1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.4328 OF 2008 M/s.Sargam Foods Pvt.Ltd.& Anr. .. Petitioners V/s State of Maharashtra & Ors. .. Respondents Mr.Jitendra Jain with Mr.Nilesh Gala i/by M/s.Shah & Sanghavi for the petitioners. Mrs.S.S.Bhende, AGP for Respondent No.1. Mr.A.A.Garge for Respondent Nos.2 & 3. CORAM : P.B.MAJMUDAR & R.G.KETKAR, J. DATE : 8th July, 2010 P.C. : 1. By this petition under Article 226 of the Constitution of India, the petitioners challenge the order dated December 27, 2006 passed by the Respondent No.2, Deputy Municipal Commissioner (Cess) of Municipal Corporation of City of Navi Mumbai (for short NMMC) under Rule 25 (5) of the Bombay Provincial Municipal Corporation (Cess on entry of goods) Rules, 1996 (for short the Rules). 2. The petitioners contend that the 1st Petitioner is carrying on its business of manufacturing and distribution of Hing (compounded asofoetida) from Plot No.D/162, 163, MIDC Industrial Area, Shrivane, Navi Mumbai. The 1st Petitioner is also a member of Small Scale Entrepreneurs Association (for short the Association) which had challenged the competence of the 3rd Respondent- NMMC from levying and recovering cess from industries in Maharashtra Industrial Development Corporation (for short MIDC) area in 2 Thane-Belapur Industrial Belt (for short TBIB) in Writ Petition No.2787 of 2001. It is their case that the 1st Petitioner under the mistaken belief of law filed the return for the period 2001-2002 and the 1st Petitioner also paid cess amounting to Rs.1,01,699/-. 3. It is the case of the petitioners that the Association issued Circular on November 20, 2005 where-under it was stated that the jurisdiction of the NMMC to collect property tax and the cess was challenged in Writ Petition No.2787 of 2001. It is at this stage the 2nd petitioner enquired into the matter and realised that the 1st petitioner under the mistaken belief of law had wrongly paid the cess for the period 2001-2002. 4. On October 5, 2006, Respondent No.2 served the notice in Form “H” issued under Rule 25(3), (10), (11) of the Rules calling upon the petitioners to show cause as to why they should not be assessed under Rule 25(5) of the Rules. On November 29, 2006, Respondent No.2 gave a proposal for best judgment assessment as per Rule 25(5) of the Rules. It was set out therein that the statutory notice in form “H” was served on the petitioners on September 15, 2003 and they were called on October 6, 2003 with all books of account to assess the cess liability for the period from 1.4.2001 to 31.3.2004 and the petitioners herein failed to attend on the appointed date. Despite giving sufficient opportunities to produce the books of accounts, the petitioners failed to produce the same. It was therefore proposed to assess the petitioners ex-parte on best judgment basis as per Rule 25(5) of the Rules. The petitioners were finally called on December 7, 2006 with all the books of accounts for verification for the relevant periods. 3 It was further made clear that if the petitioners fail to attend on the said date, the assessment order will be passed as proposed. 5. The petitioners replied the show cause notice on December 4, 2006 setting out therein that the matter is sub-judice in the High Court in Writ Petition No.2787 of 2001 and requested not to initiate any proceedings and pass any orders with respect to levy of cess. Respondent No.2 passed an order on December 27, 2006 under Rule 25(5) of the Rules, which is impugned in the present petition. 6. We have heard the learned counsel for the parties. The learned counsel for the petitioners contended that in the MIDC area where their factory is situate, no service is rendered by the NMMC and as such levy & collection of cess is bad in law and without authority of law. He further submitted that the Respondent No.2 passed an order without affording reasonable and fair opportunity to the petitioners. It was also submitted that the MIDC is a special planning authority as per section 40 (1A) of the Maharashtra Regional & Town Planning Act, 1966 and therefore, is a local authority for the area under the MIDC. Consequently, the 3rd Respondent NMMC has no authority to levy and collect the cess in the MIDC area. The learned counsel for the petitioners submitted that under Rule 25(5) of the Rules, the Commissioner of the NMMC alone could have passed the order and since the Respondent No.2 is not the authorised officer under the Rules, the impugned order passed by the 2nd Respondent on December 27, 2006 is without any authority of law. 7. On the other hand, learned counsel for the Respondent Nos.2 & 3 4 submitted that the NMMC is authorised to levy and recover cess under the provisions of the Bombay Provincial Municipal Corporations Act, 1949 (for short the BPMC Act) and Rules framed thereunder. In so far as the contention raised by the petitioners that the 2nd Respondent is not authorised to pass the impugned order is concerned, it is contended that he is one of the cess authorities under section 152E of the BPMC Act, and therefore, no fault can be found with the order. And therefore, no fault can be found with that order. He submitted that the petitioners were given more than fair and reasonable opportunity, however, they did not avail of the same. He submitted that right from the year 2003, the petitioners were repeatedly called upon alongwith the books of accounts for assessing the cess liability. 8. As far as contentions raised by the petitioners that no service is rendered by the NMMC and as such levy and collection of cess is bad in law and without authority of law, he submitted that the cess is levied in lieu of octroi, which is one of the taxes covered by Section 127 of the BPMC Act, viz.Section 127(2) (aa) thereof. He also submitted that since the property of the petitioners falls in MIDC area which is part of the municipal limits of the NMMC, levy and collection of cess is in accordance with law. 9. By a separate order passed by us in Writ Petition No.2787/2001, we have held that the MIDC area is within the municipal limits of the NMMC and consequently having regard to the provisions of the BPMC Act, the NMMC has power and competence to levy and recover taxes which obviously includes cess as well. For the reasons set out in the order passed in Writ 5 Petition No.2787 of 2001, we reject this contention. We do not find any substance in the contentions raised by the petitioners that the MMMC has no power to levy and recover the cess. In so far as submission that the Respondent No.2 Deputy Municipal Commissioner is not authorised under the Rules, is concerned, from the perusal of notice of demand in form “J” issued under Rule 25(14) of the Rules, it is evident that the remedy of appeal u/s.406 of the BPMC Act is available. The petitioners will be at liberty to agitate the said contention in the appeal. In view of this, we do not express any opinion on these contentions as it is open to the petitioners to file appeal against the impugned order u/s.406 of the BPMC Act raising all the contentions available, excepting the competence of the NMMC to levy and recover the cess. 10.In case the petitioners prefer the appeal within eight weeks from today, the learned Judge shall decide the appeal in accordance with law by taking into consideration the fact that the petitioners were bonafide prosecuting their remedies in the form of this writ petition in this Court. 11.In the result, we are of the opinion that the petitioners have not made out any justifiable ground for invocation of extra-ordinary jurisdiction of this Court under Article 226 of the Constitution of India. The Petition fails. Rule is accordingly discharged, with no order as to costs. (R.G.KETKAR, J.) (P.B.MAJMUDAR, J.)