishad) was constituted through Gazette Notification dated 27.02.2010 and came into existence after the Notification dated 29.09.2005, has got no jurisdiction to impose house/property tax over the petitioners' properties situated in Nand Nagar Industrial Area Phase-I and II.
7. First respondent-State has filed its counter affidavit stating therein that His Excellency Governor of State of Uttarakhand, by virtue of powers vested under Clause (1) of Article 243-Q of the Constitution of India, vide notification dated 03.12.2015 upgraded the entire areas of Nagar Panchayat Mahuakheraganj to Municipal Council/Nagar Palika Parishad, which falls within the municipal limits of the second respondent, therefore, second respondent is fully empowered to impose tax thereon, as per the provisions of Constitution of India as wall as U.P. Municipalities Act 1916 (as applicable in the State of Uttarakhand). (Herein after referred as the Act).
8. A counter affidavit has been filed by the second respondent-Nagar Palika Parishad stating therein that the petitioners have concealed the material facts from this Court when filed the respective writ petitions. It is 6 contended on behalf of the second respondent that Nagar Panchayat, Mahuakhera Ganj was constituted vide Gazette Notification dated 28.02.1985 by the erstwhile State of Uttar Pradesh and the territorial jurisdiction of the second respondent was also fixed in the said Notification. It is further contended that the Government of Uttarakhand issued the Notification in the month of September 2005, proposed to establish M/s Nand Nagar Industrial Estate Phase I & II, which includes approximately 15.94 acres and 24.651 acres respectively including land comprising Khasra No. 109, 111, 1180, 1200, 1203, 1204, 1205/1, 1205/2, 1205/3, 1211, 1216 min, and 1228 of Nagar Panchayat, Mahuakhera Ganj, District Udham Singh Nagar. It is also contended that the Notification dated 03.12.2015 was issued after the Notification dated 09.01.2008 i.e. formation of Nand Nagar Industrial Estate. It is further contended that Developers i.e. M/s Anshul Jindal S/o Vijay Jindal and Apoorv Jindal S/o Sh. Yogendra Kumar Jindal, who were entrusted to develop Nand Nagar Industrial Estate at Mahuakhera Ganj, District Udham Singh Nagar had applied before the second respondent for sanction of the map for the establishment of Nand Nagar Industrial Estate under the provisions of the Act and same was approved by the second respondent vide sanction letters dated 24.03.2008 and 04.01.2008 after completion of necessary formalities. But, the petitioners, while filing the writ petitions, have concealed all these material facts.
9. It is further contended on behalf of the second respondent that notices under section 143(1) of the U.P. Act were sent to the petitioners for payment of house/ property tax and also opportunity was afforded to the petitioners to place their objections within 30 days. The petitioner vide letter dated 21.04.2014 sent its objection.
7The petitioners were given opportunity of personal hearing and thereafter objections were disposed of and order of assessment was passed. The petitioners were directed to deposit the property/house tax. Again, on 26.09.2013 notices were sent to the petitioner to deposit the property/house tax but the petitioners did not comply with the demand notice, and, subsequent thereto, recovery citations were issued. It is further contended that since the petitioners have concealed the material fact from this Court, the writ petitions are liable to be dismissed with cost on this ground alone besides the fact that the second respondent has got jurisdiction and authority to impose the house tax. It is further contended that if the petitioners were aggrieved by the imposition of house/property tax, the petitioners have an statutory remedy to file an appeal under section 160 of the Municipalities Act.
10. Fourth respondent-SIDCUL has filed its counter affidavit stating therein that the provision of U.P. Industrial Area Development Act, 1976 has an overriding effect. Therefore, in view of Section 11 of the U.P. Industrial Area Development Act, 1976, fourth respondent is competent to levy of tax for the purpose of providing, maintaining or continuing any amenities in the industrial development area with the previous approval of the State Government. In the counter affidavit reliance has been placed upon judgment of the co-ordinate Bench of this Court rendered in the case of M/s Rewati Print O Pack vs. State of Uttarakhand and others in WPMS no. 636 of 2014, wherein it has been held that SIDCUL is not under the control of Zila Panchayat and Zila Panchayat has got no jurisdiction to impose tax.
811. Heard learned counsel for the parties, and perused the entire material on record.
12. Learned counsel for the petitioners has challenged the imposition of tax on the sole ground that in view of proviso to Article 243-Q of the Constitution of India second respondent has got no jurisdiction to impose house/property tax. He would further submit that since Nand Nagar Industrial area has been developed by its developers and no facilities is being provided by the second respondent, therefore second respondent has got no authority to impose the house/property tax.
13. Per contra, learned counsel for the second respondent would submit that developers of Nand Nagar had applied for sanction of map for establishment of Nand Nagar Industrial Area and subsequent, thereto, petitioners had applied for sanction of the map before the second respondent for erecting building on the land under the provisions of Section 178 of the Act and the same was approved by the Executive Officer of the second respondent on 12.03.2007.
14. In alternative, learned counsel for the petitioners would submit that, since, no facilities have been provided by the second respondent to the petitioners, therefore, second respondent has got no authority to impose tax.
15. Learned counsel for the second respondent, in support of his submission, has placed reliance upon the judgment of Hon'ble Apex Court in the case of Siliguri Municipality and others1. He further placed reliance upon the judgment of Hon'ble Apex Court in the case of Commissioner, Hindu Religious Endowments, 9 Madras2 wherein the Constitution Bench of seven Judges has placed reliance on the judgment of High Court of Australia in "Matthews v. Chicory Marketing Board" has elaborately gave definition of tax. A tax, according to the learned Chief Justice, "is a compulsory exaction of money by public authority for public purpose enforceable by law and is not payment for service rendered".
16. Learned counsel for the SIDCULhas fairly admits the fact that fourth respondent has not imposed or levied tax upon the petitioners. He further admits that the ratio of the judgment passed by the co-ordinate Bench is entirely different and is not applicable in the present case.
17. Section 7 of the U.P. Municipalities Act caste duties upon the Municipality in the Municipal area. For kind reference, section 7 of the U.P. Act is extracted hereunder:-
7. Duties of [Municipality]. - (1) It shall be the duty of every [Municipality] to make reasonable provision [within the municipal area for], -
(a) lighting public street and places;
(b) watering public streets and places;
[(bb) making a survey, and erection of boundary marks, of the Municipality;]
(c) cleaning public sheets, places and drains, removing noxious vegetation, and abating all public nuisances;
(d) regulating offensive, dangerous or obnoxious trades, callings or practices;
[(dd) confinement, removal or destruction of stray dogs and dangerous animals;]
(e) removing, on the ground of public safety, health or convenience, undesirable obstructions and projection in streets or public places;
(f) securing or removing dangerous buildings or places;
(g) acquiring, maintaining, changing, and regulating places for the disposal of the dead [and making arrangements for disposal of unclaimed dead bodies after ascertaining from the police in writing that there is no objection to do so;] 10
(h) constructing, altering and maintaining public streets, culverts, [markets]latrines, privies, urinals, drains, drainage works and sewerage works;
[(hh) reclaiming unhealthy localities;]
(i) Planting and maintaining trees on road sides and other public places;
[(ii) providing water supply for domestic, industrial and commercial purposes;]
(j) providing a sufficient supply of pure and wholesome water where the health of the inhabitants is endangered by the insufficiency or unwholesomeness of the existing supply, guarding from pollution water use for human consumption and preventing polluted water from being so used;
[(jj) maintaining in addition to any other source of water supply, public wells, if any, in working condition, guarding from pollution their water and keeping it fit for human consumption;]
(k) registering births and deaths;
(l) establishing and maintaining a system of public vaccination;
(m) establishing maintaining or supporting public hospitals and dispensaries, and providing public medical relief; [(mm) establishing, maintaining and assisting maternity centres and child welfare and birth control clinics and promoting population control, family welfare and small family norms;] [(n) maintaining or contributing to the maintenance of veterinary hospitals;] [(nn) establishing and maintaining or guaranteeing aid to institutions of physical culture;] [(o)] establishing and maintaining primary schools; [(p)] rendering assistance in extinguishing fires and protecting life and property when fires occur; [(q) protecting, maintaining and developing the property vested in, or entrusted to the management of the] [Municipality];
[(qq) maintaining the finances of the] [Municipality] in satisfactory condition and meeting its liabilities; [(r)] [prompt attention to official letters and preparation of] such returns, statements and reports as the [State Government] requires the [Municipality] to submit; and [(s)] fulfilling any obligation imposed by law upon it; [(t) regulating tanneries;
(u) construction and maintenance of parking lots, bus stops and public conveniences;
(v) promoting urban forestry and ecological aspects and protection of the environment;
(w) safeguarding the interests of weaker sections of society including the handicapped and mentally retarded;
11(x) promoting cultural, educational and aesthetic aspects; (y) constructing and maintaining cattle pounds and preventing cruelty to animals;
(z) slum improvement and upgradation;
(za) urban poverty alleviation;
(zb) providing urban amenities and facilities such as gardens, public parks and play grounds.]
18. Sub-Section (i) of section 128 of the Act empowers the Municipal Board to impose tax on the annual value of the building or land or both.
19. The argument of the learned counsel for the petitioner that second respondent has got no authority to impose the house/property tax in view of proviso to Article 243-Q of the Constitution of India has no force. The State Government has notified the area in question as Municipal area and decision of the State Government has not been challenged, thus, the proviso to Article 243- Q of the Constitution of India does not apply in the present case. Second submission of the learned counsel for the petitioner is that since all the amenities are being provided by the developers of the Nand Nagar Industrial Estate and second respondent is not providing any amenities to the petitioners, therefore, second respondent cannot impose any tax. The submission is also misconceived. The second respondent has got authority to impose the house/property tax or tax on land in view of Sub-Section (i) of section 128 of the Act. The building tax is not in lieu of any kind of service rendered by the second respondent. There is distinction between tax and fee. Imposition of tax is by the statute, empowering the authority to impose the tax whereof imposition of fee is in regard to the services rendered by an authority.
20. Since, Mahuakhera Ganj Municipality/Nagar Panchayat, Mahuakheraganj which was notified in the 12 year 1985 and its area has been increased subsequently by the notification of the Hon'ble Governor, State of Uttarakhand and property of the petitioners comes within the territorial jurisdiction of the second respondent, the second respondent has got authority to impose the building tax upon the petitioners' property. The petitioners have deliberately concealed the fact that the developers of Nand Nagar Industrial Area Phase I and II got sanctioned the map from the second respondent and thereafter the petitioners have also got sanctioned their respective map from the second respondent. The petitioners who are approaching this Court under Article 226 of the Constitution of India are not coming with clean hand, thus they are not entitled for any relief on this score only. However, on merits, this Court finds that the second respondent has got authority to impose the tax upon the petitioners' property as the same is within the territorial jurisdiction of the second respondent and the tax has rightly been imposed upon the petitioners. The writ petitions are devoid of merits and liable to be dismissed with cost, as the petitioners have concealed the correct facts when filed the writ petitions and succeeded to obtain the interim order and have not paid the tax to the second respondent since 2016.
21. In view of the above, the writ petitions are dismissed. Cost of ` 20,000/- is saddled on each of the petitioners.
(Lok Pal Singh, J.) 12.02.2019 Parul 13
14. The alternative argument of the petitioners has no force at all, as the imposition of tax is not in regard to any service provided by the Municipal Corporation rather the house tax imposed by the municipal corporation is for the development of the entire municipal area. Therefore, second respondent has a right to impose tax.
14For the sake of the arguments, if the petitioners are aggrieved by the notification, inclusion of the revenue village of Mahuakhera Ganj to Mahuakhera Ganj Nagar Palika, they may have challenged the notification but they may not do so. Therefore, without there being any challenge to the notification, submissions of the learned counsel is misconceived.