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TMI Blog2023 (2) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... /ITES only on the basis that it falls under a separate distinct category of SEZ and as such ought to be levied property tax at industrial rates. It is not even the case projected in the pleadings that no area of the building/premises of the petitioner even though recognised as SEZ is not being used for IT/ITES purposes. Mere non-mention of IT in the SEZ category cannot be taken as a tenable ground for non-levy of property tax at commercial rates - there are no infirmity in the impugned order dated 30.11.2021 at Annexure P-1 whereby property tax stands levied as per actual usage of the petitioner SEZ and which would strictly be in terms of the charging provision i.e. Section 87 of the 1994 Act as also the notifications dated 11.10.2013 (Annexure P-5) and 03.03.2014 (Annexure P-6) respectively. In the present case, the charging provision is under Section 87 of the 1994 Act which rather permits levy of property tax based on various factors including actual usage of the premises. It is towards exercise of powers under the provisions of the 1994 Act that the notifications dated 11.10.2013 and 03.03.2014 Annexures P-5 and P-6 have been issued. The levy of property tax has to be necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Advocate with Mr. Piyush Bansal, Advocate and Ms. Nikita Goel, Advocate for respondent No.2- M.C. Gurugram. ***** TEJINDER SINGH DHINDSA J. Challenge in the instant writ petition is to the order dated 30.11.2021 (Annexure P-1) passed by the Principal Secretary to Government of Haryana, Urban Local Bodies Department holding the ITITES, Sector Specific SEZ property of the petitioner exigible to property tax at commercial rates . A writ of mandamus is sought directing the respondents to levy property tax at industrial rates instead of Commercial Rates . BRIEF FACTUAL MATRIX Petitioner is stated to be a company incorporated under the Companies Act 1956. It has been averred that the petitioner's property was notified as IT-ITES SEZ by the Ministry of Commerce Industry, Department of Commerce, Government of India as well as by the Industries and Commerce Department, Government of Haryana. Pursuant to such approval, the petitioner's properties were leased out to various lessees for setting up of SEZ units. The Haryana Government, Urban Local Bodies Department issued a notification dated 11.10.2013 in terms of Section 87 (3) read with Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sage. CWP No.20789 of 2015 filed by the petitioner was withdrawn on 29.09.2015 with liberty to file an appeal against the assessment of property tax. Accordingly, petitioner filed an appeal dated 21.05.2016 against the demand notices dated 11.09.2015 before the Divisional Commissioner under Section 138 of the 1994 Act. On 15.11.2018 the Divisional Commissioner allowed the appeal preferred by the petitioner. The demand notices dated 11.09.2015 whereby property tax had been imposed at rates prescribed for IT Park, Cyber City/Park were quashed. Directions were issued to re-assess the property at industrial rates in respect of IT/ITES and its allied infrastructure buildings in the SEZ. However, the area under the SEZ where the petitioner was carrying out any commercial activity such as restaurant, hotel etc. and which is not related to information technology industry the same were held to be liable to be taxed as per commercial rates and likewise a view was taken that if the petitioner is carrying out any residential activity in the SEZ, the rates applicable for residential purpose ought to be levied and the factum of vacant land, under construction areas and basement for pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 falling under Chapter V. Submission advanced is that apart from stating in the preamble that SEZs are an industry, various incentives are contemplated under Chapter 5 Section 11 of the Haryana SEZ Act 2005. That apart the SEZ Rules 2006 have also been adverted to. It is urged that various restrictions stand imposed on a SEZ developer insofar as use of SEZ land is concerned and primarily restriction on transfer of the same. However, in the State of Haryana, there is no bar on the sale/purchase of property in Cyber City/Cyber/ I.T. Park. The Industrial and Investment Policy 2011 of the State of Haryana has also been referred to submit that such policy recognizes six distinct categories on IT/ITES in terms of facilities and restrictions available to them and the IT/ITES Sector Specific SEZ has been treated as a completely district and separate category thereunder. The six categories under the 2011 policy are:- (i) IT/ITES and other Technology Unit; (ii) IT/ITES/Cyber/Technology Park; (iii) Technology City/Cyber City; (iv) IT/ITES Sector Specific SEZ; (v) Cyber/IT Parks/ other (set up within the HSIIDC/HUDA Developed Industrial Estates); (vi) Tech ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of property taxes and a similar treatment ought to be meted out to the petitioner as well. (d) The issue of delay at the hands of Municipal Corporation, Gurugram/respondent No.2 in filing the revision petition against the order dated 15.11.2018 passed by the Divisional Commissioner has been vehemently raised. It has been submitted that under Section 140 of the 1994 Act, a 30 days limitation period for filing of a revision application against the order passed by the Divisional Commissioner under Section 138 has been provided. In the facts of the present case the revision application was stated to have been filed with a delay of 53 days. It is submitted that 1994 Act does not contemplate the applicability of any provision of the Limitation Act 1963 so as to empower the Revisional Authority to condone any delay whatsoever in filing of the revision application. It is urged that respondent No.1 was to be seen as a statutory authority while dealing with the revision application and such authority could not have condoned the delay in filing of the revision application since the Scheme of 1994 Act did not empower him to do so. In support of such contention judgement of the Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even though during the same period of time correspondence was being exchanged between the parties in relation to computation of the property tax. It is argued that the demand notices have been issued without any application of mind and there has been a flagrant breach of natural justice. Stand of Respondents Mr. B.R. Mahajan, learned Senior Advocate for respondent No.2/Municipal Corporation, Gurugram and Ms. Shruti Jain Goel, learned DAG, for respondent-State have vociferously defended the impugned order and have submitted that the same has been passed strictly in accordance with law and in terms of the notification dated 11.10.2013 and as amended vide notification dated 03.03.2014. It has been submitted that the rate of property tax is to be notified keeping in view various factors like location of property/building, the purpose for which said property is being used, its capacity for profitable use and other relevant factors. The purpose for which land/building is put to use is one of the important factors for levying of property tax by the concerned authority. Even if the building is set up for a specific purpose but such building is being used for a different purpose, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the present case the revision had been filed after a delay of 53 days only and such short period was attributable to administrative exigencies. The larger issue was with regard to the rate at which property tax was to be levied and such issue could not have been sacrificed on the alter of delay in itself. No prejudice as such is stated to have been caused to the petitioner in such regard as due opportunity of hearing had been granted by the revisional authority prior to passing of the impugned order. In the light of the afore-noticed submissions advanced, counsel for the respondents seek dismissal of the writ petition. Findings Section 87 contained in Chapter VIII of the Haryana Municipal Corporation Act 1994 reads as under:- 87. Taxes etc. to be imposed by Corporation under this Act and arrangement of certain taxes collected by Government-- (1) The Corporation shall, for the purposes of this Act, levy the following taxes- 1 [(a) a property tax payable by the owner or occupier of building and land at the rates notified by the Government, from time to time depending upon the area in which the building or land is situated, its location, purpose for whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on within the Municipal area; [ (ee) a tax on driving licenses issued under the Motor Vehicles Act, 1988 (Act of 1988), within the Corporation area; .] (f) any other tax that may be imposed under the provisions of the Haryana Municipal Act, 1973: Provided that no tax shall be imposed under this sub-section unless an opportunity has been given in the prescribed manner to the residents of the Municipal area to file objections and the objections, if any, thus received have been considered. (3) The taxes as specified in sub-section (1) and sub-section (2) shall be levied at such rates as may, from time to time, be specified by the Government by notification and shall be assessed and collected in accordance with the provisions of this Act and the bye-laws made there under. (4) The Government may, by special or general order, direct the Corporation to impose any tax falling under sub-section (1) or sub-section (2) not already imposed, within such period as may be specified and the Corporation shall thereupon act accordingly. (5) If the Corporation fails to carry out any order passed under sub-section (4), the Government may, by a suitable order notifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 015) while upholding the validity of Section 87 (1) (a) had held as follows:- The factors mentioned in Section 87 (1) (a) i.e. the area in which the building or land is situated, its location, purpose for which its used, its capacity for profitable use, quality of construction and other relevant factors, are the relevant guidelines incorporated in the statute itself to determine the rate of tax. Since the levy of property tax falls within the exclusive domain of the State legislature, it is the legislature which is competent to determine the basis of levy of the property tax. Thus, we do not find any illegality when Section 87 (1) (a) of the Act was incorporated empowering the State Government to notify the rates of property tax by taking into consideration the factors as mentioned therein. Clause 2 (G) of the notification dated 11.10.2013 (Anenxure P-5) stipulates that in case of the mixed used of premises in any property, the liability of tax shall be calculated as per area under different usage. In other words if a single building is being used for different and mixed purposes, then the property tax will be levied taking into consideration the usage of the specific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty tax at industrial rates is wholly misplaced. Relevant extract of Section 11 and Section 19 of the 2005 Act would be material to the issue at hand and are reproduced hereunder:- 11. (1) The following shall be exempt from payment of any tax, duty, fees, cess of any other levies under any existing State law, namely:- (i) Any goods exported out of or imported into the Special Economic Zone. (ii) Inter unit transaction of goods within the Special Economic Zone; (iii) Goods from the Special Economic Zone sent for value additional to the domestic tariff area and returned to the Special Economic Zone thereafter, and (iv) Services that provide value addition to a product within the Special Economic Zone. (2) All transactions and transfers of immovable property or documents related thereto within the Special Economic Zone shall be exempted from stamp duty. 19. Nothing in this Act shall affect:- (i) any right, privilege, obligation or liability acquired, accrued or incurred under any other law; (ii) any penalty, forfeiture, or punishment incurred under any other law; (iii) any investigation, legal proceeding or remedy in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the writ petition to the various notifications issued across the country in the nature of notification dated 14.03.2005 by the IT Department of the Chandigarh Administration, notification dated 11.08.2005 issued by Department of Industries and Commerce of the State of Punjab, State of U.P. SEZ Policy 2007, SEZ Policy of the State of Madya Pradesh as also the Gujarat SEZ Act 2004 would have no bearing insofar as the present case is concerned. In each of these notifications as also SEZ policies there was a categoric and specific exemption envisaged insofar as property tax is concerned apart from other exemptions. In the present case, the charging provision is under Section 87 of the 1994 Act which rather permits levy of property tax based on various factors including actual usage of the premises. It is towards exercise of powers under the provisions of the 1994 Act that the notifications dated 11.10.2013 and 03.03.2014 Annexures P-5 and P-6 have been issued. The levy of property tax has to be necessarily as per the charging provision contained under the 1994 Act as also the notifications issued therein. The petitioner as such cannot be permitted to gain any mileage from the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le holding that the suits, appeals and applications referred to in the Limitation Act are not the suits, appeals and applications which are to be filed before a statutory authority like the Commissioner under the 1959 Act, it was observed that a special or local law vide statutory scheme can make applicable any provision of the Limitation Act or exclude applicability of any provision of the Limitation Act which can be decided only after looking into the scheme of the particular special or local law. Adverting to the facts of the present case under the 1994 Act, Chapter VIII deals with Taxes and Fees. Section 140 of the 1994 Act reads as follows:- 140. Finality of appellate orders:- Any person aggrieved by an order passed in appeal under Section 138 may, within thirty days of the communication to him of such order, make an application in writing to the Government for revision against the said order and the Government may confirm, alter or rescind the said order:- Provided that the Government shall not pass an order under this section prejudicial to any person without giving such person a reasonable opportunity of being heard. Section 140 of the afore-reproduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersonal machinery and the inherited bureaucratic methodology imbued with the note-making, file-pushing, and passing-on-the-buck ethos, delay on the part of the State is less difficult to understand though more difficult to approve, but the State represents collective cause of the community. It is axiomatic that decisions are taken by officers/agencies proverbially at slow pace and encumbered process of pushing the files from table to table and keeping it on table for considerable time causing delay intentional or otherwise - is a routine. Considerable delay of procedural red tape in the process of their making decision is a common feature. Therefore, certain amount of latitude is not impermissible. If the appeals brought by the State are lost for such default no person is individually affected but what in the ultimate analysis suffers, is public interest. It was further held that the State cannot be put on the same footing as an individual insofar as dealing with condonation of delay. The individual would always be quick in taking the decision whether he would pursue the remedy by way of an appeal or application since he is a person legally injured while State is an impersona ..... X X X X Extracts X X X X X X X X Extracts X X X X
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