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TMI Blog2011 (1) TMI 1534X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay Village Panchayats Act, 1958 which application/revision came to be dismissed. The said application/revision was filed against the decision of Respondent No. 8Standing Committee, Zilla Parishad, Aurangabad dated 17.8.2009 dismissing the 2nd Appeal of petitioner, thereby affirming the order dated 15.1.2009 passed by the Respondent No. 7 Block Development Officer, Panchayat Samiti, dismissing the 1st Appeal of the petitioner. 3. The controversy involved in the petition is in respect of payment of property taxes by the petitioner (hereinafter referred to as 'Skoda') pertaining to Assessment Years 200607 to 200809 pursuant to the demand bills/notices issued by the Respondent No. 4 Gram Panchayat. 4. Respondent No. 1 is the State of Maharashtra through it's Chief Secretary. Respondent No.2 is the Principal Secretary, Rural Development Department. Respondent No. 3 is the Principal Secretary, Industrial Development. Respondent No. 4 is the Gram Panchayat, Kumbephal Taluka, District Aurangabad. Respondent No. 5 is the GramSevak of Respondent No.4. Respondent No. 6 is the Maharashtra Industrial Development Corporation (hereinafter referred to as MIDC ). Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2006 addressed to the Gram Panchayat made a request to grant maximum rebate and also requested the Gram Panchayat to enter into an Agreement for lumpsum contribution in lieu of taxes levied by the Gram Panchayat as per the provisions of section 125 of the BVP Act. Accordingly on 7.12.2006, an Agreement for lumpsum contribution in lieu of taxes, came to be executed between Skoda and Gram Panchayat, whereunder taxes for Assessment Years 200304 to 200506 were reduced from ` 45,89,434.93 to ` 23,00,000/. The said Agreement was approved by the Standing Committee, ZP as well as by the Divisional Commissioner, Aurangabad. 8. Despite the Agreement dated 7.12.2006 entered into between Skoda and Gram Panchayat, taxes for the Assessment Years 200304 to 200506 of the agreed amount of ` 23,00,000/remained to be paid by the Skoda and notices of demand dated 14.6.2007, 6.7.2007 and 29.8.2007 came to be issued by the Gram Panchayat to Skoda. An attachment notice dated 20.12.2007 also came to be issued on failure on the part of Skoda to make payment. By its letter dated 4.1.2008 Skoda thereafter terminated the Agreement dated 7.12.2006 under which it had agreed to pay lumpsum contribution of ` ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued final bill dated 25092008 as per Section 129(2) of the BVP Act. Pursuant thereto, Skoda, this time round, filed an Appeal on 24102008 under section 124 (5) of the BVP Act before the BDO, Panchayat Samiti Respondent No. 7, questioning the demand. A Misc. Application was also filed by Skoda in the First Appeal for adding Chief Secretary, Government of Maharashtra and Principal Secretary, Industrial Development Department, Government of Maharashtra, as a party Respondents in the said Appeal, which Misc. Application came to be rejected on 28.11.2008. The order dated 28.11.2008 in the Misc. Application was challenged by Skoda before the CEO, Standing Committee, ZP, Aurangabad. In the meantime, however, the BDO, Panchayat Samiti, heard the Appeal finally and dismissed the same by his order dated 15.01.2009. 13. Skoda, thereafter, preferred 2nd Appeal under Section 124(5) of BVP Act on 13022009 before the CEO, Standing Committee, ZP, Aurangabad, calling in question the final order dated 15012009 of BDO, Panchayat Samiti. The hearing of the 2nd Appeal came to be fixed before the Dy. CEO, Standing Committee, when Skoda pointed out that the Appeal under the provisions of Section 124 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pendency of revision/application, which came to be allowed by the Minister. The application/revision came to be ultimately rejected by the Minister by his order dated 16.4.2010. It is this order dated 16.4.2010, rejecting the application/revision of Skoda, which is the subject matter of above petition. 15. I have heard Shri R.N. Dhorde for the petitioner, learned A.G.P. Shri K.B. Choudhari for Respondent Nos. 1 to 3 and 11, Shri V.D. Sapkal for Respondent Nos. 4 and 5, Shri S.S. Dande for Respondent No. 6 and Shri U.B. Bondar for Respondent Nos. 7 to 10. 16. Shri Dhorde, on behalf of Skoda, has raised the following contentions : I That considering the clauses in the MOU dated 13012000 between the State of Maharashtra and Skoda and the Lease Deed dated 3112004 between MIDC and Skoda, the doctrine of promissory estoppel would be applicable against the State Government and the Gram Panchayat is estopped from charging any amount over and above the amount of ` 3 lacs towards taxes as specified in the Lease Deed. II That the Gram Panchayat does not have authority to levy taxes when the property is vested in the State Government/MIDC and that in any event it is not permissib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to bear and pay under these presents although by law recoverable from the Lessor has been estimated at ₹ 3,00,000/( Rupees three lakhs) approximately per annum. 19. Relying upon the aforesaid clauses and recital, learned counsel for Skoda submitted that it was based on the promise of the Government of Maharashtra that Skoda, who is a leading manufacturer of automobiles, decided to establish its manufacturing unit at MIDC, Industrial Area, Shendra Taluka, District Aurangabad and that it was only in pursuance of that promise that the manufacturing unit ultimately came to be established by Skoda. He submitted that as set out in clause 3 of the MOU, the Lease Deed between MIDC and Skoda executed on 3112004 also forms a part of the MOU entered into between Government of Maharashtra and Skoda. He submitted that considering the clauses and recital reproduced above, the Gram Panchayat would now be estopped from levying any amount in the form of taxes over and above the sum of ` 3 lacs per annum in respect of the unit of Skoda. Learned Counsel submitted that when the Government of Maharashtra had by its conduct made a promise, that promise would be binding upon it and that the Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter itself entered into an Agreement dated 7th December, 2006 with the Gram Panchayat, wherein Skoda, as per the provisions of Section 125 of BVP Act, agreed to pay a lump sum contribution of ` 23 lacs in lieu of taxes of ` 45,89,434.93 for the period from April 2003 to March 2006 towards Gram Panchayat taxes for open land, constructed and other developed area by Skoda. Learned Counsel adverted to the letter dated 16th April, 2006 written by Skoda to Gram Panchayat wherein Skoda has requested to grant maximum rebate and also requested Gram Panchayat to enter into an Agreement with it for lumpsum contribution in lieu of taxes as per Section 125 of the BVP Act. Learned Counsel questioned the conduct and bonafides of Skoda and submitted that though the amount of taxes was to the extent of ` 45,89,434.93p for the period from April 2003 to March 2006 and the Gram Panchayat had at the request of Skoda entered into an Agreement dated 7th December, 2006, whereunder the amount was reduced to ` 23 lacs, Skoda, however, did not pay any amount to the Gram Panchayat and terminated the said Agreement and denied its liability and proceeded to file a suit in the Court of Jt. Civil Judge, Sr. Divi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant provisions of the Sales tax laws and procedures) (ii) Central sales tax payable on sale of its finished products in the course of interState trade (as in GR dated 7th May, 1993) (iii) Sales tax incentives by way of deferral in respect of the sales tax liability (as in GR dated 7th May, 1993) (iv) Refund of Octroi Entry tax payable (in lieu of octroi) if applicable as in GR dated 7th May, 1993. (v) Exemption of Electricity duty in case the PROJECT qualifies for classification as a Mega Project (as in GR dated 28th November 1997) (vi) Exemption of Stamp duties on documentation for mortgage of assets to financial institutions for raising loans and for acquisition of land (as in GR dated 27th November, 1997) in case the PROJECT qualifies as a Mega Project, and in case it does not so qualify, then stamp duty exemption as specified in GOM Revenue and Forests Department Order No. Mudrank 1097/CR15/ M1 dated 31st March, 1997 (valid at present upto 31st March, 2000). Thus, on a perusal of the above clauses it would be seen that even in the MOU dated 13012000 there is no express exemption in respect of property taxes provided to Skoda. 22. Insofar the Lease Deed da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6th April, 2006 to the Gram Panchayat requesting the Gram Panchayat to grant maximum rebate in taxes and to enter into an Agreement as per the provisions of Section 125 of BVP Act for payment of lumpsum contribution in lieu of taxes which was accordingly reduced by 50% i.e. from about ` 46 lacs to ` 23 lacs. 24. Indeed, clause 3 the MOU between Government of Maharashtra and Skoda specifically states that the Agreement entered into by Skoda with the MIDC and other agencies shall be part of the MOU. However on a closer reading of the said clause it is evident that the same relates only to Agreements in connection with infrastructural facilities in terms of land, electricity, water, roads, pollution control, etc. which MIDC was required to coordinate and to make such requirements available to the project on mutually agreed time schedules. Insofar as the estimate by MIDC of taxes at ` 3 lacs payable to the Gram Panchayat as appearing in the Lease Deed is concerned, such estimate, in my view, can in no manner be treated as any commitment or promise held out by the Government of Maharashtra through MIDC. In any event, in view of the subsequent act of Skoda in having entered into an ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009 is to the tune of almost ` 90 lacs and Skoda has chosen not to enter into any further Agreement in respect of lumpsum contribution in lieu of taxes. He submitted that Skoda has not paid single farthing for the aforesaid period and even for the period from April 2003 to March 2006, inspite of the Agreement between the parties, Skoda had wrongly denied its liability to pay taxes and proceeded to file a suit against the Gram Panchayat questioning the levy of taxes. The learned Counsel relied upon the judgment of the Division Bench of this Court in the case of Bima Office Premises Cooperative Society and etc. Vs. Kalamboli Village Panchayat and others, AIR 2001 Bombay 83, in support of his submission that so long as Gram Panchayat continues to be in existence it has a right to levy the taxes on land and buildings situated within its jurisdiction. The learned Counsel also placed reliance upon an interlocutory order dated 29082007 in Writ Petition No. 5864 of 2006 (alongwith companion matters) of the Division Bench of this Court in the case of Bajaj Auto Limited Vs. Gram Panchayat Jogeshwari others, wherein in identical facts, the Division Bench of this Court, whilst alluding to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of repetition, they are reproduced hereunder: 2. The Lessee with intent to bind all persons into whosoever hands the Leased Premises may come doth hereby covenant with the lessor as follows : (a)........... (b)To pay all existing and future taxes, rates, assessments and outgoings of every description for the time being payable either by landlord or tenant or by the occupier in respect of the leased Premises and anything for the time being thereon. (c)Throughout the said term hereby created to pay to the Lessor from time to time such recurring fees in the nature of service charges/drainage cess as may from time to time prescribed by Government of Maharashtra under Maharashtra Industrial Development Act, 1961 or Rules framed there under in respect of the amenities or common facilities provided by the Lessor. From the aforesaid covenants, it is evident that even in the Lease Deed dated 3rd November, 2004 entered into between MIDC and Skoda, Skoda had agreed to pay all existing and future taxes, charges and outgoing of every description for the time being over and above service charges payable to MIDC. 31. Admittedly thereafter Skoda itself had entered into an Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal towards all the taxes/fees/charges of Gram Panchayat for the period beginning from April 2003 to March 2006 and that no additional amount will be levied/collected in this respect. 3. That SAIPL shall not be liable for any other additional amount other than as per article 1 and 2 above. However, if any further construction of expansion work is carried out by Saipl then the applicable taxes/charges/rates etc.. will be as prevailing at that time and or settled by virtue of a mutual Agreement. 4. That the parties have agreed on the following charges on lump sum basis : 5. Total tax calculated and the agreed lump sum payable on constructed area, open area and underdeveloped area from the year 2003 to year 2006 is as per Annexure 1 enclosed herewith. 6. In the event of any new or pending application/petition/appeal etc. with respect to the Grampanchyat tax/fee/charge etc. before the concerned authorities (including but not limited to the Hon ble High Court) is decided, then the parties hereto agree that they shall adhere to all such decisions. Thus in the recitals of the aforesaid Agreement dated 7-12-2006 reproduced above, Skoda itself in no uncertain terms has ack ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, trades, callings or employments, that is to say . (a)shopkeeping and hotelkeeping (b)any trade or calling (other than agriculture) which is carried on with the help of machinery run by steam, oil or electric power or by manual labour; (c)the profession or calling of brokers in cattle markets; (vii)a general sanitary cess for the construction or maintenance, or both the construction and maintenance of public latrines and for the removal and disposal of refuse; (viii) a general water rate which may be imposed in the form of a rate assessed on buildings and lands or in any other form as may be best adopted to the circumstances of any class of cases; viii-a) a lighting tax; (ix) any other tax (not being a tax or toll on motor vehicles save as provided in Section 20 of the Bombay Motor Vehicles Tax Act, 1958) (Bom. LXV of 1958) which the State Legislature has, under the Constitution, power to impose in the State and which has been sanctioned by the State Government; (x) a fee on markets and weekly bazars; (xi) a fee on carstands and tonga stands; (xii) a special water rate for water supplied by the Panchayat through pipes, which may be imposed in any form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f roads, drainage, watersupply, street lighting etc, section 124(1) of the BVP Act provides for levies of taxes and fees as reflected in the clauses (i) to (xviii) reproduced hereinabove and both the Authorities viz. MIDC as well as Gram Panchayat are authorized in law for imposing their respective levies as specified hereinabove. In the instant case, the levy by the Gram Panchayat is in respect of tax on buildings is relatable to clause (i) of subsection (1) of section 124 of the BVP Act. It is therefore apparent that both the levies by the authorities i.e by the MIDC and the Gram Panchayat are distinct and exclusive. One is a fee and the other is a tax . No question of double taxation arises as sought to be suggested. It is a settled law that fee is a payment levied by an authority in respect of services performed by it for the benefit of the payer while a tax is payable for the common benefits conferred by the authority on all tax payers. [See Srikrishna Das vs. Town Area Committee, Chirgaon, (1990) 3 SCC 645, Amir Marut vs. State of Maharashtra, 2010(4) All MR 596]. It follows therefore that in respect of property tax levied by the Gram Panchayat there is no question of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of Village Panchayats:--The State shall take steps to organize village panchayats and endow them with such powers and authority as may be necessary to enable them to function as units of self-Government. Accordingly, Article 40 of the Constitution requires every State to organize village Panchayats and endow them with such powers and authority as may be necessary to enable them to function as unit of self- Government. In pursuance of the said Directives, the Bombay Village Panchayats Act, 1958 was enacted. The Parliament found that these institutions have not been able to acquire the status and dignity of viable and responsive people's bodies due to number of reasons including lack of financial resources. In view of such shortcomings. Parliament considered it necessary to enshrine in the Constitution certain basic and essential features of Panchayat Raj institutions to provide certainly, continuity and strength to the system of local self-Government. Accordingly, the Parliament has enacted the Constitution (Seventy-Third Amendment) Act, 1992, which came into force with effect from 24th April, 1993, the relevant provisions of which, read as under :-- 243. Definitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclaration of village- (1) Every village specified in the notification issued under Clause (g) of Article 243 of the Constitution of India shall be known by the name of that village specified in that notification. Provided that, where a group of revenue villages or hamlets or other such administrative unit or part thereof is specified in that notification to be a village, the village shall be known by the name of the revenue village, hamlets or, as the case may be, administrative unit or part thereof, having the largest population. Section 51 enables State Government to vest tn the Panchayat, open sites, waste, vacant or grazing lands or public roads and streets, bridges, ditches, dikes and fences, wells, river beds, tanks, streams, lakes, nallas canals water courses, trees or any other property in the village vesting in the Government. Section 51 has been amended to provide that the lands vested in the Panchayats by Government should be available to the Government when they are required for the purpose of National or State Development Plans or for any other public-purpose, without payment of compensation. Section 52 makes a provision and gives powers to the Gram Panchaya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reconstitution of panchayat on alteration of limits of village, whereas Section 148 deals with the effect in the event of exclusion of area from the village itself. Section 148 reads as under : 148. Effect of area being excluded from village.-- Where under Section 4 any local area forming part of a village is excluded from such village, and such area is not included in or declared to be a village, so much of the village fund and other property vesting in the Panchayat of the village of which such area formed part, as the Commissioner may by order in writing direct, shall vest in the Collector to be utilized for the benefit of the area as the Collector may think fit. ------- 31. The Constitution mandates that no tax shall be levied or collected except by authority of law. It is well established that tax is in the nature of compulsory extraction of money by a public authority for the public purpose to meet general expenses of the State or authority without reference to any special advantage to be conferred upon payers of the tax which is clear from the law laid down by the Apex Court in the case of Ratilal Gandhi v. State of Bombay reported in AIR 1954 SC 388 in the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of India is known by the name of that village specified in that notification and where the circumstances so require, provision is made to include or exclude any local area from the local area of a village or to alter the limits of a village or to take away that local area from the concerned village by the notification issued, in the like manner, after consultation with the Standing Committee and upon such declaration local area is either included or excluded shall form the village. With the publication of such notification, the local area is either included or excluded and the limits of the village, accordingly, stand altered. Upon exclusion of the local area of the village, it ceases to be a village under the BVP Act. In the light of the said provisions, we agree with the submissions advanced by Respondent No. 1 that so long as notification is not issued under Subsection (2) of Section 4, the Respondent No. 1 Gram Panchayat cannot be said to have ceased to exist. In absence of any such notification by the State, the Respondent No. 1- Gram Panchayat cannot be said to have ceased to be a Gram Panchayat within the provisions of the said Act. It is, therefore, clear that there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. He submitted that the hearing given in the present case was not as contemplated under section 124(5) of BVP Act and therefore the order passed by the Standing Committee, ZP, Aurangabad in the 2nd Appeal is bad in law. 43. Having heard the learned Counsel for the parties, I am unable to accede to the submissions made on behalf of Skoda on this contention also. 44. At the outset, it is required to be noted that no such ground was raised in the application/revision before the Minister. Therefore, it would now not be open for Skoda to raise this contention. On this ground alone I am not inclined to entertain this contention. 45. Apart from the above, it is interesting to note how Skoda itself has titled the 2nd Appeal. The title is extracted hereunder: BEFORE THE HON'BLE CHIEF EXECUTIVE OFFICER (STANDING COMMITTEE), ZILLA PARISHAD AT AURANGABAD APPEAL NO.......... OF 2009. DISTRICT AURGANGABAD 46. It is further interesting to note that in a Misc. Application filed in the said 2nd Appeal the grievance made by Skoda was that the said Appeal is required to be heard and decided only by the Standing Committee i.e. CEO of ZP and not by the Deputy CEO. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnative remedies, which may be available in law for challenging the order of the standing committee, if the same is adverse to the interest of the petitioner. We accordingly, dismiss this petition as withdrawn and direct that atinterim relief would continue for a period of 15 days from the date of communication of the decision to the petitioner. In the circumstances, there will be no order as to costs. (emphasis supplied) 50. On a perusal of the aforesaid order it is evident that when the matter came up before the Division Bench on 2782009, Skoda did not make any grievance before the Division Bench about the hearing which was already given to Skoda. On the contrary it withdrew the Writ Petition on the statement made on behalf of the Standing Committee that since the hearing was already given, necessary orders would be passed within 15 days. 51. Significantly, though it is argued that the 2nd Appeal ought to have been heard by all members of the Standing Committee, no provisions of law or rules of Conduct of Business have been pointed out to substantiate this contention. 52. For the aforementioned reasons, I find that the contention No.3 raised by Skoda is without s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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