M/S. WELSPUN PROJECTS LTD. (FORMERLY KNOWN AS M/S. MSK PROJECTS INDIA LTD.) versus DIRECTOR, STATE TRANSPORT, PUNJAB AND ANR.

Citation: [2016] 8 S.C.R. 410 · Decided: 08-11-2016 · Supreme Court of India · Bench: ANIL R. DAVE · Disposal: Appeal(s) allowed
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Judgment (excerpt)

(2016] 8 S.C.R. 410 
A 
MIS. WELSPUN PROJECTS LTD. 
B 
c 
(FORMERLY KNOWN AS M/S. MSK PROJECTS INDIA LTD.) 
v. 
DIRECTOR, STATE TRANSPORT, PUNJAB AND ANR. 
(Civil Appeal Nos. 4944-4945 of2016) 
NOVEMBER 08, 2016 
[ANIL R. DAVE, R.K. AGRAWAL AND 
L. NAGESWARA RAO, JJ.] 
Punjab Municipal Corporation Act, 1978 - ss.2(35), 97(2) 
and 157 - House tax assessment - Notice to appellant-company -
Company informed that it was not the owner of the premises in 
question since it was only handling the project of State Transport 
Depart111ent on B. 0. T basis (Build, Operate and Transfer basis) -
State Transport Authorities informed that the co111pany was liable to 
D pay the tax - 'Funjab lnji·astructure Regulatory Authority held that 
State 1l·amport Authorities were liable to pay the tax - High Court, 
in appeal, held that the liability ll'as on the Company - On appeal, 
held: The rights and obligations between the Transport Authority 
and the Company are governed by 'Co11cessio11 agreements' between 
E 
them and Lease Deeds - As per the Lease Deeds, the Company iras 
not liable to pay any fees, rent, tax or any other charge in respect 
of the premises except lease rental of Rs. 1 - Even if the company as 
a tenant is liable uls. 2(35) rlw s.97(2), yet in view of s. 157(1), the 
Government is e111powered to exempt such tax - Thus the company 
not liable to pay any house tax under the Act. 
F 
Allowing the appeals, the Court 
HELD: 1. The inter-se relationship between the parties and 
all the relative rights and obligations are entirely governed by 
the Concession Agreements and the Lease Deeds. From a perusal 
of Clauses 6 and 13(e) of the lease deeds, the appellant-Company 
G was required to pay rent of Re. 1 only as lease rental and further 
the Government has specifically mentioned that except the lease 
rental, it shall not levy any fees, rent, tax or any other charge on 
the lessee for the lease of the demised premises. [Paras 7 and 
13)(415-B; 417-B) 
H 
410 
MIS. WELSPUN PROJECTS LTD. v. DIRECTOR, STATE 
411 
TRANSPORT PUNJAB AND ANR. 
2. Even though under the provisions of Section 2(35) read 
A 
with s.97(2) of the Punjab Municipal Coq>0ration Act, 1976 
normally the tenant who has been given land on lease for a term 
exceeding 1 (one) year is primarily liable to pay taxes on lands 
and buildings yet in view of the provisions of Section 157(1) of 
the Act, the Government is empowered to exempt in whole or in 
8 
part from the payment of any such tax any person or class of 
persons or any property or description of property which in the 
present case has been done on behalf of the Government when 
the lease deeds were executed. [Para 13][417-C-D] 
3. Clause 24.l(a) of the Concession Agreement which deals 
C 
with the local taxation, states that the concession period shall 
include all charges towards import license, toll, customs, duties, 
import duties etc. which is to be payable by the appellant-Company. 
In view of the specific exemption given under the lease-deed 
regarding payment of any taxes on the demised premises, the 
appellant-Company is not at all required to pay any municipal D 
taxes on the demised premises. The house tax was being paid 
by the transport department prior to the signing of the Concession 
Agreement and if it was intended that this burden should be 
passed on to the appellant-Company, a clear clause interpreting 
this point would have certainly been inserted in the Agreement 
itself. Not only this, the Department continued to pay the house 
tax for 3 to 4 years even after the date of the signing of the 
agreement. jPara 1411417-F-H] 
4. The appellant-Company is not liable to pay any house 
tax nnder the Act and the demand and payment of house tax from 
the appellant-Company was without the authority of law and the 
appellant-Company is entitled to the refund of the amount of 
house tax paid by it alongwith rate of interest at the rate of 10% 
p.a. from the date of cleposit.[Para 15)(418-A-B] 
Delhi Golf Club Ltd. and Another v. N.D.M.C., (2001) 
2 SCC 633: 2001 (1) SCR 376 - referred to. 
2001. (1) SCR 376 
Case Law Reference 
referred to 
Paras 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4944-
E 
F 
G 
4945 of2016. 
H 
412 
SUPREME COURT REPORTS 
[2016] 8 S.C.R. 
A 
From the Judgment and Order dated 14.11.2011 of the High Court 
of Punjab and Haryana at Chandigarh in FAQ No. 3372 of 2011 and 
FAO No. 3488of2011. 
Pravin H. Parekh, Sr. Adv, Vishal Prasad, Aditya Sharma, Ms. 
Ritika Sethi
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