JALKAL VIBHAG NAGAR NIGAM & ORS. versus PRADESHIYA INDUSTRIAL AND INVESTMENT CORPORATION & ANR.

Citation: [2021] 12 S.C.R. 210 · Decided: 22-10-2021 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 12 S.C.R.
[2021] 12 S.C.R. 210
210
JALKAL VIBHAG NAGAR NIGAM & ORS.
v.
PRADESHIYA INDUSTRIAL AND INVESTMENT
CORPORATION & ANR.
(Civil Appeal No.  6107 of 2021)
OCTOBER 22, 2021
[DR. DHANANJAYA Y CHANDRACHUD, VIKRAM NATH
AND B. V. NAGARATHNA, JJ.]
Uttar Pradesh Water Supply and Sewerage Act 1975 –
ss.52(1)(a), 55(b)(1), 56 – Constitutional validity of – Challenge to
– Held: Rejected – Levy u/s.52 falls squarely under the ambit of
Entry 49, List II as it is in the nature of a tax and not a fee –
Nomenclature of the tax does not indicate its true character and
substance – Nor does the fact that the law enables the Jal Sansthan
to levy the tax render it a tax on water – Tax has been labelled as
the water tax or a sewerage tax because it is imposed by the Jal
Sansthan constituted under the UP Water Supply and Sewerage
Act – That does not alter the nature of the levy which in substance
is a tax on lands and buildings within the meaning of Entry 49 of
List II of the Seventh Schedule – Tax is imposed on an occupier or
owner of the building or land falling within the area of the Jal
Sansthan irrespective of whether a connection of water supply or
sewerage has been obtained to the land or building – Basis for the
levy of the taxes is on the location of premises within the area of the
Jal Sansthan – Since the respondent’s premises are located within
the area of the appellant’s authority, the respondent is liable to pay
the water tax as well as the sewerage tax as the owner and occupier
of the premises – Judgment of High Court set aside – Writ petition
filed by the first respondent dismissed – Appellants entitled to recover
the balance of the dues remaining to be recovered in pursuance of
the notice of demand with interest @ 9% p.a. – Constitution of India
– Seventh Schedule, List II, Entry 49 – Jal Sansthan (Assessment of
Annual Value of Premises) Rules 1981 – Jal Sansthan (Radius
regarding Levy of Water Tax) Rules 1993.
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Uttar Pradesh Water Supply and Sewerage Act 1975 – s.52 –
Held: Levy u/s.52 is a tax simplicitor and cannot be regarded either
as a charge or a fee for a service rendered – Observations in Union
of India v. State of U.P. and Others reported as [2007] 11 SCR 792
that though the charges are loosely termed as tax, it is in substance
a fee, is per incuriam and are overruled.
Uttar Pradesh Water Supply and Sewerage Act 1975 – ss.52,
24, 25, 53 – Levy of tax u/s.52 – Purpose of legislation – Discussed.
Uttar Pradesh Water Supply and Sewerage Act 1975 – ss.52,
55 – Restrictions on the levy of tax u/s.52 – Held: Restrictions
imposed by s.55 do not render the tax a fee, nor are they indicative
of the tax being charged for the actual use of water.
Uttar Pradesh Water Supply and Sewerage Act 1975 – ss.52,
56 – Held: Payment of water tax and sewerage tax is regardless of
whether the premises are connected with water supply or with a
sewer of the Jal Sansthan – There is no exemption from the payment
of water tax or sewerage tax as both the contingencies- the premises
being connected with water supply (or, as the case may be, with a
sewer of the Jal Sansthan) or there being no such connection have
been covered u/s.56 – So long as a provision for water supply or a
sewerage is made by the Jal Sansthan in the area covered, the
occupier or the owner of the premises is liable to pay the taxes.
Constitution of India – Constitutional jurisprudence –
Distinction between tax and fee – Held: It has substantially been
effaced in the development of the constitutional jurisprudence.
Words & Phrases – “premises” in s.2(18) – Held: In the
context of s.52, the levy by the Jal Sansthan is “on premises situated
within its area” meaning the area within which the Jal Sansthan
exercises its jurisdiction and powers – Levy is on premises –
“Premises” is defined in s.2(18) to mean “any land or building” –
Hence, read together with the definition of the expression “premises”,
the levy is squarely on lands and buildings situated within the area
of the Jal Sansthan – Uttar Pradesh Water Supply and Sewerage
Act 1975 – ss.2(18), 52.
JALKAL VIBHAG NAGAR NIGAM v. PRADESHIYA INDUSTRIAL AND
INVESTMENT CORP.
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SUPREME COURT REPORTS
[2021] 12 S.C.R.
Allowing the appeals, the Court
HELD : 1.1 An overview of the provisions of the UP Water
Supply and Sewerage Act indicate that separate and distinct
provisions are contained in Chapter VI for (i) taxes; (ii) fees; and
(iii) char

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