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TMI Blog2023 (8) TMI 934X X X X Extracts X X X X X X X X Extracts X X X X ..... , the vires of sub-section 152D of the MMC Act not examined, as challenged by the petitioner - this is because what was questioned by the petitioner are primarily the assessment orders. It would quite justified in taking such view considering the clear averments as made in the memo of petition in paragraph 5(f) when the petitioner takes a position contrary to the well settled principles of law, i.e. when the petitioner contends that the provision of not allowing filing of a statutory appeal without deposit of the disputed tax is arbitrary, harsh and irrational (when the validity of the said provision of pre-deposit has already been upheld]. Also when the petitioner clearly avers in the petition that it is difficult for the petitioner to pay the entire amount of disputed tax to maintain the appeal, and for such reason this petition is filed. The Division Bench of this Court in case KHARGHAR CO-OP. HOUSING SOCIETIES FEDERATION LTD. AND ORS. VERSUS MUNICIPAL COMMISSIONER, PANVEL MUNICIPAL CORPORATION AND ORS. [ 2023 (4) TMI 1241 - BOMBAY HIGH COURT] when in the context of payment of municipal taxes the Division Bench referring to the provisions of Section 406 and considering th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssail the impugned assessment orders. Let such appeal be filed within four weeks from today - If such appeals are filed, the same be adjudicated by the appellate authority on its merits without an objection as to limitation as the petitioner was bonafide pursuing the present proceedings. All contentions of the parties on the merits of the proceedings if any instituted before the appellate authority are expressly kept open. Petition disposed off. - G. S. KULKARNI JITENDRA JAIN, JJ. For the Petitioner : Mr. R. V. Desai, Senior Advocate with Mr. Deepak Bapat and Mr. Sumedh Hinge. For the State : Ms. Shruti D. Vyas, B Panel Counsel. For the Respondent Nos. 2 and 3: Ms. Swati Sagavekar. ORAL JUDGMENT (PER G. S. KULKARNI, J.) 1. These are two petitions filed under Article 226 of the Constitution whereby two Assessment Orders both dated 13 March, 2023 for the year 201516 and 2016-17, passed by the Assessing Officer/Deputy Commissioner, Vasai-Virar Municipal Corporation, assessing the liability of the petitioner for levy of Local Body Tax (LBT) under the Maharashtra Municipal Corporation Act (for short the MMC Act ), has been assailed. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of commencement of the Maharashtra Municipal Corporations (Amendment) Act, 1975, the Judge shall not hear and decide such appeal, unless the amount of the disputed tax claimed from the appellant, or the amount of the tax chargeable on the basis of the disputed rateable value, as the case may be, upto the date of filing the appeal has been deposited by the appellant with the Commissioner, within thirty days from the date of publication of a general notice by the Commissioner in this behalf in the local newspapers. The Commissioner shall simultaneously serve on each such appellant a notice under sections 473 and 474 and other relevant provisions of this Act for intimating the amount to be deposited by the appellant with him. (4) As far as possible, within fifteen days from the expiry of the period of thirty days prescribed under sub-section (3), the Commissioner shall intimate to the Judge the names and other particulars of the appellants who have deposited with him the required amount within the prescribed period and the names and other particulars of the appellants who have not deposited with him such amount within such period. On receipt of such intimation, the Judge shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aintained a petition under Article 226 of the Constitution of India, to assail the assessment order. Ms. Sagvekar has also referred to an order passed by this Court in Pidilite Industries Ltd. Vs. The State of Maharashtra Ors Writ Petition No.1297 of 2023, dated 1 February 2023 and according to her, these were proceedings, which in the past were clubbed alongwith the present proceedings. She would accordingly submit that these petitions be not entertained and the petitioner be relegated to avail the remedy of a statutory appeal. 4. Ms. Vyas, learned Assistant Government Pleader for the State would also support the objection as raised on behalf of the Municipal Corporation. She would also submit that this Writ Petition ought not to be maintained in view of an alternate remedy being available to the petitioner of filing an appeal. 5. Mr. R. V. Desai, learned Senior Counsel for the petitioner, however, would oppose the preliminary objection, as urged on behalf of the Municipal Corporation and the State Government. 6. Mr. Desai has made submissions on the applicability of the provisions of Section 152D to contend that it is ill-conceivable that there is liability t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h sub-rule (3) of Rule 33 of the Bombay Provincial Municipal Corporation (Local Body Tax) Rules, 2010 (for short the LBT Rules ) without authority of law comprising of tax, interest and penalty. It is the petitioner s case that Section 152D of the MMC Act is ultra virus and violative of Article 19(1)(g) of the Constitution of India as the same is contrary to Section 127(2)(aaa) of the MMC Act, as the Assessing Officer has invoked Section 152D of the MMC Act and levied tax on the purchase value of the goods, without establishing on the documentary evidence that the suppliers are not registered under the Act and the goods sold by them to the petitioner have been imported by the supplier into the limits of the City from any place outside of the City area. It is contended that the levy of LBT under Section 152D and Rule 28(3) of the LBT Rules are contrary to charging Section 127(2)(aaa) of the MMC Act, which provides that a registered dealer is liable to pay LBT on the entry of the goods into the limits of the City for consumption, use or sale therein. It is contended that as such the basis for the levy of LBT is that a registered dealer has imported goods into the limits of the city ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which reads thus:- Form J [See Rule 33 (11)] Notice of Demand VVMC/LBT/1909/2022-2023 DATE:- 13/03/2023 To, Mr. Shriram Danekar M/s. KOKUYO CAMLIN LIMITED Building No.06, A to C, Rajprabha udyog nagar, Golani naka, Waliv, Vasai east, Taluka Vasai, Dist. - Palghar 401 208. R.C. No. 28/141/2011/I-GN i. Take notice that the local body tax payable by you for the period from 01/04/2016 to 31/03/2017 has been determined by me under Order No. dated 13/03/2023 at Rs. 67,12,635/-. A penalty of Rs. 1,34,25,270/and interest of Rs. 69,98,600/- has also been imposed under rule 48. ii. The total amount of Rs. 2,71,36,506/- should be paid to corporation at on or before 28/03/2023. iii. If you do not pay the amount on date specified above, the amount will be recoverable as an arrears of property tax under rule 40 of local body tax Rules. iv. If the amount is not paid without reasonable cause by the specified date, you will also liable for penalty under rule 49 of the local Body Tax Rules. v. Any appeal against the order must be presented to the authority prescribed within the time and the manner la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided that, a dealer to whom sub-clause (a) does not apply but sub-clause (b) applies and whose turnover either of all sales or of all purchases or of all imports first exceeds the relevant limit prescribed in this behalf after the first day of April of the year in which the corporation has decided to levy the cess, shall not be liable to pay the cess in respect of the goods imported by him into the limits of the city for consumption, use or sale therein upto the time when his turnover of sales or of purchases or of imports as computed from the first day of April of the said year, does not exceed the relevant limit prescribed in this behalf. (2) Every dealer whose turnover either of all sales or of all purchases or of all imports made during any year commencing on the first day of April, being a year subsequent to the years mentioned in sub-section (1) first exceeds the relevant limit prescribed in this behalf, shall be liable to pay cess under this Act: Provided that, a dealer shall not be liable to pay the cess in respect of the goods imported by him into the limits of the city for consumption, use or sale therein during the period commencing on the first day of April o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or sum forfeited under the provisions of this Chapter, or (i) aids or abets any person in commission of any act specified in clauses (a) to (h), or (j) fails without sufficient cause to furnish any information as required by the rules, or (k) fails without sufficient cause to furnish any return as required by the rules by the date and in the manner prescribed, or (l) fails to pay any cess as required by this Chapter, or (m) fails without sufficient cause to comply with any requirements made of him under section 152J, or (n) obstructs any officer making any search or seizure under section 152J, or (o) without sufficient and reasonable cause contravenes provisions of sections 152F, 152G or 152I, shall, on conviction, be punished with imprisonment for a term which may extend to two years and with fine. (2) Whoever commits any of the acts specified in sub-section (1) and the offence is a continuing one under any of the provisions of the sub-section (1) shall, on conviction, be punished with daily fine which shall not be less than rupees one hundred during the period of the continuance of the offence, in addition to the punishment provided under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d dealer fails to comply with the terms of any notice issued under sub-rule (3) or (4) of this rule, the Commissioner may assess him to the best of his judgment, the amount of local body tax due from him. (6) Notwithstanding the foregoing provisions of this rule, where the Commissioner is not satisfied about the correctness or the completeness of the accounts of a dealer, or where no method of accounting has regularly been employed by a dealer, the Commissioner may, after giving such dealer a reasonable opportunity of being heard, assess, to the best o his judgment the amount of local body tax, if any, due from him. (7) For the purpose of sub-rule (3), (4), (5) and (6) of this rule, the Commissioner may proceed to assess the dealer within five years from the end of the year to which such assessment related, by serving on the dealer, a notice in Form H and fix a date which shall not be earlier than fifteen days from the due date of Service thereof. (8) Any assessment made under this rule, shall be without prejudice to any penalty or interest or prosecution for an offence under the Act. (9) The order of assessment shall be in Form-I (10) An order imposing a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of assessment passed under the provisions of the Act and the rules in his case, then such dealer or person shall be liable to pay by way of simple interest, a sum equal to two percent of such local body tax for each month from the first date after the end of the period for which the dealer or the person has been so assessed till the date of such order of assessment. If as result of any order passed under the provisions of the Act or the rules, the amount local body tax found due is enhanced or reduced, as the case may be, the interest shall be enhanced or reduced accordingly. Provided that the total amount of interest so payable under this sub-rule shall not exceed the total amount of local body tax on which interest under this sub-rule is so charged. Explanation :- For the purpose of this sub-rule, a part of a month shall be counted as one month. (4) .. (5) .. (6) .. (7) .. (8) .. (9) .. 15. Having heard learned counsel for the parties and having noted the legislative scheme of the MMC Act in relation to the levy and collection of Local Body Tax ( LBT ), we may observe that the municipal taxation in regard to the levy and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Supreme Court in Shivram Poddar Vs. Income Tax Officer, Central Circle II, Calcutta and Anr. AIR 1964 SC 1095; Income-Tax Officer Lucknow Vs. M/s S.B. Singar Singh Sons Anr. (1976)4 SCC 325; Assistant Collector of Central Excise, Chandan Nagar, West Bengal Vs. Dunlop India Ltd. Ors. (1985)1 SCC 260; M/s. Godrej Sara Lee Ltd. Vs. The Excise and Taxation Officer-cum-Assessing Authority Ors . 2023 SCC OnLine SC 95. has held that the petition under Article 226 of the Constitution assailing the assessment and demand order ought not to be entertained and the proper remedy would be to challenge the assessment order by taking recourse to the statutory remedy of an appeal. Such decision is squarely applicable in the facts of the present case, as contention of the petitioner is similar to one considered by the Division Bench in Kharghar Co-op. Housing Societies case (supra). The relevant observations of the Division Bench are required to be noted which read thus:- 36. Be that as it may, we would also consider as to whether the grounds on which the present petition has been filed, in any manner are precluded to be raised, in such statutory appeal. As noted above, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged by the petitioners, that an enbloc writ petition assailing the property tax bills be entertained. The legislative wisdom behind Section 406 providing for a statutory appeal cannot be defeated, merely because petitioner no. 1 is a Federation, with several member societies, and merely because it is claimed that they have a common cause. It would be wrong reading of law that merely by forming a federation, a different color could be given to an individual cause so as to contend that the writ petition be entertained. In our opinion, for such reasons the petitioners are under an erroneous impression that merely because they have many members who purportedly share a common cause, namely, to assail the bills issued to them, the petitioners would have a foothold to maintain the present petition and that looking at the numbers albeit miniscule number of assessees, the High Court would be under some obligation, to entertain such a petition. Certainly, the law would not accept such a drastic proposition. .. 49. The procedure for levy and collection of municipal taxes falls under Chapter XI of the MMC Act titled as Municipal Taxation . Section 127 which falls under the said C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference in these petitions so as to pursuade the Court to make an exception to entertain the petitions, notwithstanding the statutory remedy of an appeal available to the petitioner as provided under the provisions of Section 406 of the MMC Act. 20. We may also observe that merely for the reasons that the vires of a statutory provision namely Section 152D of the MMC Act being assailed by the petitioner, would not mean that de hors a strong foundation and a cause of action for assailing such provision being made out, the Court nonetheless would be under an obligation to examine the vires of the said provision and entertain the petitions. 21. For the aforesaid reasons, we dispose of these petitions by the following order:- ORDER i. The petitioner is permitted to avail the remedy of an appeal under Section 406 of the MMC Act to assail the impugned assessment orders. Let such appeal be filed within four weeks from today. ii. If such appeals are filed, the same be adjudicated by the appellate authority on its merits without an objection as to limitation as the petitioner was bonafide pursuing the present proceedings. All contentions of the parties on the merits of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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