1 wp5801.09 IN THE HIGH COURT OF JUDICATURE AT BOMBAY, BENCH AT AURANGABAD\ WRIT PETITION NO. 5801 OF 2009 Department of Central Excise and Customs, Govt. of India, through its Commissioner, Aurangabad Region, Aurangabad,Town Centre N-5, CIDCO,Aurangabad-431003. Petitioner versus 01. The State of Maharashtra, through its Principal Secretary, Urban Development Department, Mantralaya, Mumbai - 32. 02. The Director of Municipal Administration, Maharashtra State,Mumbai. 03. The Aurangabad Municipal Corporation, Aurangabad, through its Commissioner. Respondents ----------- Mr. Nitin S. Choudhary, Advocate for the Petitioner. Mr. S.V. Kurundar, Addl. Govt. Pleader for Resp. Nos.1 and 2. Mr. A.A. Karad, Advocate for Respondent No. 3. Coram : Smt. Nishita Mhatre And M.T. Joshi, JJ. Date : 4th July, 2011. Judgment (Per: Smt. Mhatre, J.) 01. Rule. Rule made returnable forthwith, with the consent of the parties. 2 wp5801.09 02. The present petition has been filed by the Department of Central Excise and Customs, seeking refund of an amount of ` 11,02,600/- which it had paid to the Municipal Corporation i.e. Respondent No.3 as property taxes and municipal taxes. 03. The petitioner was allotted a plot of land in the CIDCO area and an agreement to lease the plot was executed between the CIDCO and the petitioner, on 21.1.1985. Service charges were to be paid to CIDCO as mentioned in the agreement. The Petitioner then constructed a building on the plot allotted to it by CIDCO. It sought a completion certificate from the Municipal Corporation, by letter dated 4.12.1993. The petitioner also requested the Corporation to assess the building for property tax. Accordingly, the Corporation issued a completion certificate and raised bills for payment of property taxes, from time to time. The petitioner paid the aforesaid amount without demur. However, on 29.2.1996, the petitioner received an intimation from the Central Public Works 3 wp5801.09 Department, Government of India, that the municipal taxes on the government buildings could be levied only to the extent of 75 per cent of the property taxes realised from private individuals. In these circumstances, the petitioner requested the Corporation to submit a revised bill. Accordingly, it appears that a revised bill was submitted by the Corporation and the amount was paid by the petitioner. 04. Thereafter, by letter dated 22.3.2002, the CIDCO informed the petitioner that service charges must be paid to it and no tax was payable to the Municipal Corporation. A letter was issued by the Petitioner to the Corporation, on 27.5.2002, indicating that an amount ` 11,02,600/= had been erroneously paid by the petitioner towards municipal taxes, such as, property tax, fire tax, Safai tax, drainage tax, water tax, municipal tax, road tax, tree tax, education tax etc. It, however, appears that the Corporation did not pay heed to the request of the petitioner to refund the taxes paid by it. On 1.4.2008, another letter was issued by the petitioner, indicating that the property of the Union of India was 4 wp5801.09 exempted from the applicability of the taxation laws of the State, or Local Body and, therefore, sought a refund of the amount paid. Several reminders were sent to the Corporation in this regard. However, the Corporation did not pay any heed to the request of the Petitioner. Left with no alternative, the petitioner then filed writ petition No. 3185 of 2009 in this court, for a direction to the Corporation to decide its representations. While the aforesaid writ petition was pending, the Corporation passed an order on 11.6.2009, rejecting the petitioner's representation. In these circumstances, the petitioner withdrew the aforesaid writ petition with liberty to file a fresh writ petition, challenging the said decision, dated 11.6.2009. Hence, the present petition. 05. In our opinion, since there is no material on record to indicate that the property, which is in the CIDCO area, has been transferred to the Municipal Corporation, the question of taxes being demanded by the Corporation from the petitioner does not arise. 5 wp5801.09 06. Apart from this, we have considered the provisions of Article 285 of the Constitution of India, which read thus; "285. Exemption of property of the Union from State taxation.- (1) The property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State. (2) Nothing in clause (1) shall, until Parliament by law otherwise provides, prevent any authority within a State from levying any tax on any property of the Union to which such property was immediately before the commencement of this Constitution liable or treated as liable, so long as that tax continues to be levied in that State." 07. Thus, Article 285 clearly mandates that the property of the Union, which includes the petitioner, is exempt from the taxes imposed by any local authority within a State, except to the extent that the Parliament may provide by law. The taxes 6 wp5801.09 imposed under the Bombay Provincial Municipal Corporations Act, 1949 ("The BPMC Act" for short) are enumerated in Section 127 of the Act. Sub-section (4) provides that the Section does not authorise imposition of any taxes which the State Legislature has no power to impose in the State under the Constitution of India. 08. Mr. Karad, the learned Advocate appearing for the Corporation, vehemently opposed the petition, by contending that clause (2) of Article 285 of the Constitution empowers the Corporation to levy such taxes as such tax was being levied on the property prior to the commencement of the Constitution. 09. In our opinion, the contention of the petitioner must be accepted. It is obvious that taxes have been levied by the Corporation and paid by the petitioner on a misreading of the law governing the payment of taxes in respect of properties owned by the Union of India in any State. Although the plot has been leased by CIDCO to the petitioner, the latter has constructed its own building on that land. As the structure on 7 wp5801.09 the aforesaid plot is owned by the Union of India, taxes cannot be levied in respect of that structure by the Corporation. 10. In these circumstances, the petition is allowed. Rule is made absolute in terms of prayers (B) and (C). (M.T. JOSHI, J.) ( SMT. NISHITA MHATRE, J. ) pnd/wp5801.09