Bangalore Development Authority vs Air Craft Employees Coop.Society ...

(2) The report shall further contain a summary of the findings in the surveys carried out under sub-section (2) of section 19, and give relevant information and data supporting proposals in the plan and deal in detail with.-

(k) the suspension, so far as may be necessary for the proper carrying out of the scheme, of any rule, bye-

28-B. Levy of tax on lands and buildings.- (1) Notwithstanding anything contained in this Act, the Authority may levy a tax on lands or buildings or on both, situated within its jurisdiction (hereinafter referred to as the property tax) at the same rates at which such tax is levied by the Corporation within its jurisdiction.

10.As a result of unprecedented increase in the population of the city of Bangalore between 1970 and 1980, the available civic amenities like roads, water supply system and supply of electricity were stretched to their limit. To meet the additional requirement of water and electricity and to tackle the problems of traffic, new schemes were prepared in the development plan of Bangalore city, which was approved in 1984. These included augmentation of water supply, formation of Ring 23 Road etc. Bangalore Water Supply and Sewerage Board (BWSSB) submitted a proposal to the State Government for taking up of Cauvery Water Supply Scheme, Stage III (for short, `the Cauvery Scheme') for supply of an additional 270 MLD water to Bangalore at a cost of Rs. 240 crores. The proposed financing pattern of the project was as follows:

11.By an order dated 28.06.1984, the State Government, after taking cognizance of the difficulties being experienced by BWSSB in supplying water to the Bangalore Metropolitan Area and the possibility of acute shortage of water in next 10 years if the supply was not augmented, granted approval to the Cauvery Scheme.

The State Government accepted the suggestion of the BDA and passed order dated 12.1.1993 for the levy of charges under the Cauvery Scheme at the rate of Rs.2 lacs per acre.

14.In 1992, the BDA also decided to take up the construction of 63.30 kilometers long Outer Ring Road and 3.5 kilometers long Intermediate Ring Road at an estimated cost of Rs.115 crores with a possible escalation up to Rs.130 crores. 36.24 kilometers of the Outer Ring Road was to pass through the BDA layouts and the balance was to pass through the land outside the BDA layouts. The cost of construction of Outer Ring Road passing through the BDA layout was to be met by charging the allottees of sites in the BDA layouts. For the balance 27.06 kilometers of Outer Ring Road and 3.5 kilometers of Intermediate Ring Road a proposal was prepared 26 to obtain financial assistance from the World Bank. In the meeting held on 5.6.1992 under the chairmanship of the Chief Secretary of the State, the possibility of taking loan from HUDCO was explored. Simultaneously, it was considered whether partial burden of the cost could be passed on to the beneficiaries of the private layouts and it was agreed that like the Cauvery Scheme, Ring Road surcharge should be levied on the sites to be formed by the BDA and the private housing societies at the rate of Rs.1 lac per acre. Thereafter, the BDA passed Resolution dated 19.10.1992 for levy of charges at different rates on change of land use in different areas and Rs.1 lac per acre on the layouts of housing societies and private lands as also the sites formed by itself.

Question (2)

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We may add that it could not have been possible for the legislature to make provision for effective implementation of the provisions contained in the 1961 and 1976 Acts for the development of the Bangalore Metropolitan Area and this task had to be delegated to some other agency/instrumentality of the State.

Question (3)

56. The next question which calls for determination is whether the demand of charges under the Cauvery Scheme, etc. amounts to imposition of tax and is, therefore, ultra vires the provision of Article 265 of the Constitution.

Lakshmindra Thirtha Swamiar of Shirur Mutt (1954) SCR 1005 and proceeded to observe:

a quid pro quo for the services rendered. However, correlationship between the levy and the services rendered (sic or) expected is one of general character and not of mathematical exactitude. All that is necessary is that there should be a "reasonable 90 relationship" between the levy of the fee and the services rendered."

Though the general public may be benefited from some of the services like laying roads, the primary service was to the producer, dealer and purchaser of the agricultural produce.

The element of quid pro quo is not possible or even necessary to be established with arithmetical exactitude. But it must be established broadly and reasonably that the amount is being spent for 92 rendering services to those on whom the burden of the fee falls. There is no postulate of a fee that it must have a direct relation to the actual services rendered by the authorities to each individual to obtain the benefit of the service. The element of quid pro quo in the strict sense is not always a sine qua non for a fee.

The element of quid pro quo is not necessarily absent in every tax. It is enough if there is a broad, reasonable and general corelationship between the levy and the resultant benefit to the class of people on which the fee is levied though no single payer of the fee receives direct or personal benefit from those services.

It is immaterial that the general public may also be benefited from some of the services if the primary service intended is for the payers of the fees."

Question (4)

15.15 crores has been collected by way of Ring Road surcharge between 1992-93 and 2005-06 and that the State Government has directed that henceforth Ring Road surcharge, the Cauvery Water Cess and MRTS Cess should not be levied till appropriate decision is taken, we do not consider it necessary to adjudicate the controversy, more so, because in the written arguments filed on behalf of the BDA it has been categorically stated that the Government has to take a decision about the pending demands and the Court may issue appropriate direction in the matter, which the BDA will comply. In our view, ends of justice will be served by directing the State Government to take appropriate decision in the light of communication dated 03.05.2005.

68. In the result, the appeals are allowed, the impugned order is set aside and the writ petitions filed by the respondents are dismissed subject to the direction that within three months from the date of receipt/production of the copy of this judgment, the State Government shall take appropriate decision in the context of communication dated 03.05.2005. Within this period, 97 the State Government shall also decide whether the levy of supervision charges, improvement charges, examination charges, slum clearance development charges and MRTS cess at the rates specified in the communications of the BDA was excessive. The decision of the State Government should be communicated to the respondents within next four weeks. If any of the respondents feel aggrieved by the decision of the State Government then it shall be free to avail appropriate legal remedy. The parties shall bear their respective costs.