Case: Municipal Board, Saharanpur Vs. Imperial Tabacco of India Ltd

the following restrictions namely, -(a) that the tax shall not be imposed on land exclusively used for agricultural purposes, or, where the unit of assessment is a plot of land or a building as hereinafter defined on any such plot or building of which no part is within a radius, to be fixed by rule in this behalf for each municipality, from the nearest stand-pipe or other water-work whereat water is made available to the public by the board; and(b) that the tax is imposed solely with the object of defraying the expenses connected with the construction, maintenance, extension of improvement of municipal water-works and that all moneys derived therefrom shall be expended solely on aforesaid object.Explanation - In this section -(a) "building" shall include the compound (if any) thereof, and, where there are several buildings in common compound, all such buildings and the common compound;(b) "a plot of land" means any piece of land held by a single occupier, or held in common by several co-occupiers; whereof no one portion is entirely separated from any other portion by the land of another occupier or of other co-occupiers or by public property." A mere look at the said provisions shows that in 1957 the Act authorised the appellant Municipality to impose water-tax under Section 128(1) clause (x) subject to the restriction that the tax shall not be imposed on any plot or building of which no part is within the radius prescribed for the municipality from the nearest stand-pipe or other water work. The rules framed by the appellant Municipality which came into force on 12th September, 1958 amongst others, as noted earlier, included Rule 8 which with reference to Section 129(a) of the Act permitted the appellant Municipality to impose water-tax on lands or buildings which were within the radius of 600 feet from the nearest water stand pipe. A conjoint reading of Section 129 (1)(a) and the aforesaid rule 8 of the appellants Rules leaves no room for doubt that after 1958 the appellant Municipality imposed water-tax on lands and buildings which fell within the radius of 600 ft. from the nearest water stand pipe. There was no restriction under these rules to show that the radius of 600 ft. was confined only to residential buildings as tried to be suggested by learned senior counsel Shri Nariman for the respondent. It is of course true that the District Magistrate in his order at page 24 of Volume II and the High Court in the impugned judgment at page 6 have referred to notification dated 12th September, 1958 pertaining to only residential buildings. But when the copy of the original notification as produced with the additional affidavit of Shri Badaru Zaman aforesaid is seen along with the relevant rules no doubt is left in our mind that the said notification entitled the appellant Municipality to impose water-tax on lands and buildings of all types situated within the municipal limits and which were in the radius of 600 ft. from the nearest water stand pipe. Shri Nariman, learned senior counsel for the respondent submitted that when the High Court has referred to notification dated 12th September, 1958 the copy of the notification relied upon in this additional affidavit may refer to some other notification. The aforesaid contention cannot be sustained for the simple reason that a close look at the said notification shows that the sanction for imposition of water-tax is pursuant to the Government Order dated 12th September, 1958 but the draft rules appeared to have been framed on 12th September, 1956. The High Court and the District Magistrate seem to have referred to 12th September, 1958 as the date on which the relevant rules came into force. As the disputed assessment is for a period after 12th September, 1958, the objection raised by Shri Nariman about any inconsistency regarding date of the rules pales into insignificance. Shri Nariman, learned senior counsel for the respondent then submitted that the Gazette Notification is still not produced and only a booklet is produced. But when we turn to the printed booklet, we do not find that what is printed at page 9 of the booklet does refer to the relevant Notification as in terms the number of the relevant notification has been mentioned. There is nothing to indicate that the said notification would not have been gazetted in the same form in which it is printed in the booklet. Presumption under Section 114 of the Indian Evidence Act regarding the performance of Officials Act therefore, would clearly get attracted in the facts of the present case. Nothing was pointed out to us by learned senior counsel for the respondent to indicate that there was any contrary gazette notification or that the gazette notification was laying down any different scheme as compared to the one which is printed in the booklet of 1973 which has stood the test of time for all these years. Consequently, point No. 5 is answered against the respondent and in favour of the appellant by holding that the notification of 12th September, 1958 also brought the factory premises of the respondent company within the tax net of water-tax and the said notification did not cover only the residential buildings. This point is, therefore, answered in favour of the appellant and against the respondent. Point No. (6) : 20. As a result of the aforesaid finding on the relevant points, we set aside the order of the Division Bench and confirm the order of the learned single Judge and allow the writ petition of the appellant Municipality on the reasoning indicated herein-above. It is held that the impugned levy of water-tax on residential and non-residential buildings of the respondent company was perfectly justified in the facts and circumstances of the case. As the levy of the water-tax for the relevant period is found to be well sustained there will remain no question of refunding any amount collected by the appellant towards the said levy from the respondent. 21.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]The learned senior counsel for the respondent company, Shri Nariman rightly invited our attention to the various decisions taking the view that for taxing purpose, if two views are possible on the construction of the provisions, the view which supports the case of the tax-payer should be preferred as compared to the view which support the taxing authority. However, on the express language of Section 129 Explanation (a) it must be held that no two views are possible, but only one view is possible, namely, that the connotation of the term "common compound" is entirely different and wider in nature as compared to the connotation of "compound" as defined in Section 2, sub-section (5) as seen earlier. It is unfortunate that this express provisions in all its aspect was not noticed by any of the courts below, though the Explanation to Section 129 was referred to both by the learned single Judge as well as the Division Bench of the High Court. We may mention at this stage that it was not the case of the respondent company at any time that the occupants of the buildings situated in the Bungalow Park Area or factory area had no common right to pass and re-pass from or to use the open land in which the said structures were situated or that the occupants of the residential bungalows could not use the common childrens park or swimming pool or kitchen etc. Their only contention was that because this common area was not an adjunct of or an area appurtenant to each of these buildings, the buildings that came within the radius of 600 feet from water stand pipe only attracted the water- tax levy. As we have discussed earlier, it is not possible to agree with this contention canvassed by learned senior counsel of the respondent company on the scheme of the Act. As a result of the aforesaid discussion, point No. 1 has to be answered in the affirmative, and point No. 2 in the negative. Thus, the answers on both these points shall be in favour of the appellant and against themere look at the reasoning of the appellate authority shows that it suffered from a patent error of law; while considering Explanation (a) to Section 129 which defines "building" the second part of the Explanation was completely ignored by the appellate authority. As seen earlier, the second part goes beyond the question of "compound" and embraces a wider field, namely, "common compound". As that part of the Explanation was completely ignored and as the appellate authority wrongly concentrated on the definition of the term "compound" as found under Section 2, sub-section (5), the entire reasoning adopted by the learned appellate authority became patently erroneous in law. The said glaring error of law, therefore, was rightly required to be set aside in writ jurisdiction by the learned single Judge. Once this conclusion is reached, the preliminary objection of Shri Nariman to the certificate issued by the High Court does not survive. The question also about the correct connotation of the term "common compound" would certainly give rise to a substantial question of law. However, we may mention that the reasoning adopted by the learned single Judge for upsetting the finding of the appellate authority is not accurate as the learned single Judge also wrongly involved the restricted definition of the term "compound" as found in Section 2, sub- section (5) and assuming that this definition applied, he went in search of appurtenant land being attached to such bungalows. Such exercise was not necessary on the clear scheme of second part of the Explanation (a) to Section 129 as seen earlier. However, by a wrong process of reasoning, ultimately the learned single Judge reached the correct conclusion that a part of the "common compound" land which was to be termed as "building", for the purpose of Section 129, belonging to the respondent company was within the permissible limits of 600 feet from the water stand pipe so as to entitle the appellant Municipality to impose water-tax on the entire complex of the buildings situated in common land belonging to the respondent company. This point for consideration is, therefore, to be answered in the affirmative in favour of appellant and against the respondent.This point for consideration strictly does not arise out of the certificate issued by the High Court in favour of the appellant Municipality. We, therefore, do not deem it fit to consider this point. We are inclined to take this view for a more substantial and practical reason, namely, that this appeal is pending since 1976 in this Court on the Certificate of fitness granted by the High Court. Even assuming that the learned counsel for the appellant is right that the special appeal was not maintainable under the Letters Patent applicable to the High Court of Judicature at Allahabad, respondent would be entitled to urge before us that they may be permitted to challenge the order of the learned single Judge directly before us under Article 136 of the Constitution since the entire period spent by them in the High Court and this Court up till now will get excluded under Section 14 of the Limitation Act. Consequently, at this late stage, we do not deem it fit to allow the appellant to take up this contention for voiding the decision of the Division Bench. Point No. 4, is, therefore, disposed of as not entertained and, therefore, notthe disputed assessment is for a period after 12th September, 1958, the objection raised by Shri Nariman about any inconsistency regarding date of the rules pales into insignificance. Shri Nariman, learned senior counsel for the respondent then submitted that the Gazette Notification is still not produced and only a booklet is produced. But when we turn to the printed booklet, we do not find that what is printed at page 9 of the booklet does refer to the relevant Notification as in terms the number of the relevant notification has been mentioned. There is nothing to indicate that the said notification would not have been gazetted in the same form in which it is printed in the booklet. Presumption under Section 114 of the Indian Evidence Act regarding the performance of Officials Act therefore, would clearly get attracted in the facts of the present case. Nothing was pointed out to us by learned senior counsel for the respondent to indicate that there was any contrary gazette notification or that the gazette notification was laying down any different scheme as compared to the one which is printed in the booklet of 1973 which has stood the test of time for all these years. Consequently, point No. 5 is answered against the respondent and in favour of the appellant by holding that the notification of 12th September, 1958 also brought the factory premises of the respondent company within the tax net of water-tax and the said notification did not cover only the residential buildings. This point is, therefore, answered in favour of the appellant and against the respondent.As a result of the aforesaid finding on the relevant points, we set aside the order of the Division Bench and confirm the order of the learned single Judge and allow the writ petition of the appellant Municipality on the reasoning indicated herein-above. It is held that the impugned levy of water-tax on residential and non-residential buildings of the respondent company was perfectly justified in the facts and circumstances of the case. As the levy of the water-tax for the relevant period is found to be well sustained there will remain no question of refunding any amount collected by the appellant towards the said levy from the respondent.