Issues involved: Interlocutory order restraining municipality from recovering graduated consolidated rate u/s 123 and 124 of Bengal Municipal Act, 1932 as amended by Bengal Municipal (Amendment) Act, 1980.
Judgment Details:
The Supreme Court expressed concern over the trend of High Courts granting interlocutory orders too easily, emphasizing that stays on tax recovery should be exceptional, not the norm. The Court highlighted that the mere filing of a writ petition does not render a levy invalid, and the focus should be on preventing prejudice to rate payers. It was noted that requiring the levying authority to give an undertaking to refund or adjust the levy if found invalid is a suitable approach, rather than immediately halting tax collection. The Court recognized the need to balance protecting taxpayers with ensuring the municipality's ability to provide essential services and meet financial obligations.
The Court criticized a previous instance where an interim order was vacated by a Division Bench but later reinstated without proper reasoning. Emphasizing the importance of self-discipline and institutional respect, the Court urged High Courts to carefully consider the implications of interim orders on public interest and institutional functioning. The Court stressed the necessity of maintaining decorum and comity in such matters and highlighted the importance of striking a delicate balance between preserving public interest and avoiding irreparable harm.
In conclusion, the appeal was allowed, setting aside the High Court's order restraining the municipality from collecting the graduated consolidated rate. The Siliguri Municipality undertook to refund the rate difference if the writ petition succeeded. No costs were awarded in the case.
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