9911796707
TMI Blog2004 (1) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... vision is by way of tax. Undisputedly, the appellant-Corporation is collecting the tax from general public for water supply, street lighting and approach roads etc. Thus, the tax was sought to be imposed in the garb of service charges . The interplay of the constitutional and legal provisions being well cut and well defined, it was clearly not within the competence of the Corporation to impose tax on the property of the Union of India, the same being violative of Article 285(1) of the Constitution. Furthermore, the issues raised herein are no more res-integra. This Court, in Union of India v. Purna Municipal Corporation Ors. [ 1991 (9) TMI 371 - SUPREME COURT] considered an identical question and held that Section 135 of the Railways Act, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter before the High Court, which was allowed and the aforesaid notice was set aside. The High Court, having noticed the earlier judgment of the Division Bench dated 19th December, 2000, held inter-alia that the demand of service charges made by the Municipal Corporation was violative of Article 285 of the Constitution. We have heard learned counsel for the parties. The questions revolve around for determination in this appeal are: (a) Whether the demand for service charges, so made by the Corporation against the respondents is by way of `service charge' or by way of 'tax'? (b) If it is held that the demand so made was by way of `tax', whether the same is violative of Article 285(1) of the Constitution of India. Before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Government are payable by the respective Dept. to the Municipal Corporation of the rates varying from 33.1/25% to 75% as decided by the Government of India, Ministry of Finance in its letter No. 14(1) P/52-I dated 10.5.54 and No. 4(7) P/65, dated 29.3.67 (copy enclosed). According to para (ii)(c) of the letter dated 29.3.67, in respect of colonies where all the services normally are provided by the Municipal Corporation to the residents of other areas are being availed of, Service charges will be paid at 25% of the property tax rate realized from the private individuals. The next ratable value/annual value for the purpose of these instructions shall be 9% of the capital value of the property concerned both in respect of residential an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India, as referred to above. We are unable to countenance with this contention of the learned counsel. The circulars, aforesaid, issued by the Union of India were administrative in nature. It is now settled principle of law that administrative circulars cannot override the constitutional provisions. The Government of India circular, as referred to above, was issued by one Deputy Secretary to the Government of India. By no stretch of imagination such circulars, issued by the Deputy Secretary to the Government of India, can be said to have any overriding effect over the mandate of Article 285(1) of the Constitution. We are, therefore, of the view that the circulars so issued, as noticed above, do not alter the position with regard to the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. Furthermore, the issues raised herein are no more res-integra. This Court, in (1992) 1 SCC 100 Union of India v. Purna Municipal Corporation & Ors. considered an identical question and held that Section 135 of the Railways Act, being an Act of the Central Government and saved by clause (1) of Article 285 of the Constitution, clause (2) of Article 285 was not attracted, and the Municipal Corporation was restrained from demanding tax by way of service charges from railways. This is what this Court has said in para 5 of that judgment: "The aforesaid provisions, existing as it is, in terms permits taxation of railways by the local authority in the manner given therein; the Central Government being the controlling and the regulating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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