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Showing contexts for: mcd act in Pradeep Oil Corporation vs Municipal Corporation Of Delhi & Anr on 6 April, 2011Matching Fragments
6. Subsequent to that the appellant raised various constructions comprising of an administration block etc. along with huge petroleum storage tanks for storing petroleum products. A boundary wall around the installations and the administrative block was also constructed. The nature of the construction which is stated to be wide range and extensive user, is more than 40 years old now.
7. The respondent MCD vide its Order dated 17.08.1984 passed an assessment order with regard to the property tax qua the aforesaid property and confirmed the rateable value proposed by it. The said assessment order was challenged by the appellant before the appellate Court/MCD Tribunal which vide its Order dated 12.7.1985 set aside the assessment order passed by the respondent MCD and held that the appellant is only a licensee in the property and is not a tenant, therefore, no property tax can be levied on the appellant under Section 20(2) of the Delhi Municipal Corporation Act, 1957 (in short "MCD Act"). Aggrieved by the aforesaid order of the appellate Court, the respondent MCD filed a writ petition. However, the said writ petition was dismissed by the Ld. Single Judge of the Delhi High Court on 05.08.1986 holding that the petroleum storage tanks do not fall within the definition of building under the MCD Act. It was further held by the Ld. Single Judge that the grant in favour of the petitioner was a license and hence the petitioner is not liable for the payment of any property tax in respect of the land or the petroleum storage tanks. Challenging the aforesaid order of Ld. Single Judge, an LPA was filed and subsequently, the same was referred to a Full Bench of High Court. The Full Bench of the High Court vide its impugned judgment and order dated 17.09.2002 held that the petroleum storage tanks are a building and the petitioner was a lessee and not a licensee in the property in question.
The exceptions thereof have been enumerated in the Act itself. Section 119 of the MCD Act is one of such provisions.
Such an exemption clause, as is well known, must be construed strictly. Section 119 of the MCD Act would apply if the lands and buildings are the properties of Union of India. The MCD has the right to levy the property tax in terms of Section 114 of the MCD Act in the manner as specified therein.
40. By reason of the agreement in question, the buildings in question do not belong to the Administration. Admittedly, it belongs to the grantee i.e. appellant herein. As discussed hereinbefore, the Oil tanks has been construed as buildings for the purposes of tax. Therefore, Section 119 of the MCD Act would not apply to the building in question. That being the case, the grantee/appellant is liable to pay tax although the ownership of the land may belong to the Administration. Section 115 of the MCD Act clearly provides that the general tax shall be payable in respect of lands and buildings. Such lands and buildings may be in lawful occupation of the owner. The occupation of the said building may be lawful or unlawful. Even in a case where apartments are constructed on the land belonging to the Government or a statutory body but the occupier of the apartment is liable to pay tax. If a person encroaches upon somebody's lands and constructs buildings thereupon, he would also be liable to pay tax. Once it is held that the grantee were liable to pay tax, the same becomes payable from the date of accrual of the liability. The said position is also fortified from specific stipulation in the agreement that the liability to pay all taxes including municipal taxes is on the grantee.
41. The learned counsel for the appellant has placed strong reliance on the decision of this Court in HUDCO v. MCD;
(2001) 1 SCC 455 to contend that land belonging to the government is immune from the payment of property tax by virtue of section 119(1) of the DMC Act and Article 285 of the Constitution of India. In the HUDCOs case vacant land of the government, prior to execution of the lease deed in favour of HUDCO, was sought to be taxed and that no building had been constructed by HUDCO. HUDCOs own case was that interest in land could pass only on execution of lease and construction thereon under section 120(2) of the MCD Act. MCD had invoked Section 120(1) DMC Act to fasten liability on HUDCO and not under Section 120(2) DMC Act after construction was made by HUDCO and lease deed executed bythe government. In that case, this Court has held that vacant land belonging to the Government was not taxable by virtue of section 119 DMC Act and Article 285 of the Constitution of India. However, in our considered view, the case at hand is totally different. The HUDCO judgment dealt with the case where vacant land belonging to the lessor/Government and in regard whereto no lease deed had been executed and no construction had been made by the lessee/HUDCO. The land belonging to the central government was sought to be taxed under section 120(1) of the DMC Act which fastens liability on the lessor. Since land belonged to UOI the same was exempted from payment of tax until the lease deed was executed and construction made thereon by HUDCO-under Section 120(2).