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2023 (4) TMI 1241 - HC - Indian LawsLevy of municipal taxes in relation to only one area of the PMC namely the Kharghar Node - challenge to property tax bills, issued by the PMC to the co-operative societies who are stated to be the members of petitioner No. 1. Seeking for issuance of a writ of mandamus to cancel the bills and demand notices issued for levying retrospective tax since October, 2016 to 2021-2022 to individual members and societies of petitioner No. 1. HELD THAT - About 59 years back, a three Judge Bench of the Supreme Court in the case of Shivram Poddar Vs. Income Tax Officer, Central Circle II, Calcutta and Anr. 1963 (12) TMI 6 - SUPREME COURT has held that resort to the High Court in exercise of its extraordinary jurisdiction conferred and recognized by the Constitution in matters relating to assessment, levy and collection of tax (in such case, income-tax) may be permitted only when questions of infringement of fundamental rights arise, and where on undisputed facts the taxing authorities are shown to have assumed jurisdiction which they do not possess. In attempting to bypass the provisions of the statute by inviting the High Court to decide the questions which are primarily within the jurisdiction of the Revenue Authorities, the party approaching the Court has often to ask the Court to make assumptions of facts which remain to be investigated by the Revenue Authorities. In another decision of a three Judge Bench of the Supreme Court in Income-Tax Officer, Lucknow Vs. M/s. S.B. Singar Singh Sons Anr. 1976 (8) TMI 5 - SUPREME COURT , it was held that the High Court was not justified in deciding the matter primarily within the jurisdiction of the revenue authorities by entertaining a writ petition. The relevant provisions of MMC Act read with the Rules, creates a robust statutory mechanism not only in respect of everything leading to the levy and collection of taxes but also providing for a specific statutory remedy of an appeal under Section 406 of the MMC Act of an appeal being provided, if a person is aggrieved by the fixation of a rateable value or capital value or 'tax fixed' or 'charged' under MMC Act, to be assailed in such appeal, which is to be filed before the Judge as defined under Section 2(29) of the MMC Act - as per provisions of sub-section (2A) of Section 406 of MMC Act, when such appeal is not filed in accordance with the provisions of clause (e) of sub-section (2), it shall be liable to be dismissed. It appears that for such reasons, it is not convenient for the member societies of petitioner no. 1 to take recourse to alternate statutory remedy as provided under Section 406 of the MMC Act to assail the bills in question. A bare reading of Section 150A shows that it is a widely worded provision. It has an overriding effect over the other provisions of the Act and the Rules. It would not be a wrong reading of the said provision, if it is observed that such provision, would take within its ambit such situations whereby the municipal corporation could not levy taxes for a retrospective period. This would certainly include the situation as in the present case, namely, the difficulties such as in the present case, when municipal taxes are being imposed after some years of the formation of the municipal corporation as for finalizing the levy of taxes in relation to all the properties within the municipal corporation, is a long drawn process which cannot be overnight. Thus, in view of the clear provisions of Section 150A, the contention of the petitioners that there was no authority with the municipal corporation to levy taxes for the past period in respect of which the bills have been issues, is totally untenable. The petition is neither maintainable as framed, nor the same can be entertained under Article 226 of the Constitution of India. It is accordingly dismissed.
Issues Involved:
1. Maintainability of the Petition. 2. Authority to Levy Retrospective Tax. 3. Breach of Principles of Natural Justice. 4. Locus Standi of Petitioner No. 1. Summary: Issue 1: Maintainability of the Petition The Court examined whether the petition challenging the property tax bills issued by the Panvel Municipal Corporation (PMC) is maintainable. The PMC argued that the petitioners have an effective and efficacious alternative remedy of filing an appeal under Section 406 of the Maharashtra Municipal Corporation Act (MMC Act). The Court agreed, emphasizing that the statutory remedy of an appeal should not be bypassed, especially in tax matters. The Court cited several Supreme Court decisions, including "Shivram Poddar Vs. Income Tax Officer" and "Titaghur Paper Mills Co. Ltd. Vs. State of Orissa," to support the principle that the High Court should not entertain writ petitions when an alternative statutory remedy is available. The Court concluded that the petition is not maintainable as framed and dismissed it, allowing the petitioners to avail of the statutory remedy of an appeal under Section 406 of the MMC Act. Issue 2: Authority to Levy Retrospective Tax The petitioners contended that the PMC's levy of retrospective property taxes from October 1, 2016, to 2021-2022 was illegal. The Court examined Section 150A of the MMC Act, which allows the Commissioner to assess and demand taxes for a retrospective period of up to six years if a person liable to pay taxes has escaped assessment. The Court found that the PMC's actions were in accordance with this provision and rejected the petitioners' contention. The Court also noted that the decision in "Satish Dattatray Shivalkar (Dr.) Vs. Pimpari Chinchwad Municipal Corporation" was not applicable to the present case as it predated the incorporation of Section 150A. Issue 3: Breach of Principles of Natural Justice The petitioners argued that the PMC had breached principles of natural justice in levying the property taxes. The PMC countered that it had followed due process, including issuing special notices, inviting objections, and providing personal hearings to property owners. The Court found that the PMC had adhered to the statutory provisions and procedures, including the issuance of notices and conducting hearings. The Court concluded that the petitioners' allegations were vague and unsubstantiated. Issue 4: Locus Standi of Petitioner No. 1 The PMC raised a preliminary objection regarding the locus standi of Petitioner No. 1, a federation of co-operative housing societies. The PMC argued that Petitioner No. 1 had no cause of action or legal injury to maintain the petition. The Court agreed, stating that only a person who has suffered a legal injury can challenge an act or order in a court of law. The Court cited the Supreme Court's decision in "Ayaaubkhan Noorkhan Pathan vs. State Of Maharashtra & Ors." to emphasize that a "person aggrieved" must have a legal right or interest adversely affected. The Court concluded that Petitioner No. 1 did not meet this criterion and could not maintain the petition. Conclusion The Court upheld the PMC's preliminary objections and dismissed the petition, allowing the petitioners to pursue the statutory remedy of an appeal under Section 406 of the MMC Act. The Court emphasized that entertaining such petitions would set a detrimental precedent and open floodgates for similar litigation, thereby undermining the statutory appeal process.
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