IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.5115 of 2002 1. RAJ KISHORE SINGH S/o Sri Jag Narayan Singh 2. Kalyan Singh S/o Late Chabbila Singh 3. Deo Raj Kunwar S/o Late Ram Sakal Kunwar 4. Bramha Tiwari S/o Late Dhurendra Tiwari 5. Janardan Giri S/o Jang Lal Giri. 6. Tulsi Tiwari S/o Late Jai Tiwari 7. Tej Narayan Yadav S/o Late Ram Chandra Rai Versus THE UNION OF INDIA & ORS ----------- For the petitioners: M/s. Subodh Kumar Jha & Amrendra Kumar, Advocates. For the Union of India: Mr. Sanjay Kumar,Advocate. For the State: Mr. Binita Singh,J.C. to A.A.G.,III. 9 27.10.2009 Heard the learned counsel for the parties. The petitioners pray for commanding the respondents to grant them exemption from payment of Municipal taxes levied by Patna Municipal Corporation under Section 3 of the Municipal Tax Act, 1981(hereinafter to be referred to as „the Act‟). All the seven petitioners are ex army personnel injured. Learned counsel submits that the petitioner No.1 is disabled Ex- Service Personnel, bearing No.4249056 (SEP).He was injured during Indo-Pak War in 1971 and was discharged from service on 1.3.1974. He was allotted Flat No.155, Holding No.1000/1555, Defence Colony, Lohia Nagar, Kankarbagh by Bihar State Housing Board vide Letter No.1633 dated 20.4.1973. The Government had floated a scheme for allotment of flat to the families of Armed Forces killed or disabled in the Indo- Pak War of 1965 and 1971. Similarly petitioners no.2 to 7 were also allotted different flats under the aforesaid beneficial scheme. The allotment orders of flat are contained in Annexures-1 to 7. The petitioners are 2 claiming exemption on basis of Circular dated 24.7.1979 issued by The Secretary, Rajya Sainik Board, Jaipur, Rajasthan under the provision of Section 3 of the Act. The aforesaid circular according to him grants exemption of tax to the Armed Forces Personnels. The copy of the aforesaid Circular is annexed as Annexure-8 to the writ application. Para 2 of the aforesaid circular is very relevant and as such is quoted herein below: “ I am directed to say that under the provision of Section 3 of the Municipal Taxation Act 1881 (Central Act No.11 of 1881 ), Armed Forces Personnels are exempted from payment of Taxes levied by Municipalities / District Boards. In exercise of the powers conferred by Section 4 of the said Act, the loss caused to the Municipa- lities/ District Boards by grant of exemption of the Armed Forces personnel is made good from the Defence Services Estimates.” The petitioners, thus, states that they are entitled to exemption from payment of Municipal tax. They submit that time and again they had represented to the Government to grant them necessary exemption from payment on Municipal Tax by exercising necessary power under section 3(a) of the Act, 1881. A counter affidavit has been filed on behalf of Union of India as well as on behalf of respondent no.3, the Director, Rajya Sainik Board,, Sainik Welfare Directorate, Old Secretariat, Patna. 3 The learned counsel for the Union of India submits that the Circular dated 24.7.1979 does not apply to Ex-service Army Man. He submits that the aforesaid Circular dated 24.7.1979 contained in Annexure-8 was clarified by Ministry of Defence letter No.30(143)/86/P (Pay/Services) dated 15th September, 1987 according to which the Ex-Service men were not subject to Army Act/ Navy Act/ Air Force Act are not exempted from Municipal or Cantonment taxes on salaries, professions, trades etc. He submits that in other words Ex- Servicemen were not exempted from payment of property tax, professional tax etc. levied by local Government. Section 3 of the Act grants power to the Central Government to prohibit levy of tax by an order in writing in favour of any person subject to the Army Act, 1950, the Navy Act, 1957 or the Air Force Act, 1950, who is compelled by the exigencies of military, naval or air- force duty to reside within the limits of a municipality. By an amendment incorporated in 1937 such power was vested with the State Government also. It would be useful to quote section 3 (A) of the Act:- “13A. Power of State Government to prohibit levy of taxes on it – Notwithstanding anything in any enactment for the time being in force, the (State) Government may by an order in writing prohibit the levy by a Municipal Committee of any specified tax payable by the (State) Government and may by a like order rescind any such prohibition.” 4 Ministry of Defence, Government of India issued an order granting exemption from payment of tax levied by Municipality and District Board. The aforesaid circular was clarified by Ministry of Defence, Government of India vide letter dated 15th September, 1987 stating therein that Ex- Service men being not subject to Army Act/ Navy Act/ Air Force Act were not exempted from payment of above mentioned levied by local bodies. It would appear from Section 3 of the Act itself that exemption from levying tax is granted to Ex-Service men who on account of compulsion and exigencies of services have to reside within the limits of a Municipality or a Contonment. The Central Government has clarified its earlier circular dated 24.7.1979 by the subsequent letter dated 15.9.1987 stating that it has extended the grant of exemption of Municipal Tax to Military personnels who are in Service and are compelled to reside within the limits of Municipality in view of exigencies of service. The State Government under section 3A of the Act has ample power to prohibit levy of tax. In back drop of the aforesaid discussions, I find that the benefit of exemption of Municipal Tax has been limited by the Central Government to the Military personnel who are in service and not to Ex-Service men. As such the petitioners‟ claim of circular dated 24.7.1979 contained in Annexure-8 of the Union Government is misconceived and, thus, they are not entitled to exemption of Municipal tax on basis of the aforesaid circular. However, the State Government is competent to grant exemption under section 3(A) of 5 the Act from levying of Municipal tax as it may deem expedient. In view of the aforesaid circumstance this writ application is disposed of with observation that the petitioners may pursue their representations with the State Government. Anilkr.sinha (S.P.Singh,J.) 6 Anilkrsinha (Samarendra Pratap Singh, J.)