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TMI Blog2017 (4) TMI 1152X X X X Extracts X X X X X X X X Extracts X X X X ..... hat interest or penalty charged under the Act, by definition, comes within the expression 'tax' used in subsection (1) of Section 406. Appeals merely lie against the matters provides for in subsection (1), which include 'tax'. Subsection (2) carves out certain cases from out of the larger class of appealable matters, where special conditions for filing of appeals are provided. There is no reason to specially provide for cases of appeals from interest or penalty charged (where there is a provision of complaint to the Commissioner), if such cases were not to fall, in the first place, in the category of appealable cases. For all these reasons, it is obvious that any interest or penalty charged is included in the expression 'tax' used in Section 406(1) and is appealable as such. Once we come to the conclusion that penalty charged under Section 267A is appealable, we see no reason not to relegate the aggrieved assessee to the statutory appellate forum. We have already discussed this aspect in the order above whilst dealing with conservancy tax under Section 131 of the Act. All contentions of the Petitioner on merits of the levy, some of which have been noted above, are open to it, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of items (ii) and (iii) before the appellate forum under Section 406 of the Act. The statement is accepted. All rights and contentions of the parties on merits of these items are kept open. 5 Let us now take up the three individual items pressed before us. The first item is conservancy tax levied by Respondent No.1. Section 131 of the Act provides for such levy. The section is in the following terms : 131. Conservancy tax or sewerage tax and sewerage benefit tax on what premises to be levied. (1) The conservancy tax or sewerage tax shall be levied only in respect of premises,- (a) situated in any portion of the City in which, public notice has been given by the Commissioner that the collection, removal and, disposal of all excrementious and polluted matter from privies, urinals and cesspools, will be undertaken by municipal agency; or (b) in which, wherever situate, there is a privy, water closet, cesspool, urinal, bathing place or cooking place connected by a drain with a municipal drain: Provided that the said tax shall not be levied in respect of any premises situate in any portion of the City specified in clause (a), in or upon which, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mits that the error here is jurisdictional and calls for an interference under Article 227. Every levy, which is not supported by law, can always be termed as wanting in authority or jurisdiction. There is no reason why it should not be left to the appellate forum under the taxing statute. The Corporation in the present case has the requisite power to tax the subject if it finds that the requisite conditions of the taxing provision are satisfied. The grievance really is that the authority has come to an erroneous finding as to the existence of these conditions. That ordinarily should be a subject matter of a statutory appeal provided for by the legislature. 7. Coming now to the last two items, namely, shasti on illegal constructions and penalty, Mr.Tulzapurkar has a two fold submission to offer. Firstly, it is submitted that there is no hearing given to the Petitioner before levying shasti (which is nothing but penalty provided for in Section 267A of the Act) or penalty, which is implicit in Section 267A of the Act. Secondly, it is submitted that there is no compliance on the part of the Respondent corporation of the order passed by this court on 7 May 2013, when the matter was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the expression tax used in Section 406. 9 In Jagdishprasad Ramnath's case, our court considered the question as to whether there is a right of appeal against an order imposing penalty by way of interest calculated in the manner laid down under Section 18A of the Income Tax Act, 1931. Such interest was payable in a case where after the regular assessment had been paid, the IncomeTax officer discovered that no advance tax had been paid. The assessee in that case had not paid advance tax and accordingly, penal interest was imposed by the ITO under Section 18A. Though there was no specific provision of an appeal against an order passed under Section 18A, the argument of the assessee was that the general words used in the appellate provision of Section 30(1) (i.e. that an assessee denying his liability to be assessed under the Act can appeal against the order of the IncomeTax Officer) covered the imposition of interest under Section 18A. The court held that the liability referred to in Section 30(1) was the liability to pay 'tax' and not liability to pay a 'penalty'. The Court distinguished between a tax and a penalty in this context. It held that the main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act, 1962 in the case of late clearance of goods. The Act provided for a specified period for clearance of warehoused goods. The court held that interest for delayed clearance was payable on the amount of duty payable or due on the warehoused goods for the period from the expiry of period specified or granted till the date of clearance of the goods from the warehouse. If on account of the goods not being exigible to duty on the date of their clearance, there was no duty payable, there was no question of payment of any interest under Section 61(1), such interest being a mere 'accessory' of the principal and if the principal is not recoverable / payable, so is the interest on it. The following observations of the Supreme Court are in this particular context: 13. In fiscal Statutes, the import of the words tax', 'interest', penalty , etc. are well known They are different concepts. Tax is the amount payable as a result of the charging provision. It is a compulsory exaction of money by a public authority for public purposes, the payment of which is enforced by law. Penalty is ordinarily levied on an assessee for some contumacious conduct or for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xactions. Is it then to be supposed that the former exaction is a 'tax', whilst the latter is not, merely because the term used in the latter case is 'penalty' as opposed to 'tax' in the former. The subject matter of taxation is 'property' within the city limits. It is perfectly permissible for a municipal corporation to levy different rates of taxes on authorized property and unauthorized property. If the statute means to tax both properties, would the tax on unauthorised property be any less the 'tax' simply because the term used to describe it is 'penalty'. It is also important to remember that 'penalty' provided for in this case (under Section 267A) is not for breach of the statute or for some contumacious conduct concerning taxation under the statute, but for an altogether different taxing subject, namely, unauthorized structures within the city limits. Secondly, it is important to note that determination and collection of such penalty is to be as if the amount thereof were a property tax by virtue of subsection (2) Section 267A of the Act. If for determination and collection, a penalty is to be treated as 'tax' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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