1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO. 2171 OF 1996 M/s Universal Starch Chem Allied Ltd., Rawal Industrial Estate, Dondaicha, Dist. Dhule. .... PETITIONER V E R S U S 1. The State of Maharashtra Through the Govt. Pleader, High Court of Bombay Bench at Aurangabad. 2. The Chief Officer Dondaicha Varwade Municipal Council, Dondaicha, Tq. Sindkheda, Dist. Dhule. 3. The Chairman Property Tax Tribunal Dondaicha Varwade Municipal Council, Dondaicha, Tq. Sindkheda, Dist. Dhule. .... RESPONDENTS Mr. P.R.Patil, Advocate for petitioner. Mrs. R.K.Ladda, Assistant Govt. Pleader for State. Mr. S.T.Shelke, Advocate for respondent no. 2. WITH WRIT PETITION NO. 2172 OF 1996 M/s Jayjeet Soap Industries Pvt. Ltd., Dondaicha, Rawal 2 Industrial Estate, Dondaicha, Tq. Sindkheda, Dist. Dhule. .... PETITIONER V E R S U S 1. The State of Maharashtra Through the Govt. Pleader, High Court of Bombay Bench at Aurangabad. 2. The Chief Officer Dondaicha Varwade Municipal Council, Dondaicha, Tq. Sindkheda, Dist. Dhule. 3. The Chairman Property Tax Tribunal Dondaicha Varwade Municipal Council, Dondaicha, Tq. Sindkheda, Dist. Dhule. .... RESPONDENTS Mr. P.R.Patil, Advocate for petitioner. Mrs. R.K.Ladda, Assistant Govt. Pleader for State. Mr. S.T.Shelke, Advocate for respondent no. 2. WITH WRIT PETITION NO. 2173 OF 1996 M/s Don Food Products Pvt. Ltd., Rawal Industrial Estate, Dondaicha, Tq. Sindkheda, Dist. Dhule. .... PETITIONER V E R S U S 1. The State of Maharashtra Through the Govt. Pleader, 3 High Court of Bombay Bench at Aurangabad. 2. The Chief Officer Dondaicha Varwade Municipal Council, Dondaicha, Tq. Sindkheda, Dist. Dhule. 3. The Chairman Property Tax Tribunal Dondaicha Varwade Municipal Council, Dondaicha, Tq. Sindkheda, Dist. Dhule. .... RESPONDENTS Mr. P.R.Patil, Advocate for petitioner. Mrs. R.K.Ladda, Assistant Govt. Pleader for State. Mr. S.T.Shelke, Advocate for respondent no. 2. WITH WRIT PETITION NO. 2174 OF 1996 M/s Jaychandra Agro Industries Pvt.Ltd. Rawal Industrial Estate, Dondaicha, Tq. Sindkheda, Dist. Dhule. .... PETITIONER V E R S U S 1. The State of Maharashtra Through the Govt. Pleader, High Court of Bombay Bench at Aurangabad. 2. The Chief Officer Dondaicha Varwade Municipal Council, Dondaicha, Tq. Sindkheda, Dist. Dhule. 3. The Chairman Property Tax Tribunal 4 Dondaicha Varwade Municipal Council, Dondaicha, Tq. Sindkheda, Dist. Dhule. .... RESPONDENTS Mr. P.R.Patil, Advocate for petitioner. Mrs. R.K.Ladda, Assistant Govt. Pleader for State. Mr. S.T.Shelke, Advocate for respondent no. 2. CORAM : B.R.GAVAI AND S.V.GANGAPURWALA, JJ. DATE : 25/06/2010 ORAL JUDGMENT : [ PER - S.V. GANGAPURWALA, J. ] 1. All these petitions involve common question of law. As such, are decided by the common Judgment. 2. The petitioners are body corporates registered under the Indian Companies Act and they have their Factories situated at Rawal Industrial Estate, Dondaicha, Tq. Sindkheda, Dist. Dhule. Respondent no. 2 is the ‘ C ’ class Municipal Council in the Dondaicha Varwade municipal area, Dondaicha, Tq. Sindkheda, Dist. Dhule. The area in which the Factories of the petitioners are situated was initially under the Dhule Zilla Parishad and subsequently came to be included in the municipal area of respondent no. 2 w.e.f. 1/1/1993 under the Notification of even date, issued by the State Govt. Initially, i.e. prior to the inclusion of the area within limits of respondent no. 2, the petitioner in Writ Petition No. 2171 of 1996 was required to pay property tax to the Dhule Zilla Parishad amounting to Rs. 1071/-. The petitioner in the petitioner in Writ Petition No. 2172 of 1996 was 5 required to pay property tax to the Dhule Zilla Parishad amounting to Rs. 100/-. the petitioner in Writ Petition No. 2173 of 1996 was required to pay property tax to the Dhule Zilla Parishad amounting to Rs. 133.80 Ps. and the petitioner in Writ Petition No. 2174 of 1996 was required to pay property tax to the Dhule Zilla Parishad amounting to Rs. 5985/-. 3. The petitioners contend that after the said area was included within the municipal limits of respondent no. 2, respondent no. 2 issued notices seeking to levy the property tax to the petitioner in Writ Petition No. 2171 of 1996 at Rs. 2,88,678/-, to the petitioner in Writ Petition No. 2172 of 1996 at Rs. 20,527/-, to the petitioner in Writ Petition No. 2173 of 1996 at Rs. 20,230/- and to the petitioner in Writ Petition No. 2174 of 1996 at Rs. 49,050/- vide demand notice. The same was objected by the petitioners. On receiving the objections, respondent no. 2 gave hearing to the petitioners. In spite of the said objections, respondent no. 2 raised the bills on the petitioner in Writ Petition No. 2171 of 1996 amounting to Rs. 3,08,396/-, on the petitioner in Writ Petition No. 2172 of 1996 amounting to Rs. 16,333.20 Ps., on the petitioner in Writ Petition No. 2173 of 1996 amounting to Rs. 12,473.30 Ps. and on the petitioner in Writ Petition No. 2174 of 1996 amounting to Rs. 29,293.55 Ps. The petitioners have challenged the said demand notice and levy of property tax on the properties of the petitioners. 4. Mr. P.R. Patil, the learned counsel for the petitioners contended that the said property tax levied by respondent no. 2 was beyond the authority of respondent no. 2. According to him, the properties of the 6 petitioners came to be included within the municipal limits for the first time on 1/1/1993. As such, for the first year, the petitioners would not be liable to pay the property tax more than what they were paying in the preceding year and for that purpose relied on the provisions of Section 106-A of the Maharashtra Municipalities (II amendment) Act, 1992 (Act No. 13 of 1993) ( For short, ‘ said Act ’ ). The same reads thus : “ 106- A : Temporary provision for levying general tax at reduced rate in area of Zilla Parishad included in 2 ( a smaller urban area ). (1) Notwithstanding anything contained in Section 105 or any other provision of this Act, whenever - (a) a new ( smaller urban area ) is declared under sub-section (1) of Section 3 comprising, wholly or partly, of an area of a Zilla Parishad, or (b) the limits of a ( smaller urban area ) are altered under clause (a) of sub-section (1) of section 6 so as to include any area of a Zilla Parishad, then the general tax shall be levied on buildings and lands in the former Zilla Parishad area during the period specified in column 2 of the Table hereto appended at the amounts specified against them in column 3 thereof, and such amounts shall not be liable to be increased under section 147 or any other provisions of this Act during the said periods. 7 TABLE Sr. No. Period Amount of general tax. (1) (2) (3) 1. Period from the date of inclusion The amount calculated at of the area in the (smaller urban the rate of tax on lands and area upto the inclusive of 31st building payable in the area March of the second year following immediately before the the year in which the area is inclusion in the municipal included in the (smaller urban area, under clause (i) of area ) . sub section (1) of Section 124 of the Bombay Village Panchayat Act, 1958 (Bom. III of 1959 ) or clause (e) of section 157 of the Maharashtra Zilla Parishads and Panchayat Samities Act, 1961 (Mah.V of 1962 ) as the case may be (hereinafter in this Table referred to as ‘ the amount of tax payable in the Zilla Parishad area ’ ). 2. Period of one year following the 20 per cent of the amount period referred to entry 1. of general tax payable in the (smaller urban area ) or the amount of tax payable in the Zilla Parishad area, whichever is more. 3. Period of one year following 40 per cent of the amount of the period referred to general tax payable in the entry 2. (smaller urban area ) or the 8 amount of tax payable in the Zilla Parishad area, whichever is more. 4. Period of one year following 60 per cent of the amount the period referred to of general tax payable in the entry 3. (smaller urban area ) or . the amount of tax payable in the Zilla Parishad area, whichever is more. 5. Period of one year following 80 per cent of the amount of the period referred to general tax payable in the entry 4. (smaller urban area ) or the amount of tax payable in the Zilla Parishad area, whichever is more. 6. Any period after the expiry The same amount of general of the period referred to tax as in force and entry 4. payable in the remaining area of the (smaller urban area ). (2) The Council shall spend at least one third of the per capita expenditure incurred in the municipal area for the year immediately preceding the year of inclusion of the Zilla Parishad area of any such higher amount as may be convenient on development works in the newly included area for the period mentioned in entries 1 to 5 in the Table in Sub Section (1) ”. 5. According to Mr. Patil, the language of Section 106 is unambiguous. As per the said provision, the municipal council does not 9 possess any authority or right to levy the property tax more than the amount which was paid in the preceding year and as such contends that the property tax levied by the municipal council is exorbitant, beyond their competence and deserves to be set aside. 6. On perusal of Section 106-A, it is manifest that the respondent Municipal Council did not have any authority or right to levy the property tax on the lands and buildings for the first year more than what was payable immediately before its inclusion in the municipal area. Article 265 of the Constitution of India mandates that tax should not be recovered except according to due procedure established by law. When the provision did not permit the authority to levy the tax more than what was payable immediately before the inclusion of said area in the municipal area, then in such circumstances, the tax levied being in excess of the authority, would be against the provisions of Statute and as such illegal. 7. On this count itself, the petition succeeds. As such, we are not discussing the other challenges raised in the petition. 8. The petitioners have also prayed to declare the provisions of Section 170 of the said Act, as amended by Act No. 13 of 1993, as ultra virus and un-constitutional. The said provision of Section 170 of the said Act has further undergone the amendment. As such, the said challenge does not survive. 10 9. In view of the aforesaid premise, the Writ Petitions are allowed. Rule is made absolute in terms of prayer clause ‘ C ’ and ‘ D ’ . However, there shall be no order as to costs. [ S.V.GANGAPURWALA ] [ B.R.GAVAI ] JUDGE JUDGE knp/WP 2171...........96