Gujarat High Court
Oil And Natural Gas Corpn Ltd vs Palavasana Gram Panchayat & 3 on 29 January, 2008
Author: M.S.Shah
Bench: M.S.Shah, Ravi R.Tripathi
SCA/6145/2006 1/4 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION No. 6145 of 2006
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OIL AND NATURAL GAS CORPN LTD - Petitioner(s)
Versus
PALAVASANA GRAM PANCHAYAT & 3 - Respondent(s)
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Appearance :
MR RR MARSHALL for Petitioner(s) : 1,
MR HS MUNSHAW with MR RM CHAUHAN for Respondent(s) : 1, 4,
MS KRINA CALLA, AGP for Respondent(s) : 2 - 3.
NOTICE NOT RECD BACK for Respondent(s) : 2 - 3.
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CORAM : HONOURABLE MR.JUSTICE M.S.SHAH
and
HONOURABLE MR.JUSTICE RAVI R.TRIPATHI
Date : 29/01/2008
ORAL ORDER
(Per : HONOURABLE MR.JUSTICE M.S.SHAH) RULE.
Heard Mr RR Marshall for the petitioner, Mr Munshaw with Mr RM Chauhan for respondent Nos.1 and 4 and Ms Krina Calla, learned AGP for respondent Nos.2 and 3 on the question of interim relief.
2. What is challenged in this petition under Article 226 of the Constitution is the levy of property tax by respondent No.1 - Palavasna Gram Panchayat. The amount of property tax demanded by the Gram Panchayat comes to Rs.26,29,614/- for the period upto 2005-06 and a further amount of Rs.6,57,404/- is demanded as penalty for non-payment of the tax till the date of issuance of the notice.
SCA/6145/2006 2/4 ORDER
3. Mr Marshall for the petitioner - ONGC has submitted that no tax was payable by the ONGC, when it was a statutory Corporation established under the provisions of the Oil and Natural Gas Commission Act and that even after it ceased to be a statutory Corporation and became a public limited Company, it continues to enjoy the privileges of the ONGC as a statutory Corporation. In support of this contention, reliance is placed on the provisions of sub-rule (2) of Rule 7 of the Gujarat Gram and Nagar Panchayat (Taxes and Fees) Rules, 1964, which according to the petitioner, continue to apply under the provisions of the Gujarat Panchayats Act, 1993 also. Reliance is also placed on the provisions of sub- section (2) of Section 4 of Oil and Natural Gas Commission (Transfer of Undertaking and Repeal) Act, 1993, under which the undertaking of the commission which is transferred to, and which vests in the Corporation shall be deemed to include all assets, rights, powers, authorities and privileges, which the commission had.
4. On the other hand, the learned counsel for the Panchayat submits that even when the ONGC was a statutory Corporation, it was using the lands and properties in question for purposes of profit and was, therefore, not entitled to get any exemption from payment of property tax. It is further submitted that ONGC ceased to be a statutory Corporation with effect from 02.07.1993 and for SCA/6145/2006 3/4 ORDER the subsequent period also, the ONGC has no case whatsoever, when ONGC became a Public Limited Company. It is also submitted that the balance of convenience is in favour of the Panchayat as ONGC is a Public Limited Company with turn over running into tons of thousands of crores and income also running into thousands of crores of rupees. On the other hand, for the Gram Panchayat, the amount of Rs.26 lacs and odd amount is a very sizable amount, which is badly required for carrying out various development works and for administrative purposes.
5. Ms Calla, learned AGP has supported the stand of the Gram Panchayat and submitted that the petitioner is liable to pay the property tax being levied by the Gram Panchayat. Reliance is placed on the decision of a Division Bench of the Delhi High Court in International Airport Authority of India Vs. Municipal Corporation of Delhi, AIR 1991 Delhi 302, wherein the Court upheld the levy of property tax by the Municipal Corporation of Delhi on the property of the International Airports Authority of India which is a statutory Corporation established under the International Airports Authority Act, 1971.
6. Having heard the learned counsel for the parties, we are of the view that since the contentions raised by the petitioner require detailed consideration, the petition is admitted, but the balance of convenience is certainly in favour of the Gram Panchayat which is a SCA/6145/2006 4/4 ORDER local body established under the provisions of Gujarat Panchayats Act, 1993 for providing multifarious services to the local population. We, therefore, decline to grant any interim stay against recovery of the property tax levied and being levied by the Gram Panchayat. At the same time, in the facts and circumstances of the case, we are inclined to grant interim stay against recovery of penalty imposed by the Gram Panchayat.
7. In view of the above discussion, the following interim order is passed :-
The prayer for interim stay against recovery of property tax as levied by the Gram Panchayat is refused. However, there shall be interim stay against recovery of penalty imposed by the Gram Panchayat as per the notice dated 22.07.2005 (Annexure-E), subject to the condition that the petitioner-ONGC pays the amount of property tax within one month from today.
[M.S. SHAH, J.] [RAVI R. TRIPATHI, J.] mrpandya*