LexKALYAN MUNICIPAL COUNCIL & ORS. versus USHA PAPER PRODUCTS (P) LTD. & ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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KALYAN MUNICIPAL COUNCIL & ORS.
v.
USHA PAPER PRODUCTS (P) LTD .. & ANR.
MAY 3, 1988
IR.S. PATHAK, CJ AND M.H. KANIA, J.]
Maharashtra Municipalities Act-S. 123( 1) of-Whether altera-
tion in assessment list becomes effective for any period prior to comm-
encement of official year in which alteration in assessment list is made
and Municipality is entitled to levy tax for any official year or any part
thereof already expired under provisions of
After levy of the property tax by the Kalyan Municipal Council
('the Mnnicipal Council') on the immovable properties of the Respon-
dent No. 1 ('the company') in respect of certain years, the Municipal
Council detected certain new construction and alterations in the exist-
D ing properties of the Company, and on October 3, 1973 a resolution was
passed by the Standing Committee increasing the rateable value of the
said immovable property from 1.4.70 to 31.3.74. A demand notice,
demanding additional property tax, Educational cess and Health Tax,
was issued thereafter to the Company. The Company challenged the
notice of demand before the High Court. The High Court decided in
E favour of the Company, holding that alteration made in the assessment
list after following the procedure under section 123(1) of the
Maharashtra Municipalities Act (the 'said Act') did not become effec-
tive for any period prior to the commencement of the official year in
which the alteration in the assessment list was made and the Municipal-
ity was not entitled to levy tax for an official year or any part thereof
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which was already expired. This appeal was filed in this Court agi.inst
that decision of the High Court.
Dismissing the appeal, the Court,
HELD: The ratio of the decision of the Full Bench of the Bombay
G High Court in Sholapur Municipal Corporation v. Ram Chandra
Ramappa Madgundi, 11972] 74 Bombay Law Reporter 469, upon which
the judgment of the High Court impugned in this case was based,
applied to this case. The appellants contended that the said case before
the Full Bench had been wrongly decided and the judgment under
appeal based on that decision was also erroneous. this contention must
H be negatived in view of the decision of this Court in Municipal Corpora-
832
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KAL YAN MUNICIPAL COUNCIL v. USHA PRODUCTS [KANIA, J. I 833
tion of City of Hubli v. Subba Rao Hanumatharao Prayag & Ors.,
(1976] 3 S.C.R. p. 883, which approved the said decision of the Full
Bench of the High Court, and which is binding on the Court and clearly
applicable to this case. In that judgment, this Court had pointed out that
once it was accepted that the process of levying the tax was complete
only when the assessment list was authenticated and it was only then
that the tax was levied on the rate-payers, the authentication must be
made within the official year. The tax, being a tax for the official year,
must be levied during the official year and since the levy of the tax. is
complete only when the assessment list is authenticated, it must follow
that the authentication must take place in the official year. The official
year is the unit of taxation as far as Municipal property taxes are
concerned. (8360, G, 837A-BJ
If an assessment list could be altered at any time if the conditions
set' out in Section 123 of the said Act are satisfied, the result would be
that there would be complete uncertainty in the field of taxation of
property and unwary purchasers of immovable property might be put
to the difficulty of having to discharge the liabilities for property taxes
for years long prior to the time when they had purchased the immovable
property in order to save the property from being sold in recovery
proceedings. (837B-C]
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Sholapur Municipal Corporation v. Ramchandra Ramappa
Madgundi, [1972] 74 Bombay Law Reporter 469 and Municipal Cor-
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poration of City of Hubli v. Subha Rao Hanumatharao Prayag & Ors.,
[1976] 3 S.C.R. 883, referred to .
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CIVIL· APPELLATE JURISDICTION: Civil Appeal No. 317
of 1984.
From the Judgment and Order dated 10.1.80 of the Bombay
High Court in Special Civil Application No. 1471/75.
P.H. Parekh for the appellants.
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U.R. Lalit, B.P. Maheshwari and R.S. Rana for the respondents.
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The Judgment of the Court was delivered by
KANIA, J. This is an appeal against the judgment of a Division
Bench of the Bombay High Court delivered on January 10, 1980. The
appellants before us are the Kalyan Municipal CounciExcerpt shown. Read the full judgment & AI analysis in Lexace.