MGR INDUSTRIES ASSOCIATION AND ANR. versus STATE OF U.P. AND ORS.

Citation: [2017] 1 S.C.R. 604 · Decided: 03-02-2017 · Supreme Court of India · Bench: RANJAN GOGOI · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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[2017] 1 S.C.R. 604 
MGR INDUSTRIES ASSOCIATION AND ANR. 
v. 
STATE OF U.P. AND ORS. 
(Civil Appeal No. 1362 of2017) 
FEBRUARY 03, 2017 
[RANJAN GOGOi AND ASHOK BHUSHAN,.JJ.] 
Uttar Pradesh Industrial Area Development Act, 1976 - s. 
12-A - Area declared as industrial development area - Exclusion 
fi·om Panchayat area treating the same as Industrial Township -
Zila Panchayat initiated proceedings undr Uttar Pradesh Kshetra 
Panchayat and Zila Panchayat Adhiniyam, 1961, for realizing tax -
The appellants filed writ petition objecting the same on the ground 
that the area since was declared as industrial development area, 
was excluded from Zila Panchayat area u/s. 12-A of 1976 Act and 
thus was ·exempted from the tax - High Court dismissed the 
petition - On appeal, held: Exclusion of industrial development area 
is consequent and dependent upon notification issued under Proviso 
to Clause (1) of Art. 243-Q - Mere declaration of development area 
under 1976 Act is not sufficient to treat an area as an industrial 
Township - In the present case no notification under Proviso to Art. 
243-Q (1) was issued - Therefore, exemption u/s. 12-A of 1976 Act 
was not available to the appellants and hence they were not entitled 
for exemption from tax levied under 1961 Act - Constitution of 
India - Art. 243-A (1) Proviso - Uttar Pradesh Kshetra Panchayat 
and Zila Panchayat Adhiniyam, 1961. 
Dismissing the appeal, the Court 
HELD: 1. Article 243-Q of the Constitution mandates 
constitution ofa municipality in every State, constitution ofNagar 
Panchayat, Municipal Council and Municipal Corporation in every 
State respectively for a transitional area, a smaller urban area 
and a larger urban area respectively. The provisio to Article 243-
Q(l) contemplates a circumstance where a Municipality under 
Article 243-Q(lfmay not be constituted in an urban area or part 
thereof, when such area is specified by a notification having regard 
to the following circumstances: "(i) Having regard to tile size of 
tile area, (ii) Municipal services being provided or proposed to be 
604 
MGR INDUSTRIES ASSOCIATION AND ANR. v. STATE OF 
U.P. AND ORS. 
provided in that area, and (iii) such other factors as may deem fit." 
Thus, exemption from non-constitution of Municipality.-is 
dependent upon consideration of aforesaid factors and a public 
notification thereof. [Para 14] [610-C-F] 
2. Section 12-A ,has been inserted in the Uttar Pradesh 
Industrial Area Development Act, 1976 in consonance with 
proviso to Article 243-Q(l). Section 12-A specifically 
contemplates issuance of notification under proviso to clause (1) 
of Article 243-Q and exclusion from Panchayat ar.ea is consequent 
and dependent upon such notification. Notification under proviso 
to clause (1) of Article 243-Q has to be subsequent to declaration 
of an area as industrial development area, which itself indicates 
that declaratio~ of development area under 1976 Act is not 
sufficient to tr.eat an area as .an industrial township. Industrial 
township as contemplated by, Article 243-Q(l) proviso has to be 
specifically a public· notification after c9nsideration of relevant 
statutory ingredients referred therein. The exclusion of ind_ustrial 
development area from Panchayat has a serious consequence 
since persons residing within the industrial development area. 
are immediately deprived of facilities and benefits extended to. 
them by the respective Panchayats. The deprivation of the said 
benefits ilas to be thus a conscious decisioq)n accordance with 
condition as contained in Article 243-Q. In the present case, it 
has not been pleaded that any notification referable to proviso to 
Article 243(Q)(l) has yet been issued. It was rightly held by the 
High Court that exemptiun under Article 12-A of the 1976.Act 
was not available in the facts of the case. The appellants were not 
entitled for t].te reliefs claimed _in the writ petition. [Paras 15, 11] 
[610-F-G; 611-A-C, E; 613-D] 
Saij Gram Panchayat vs. State of Gujarat and Ors. 1999 
(2) SCC 366 '. 1999 (1) SCR 263 - r.elied on. 
Rishipal & Ors. vs. Staff! of U.P. & Ors. 2006 (i) AWC 
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426 - referred to. 
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1999 (1) SCR 263 
Case Law Reference 
referred to 
relied on 
Para4 
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SUPREME COURT REPORTS· 
[2017] l S.C.R. 
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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1362 
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of2017. 
From the Judgment and Order dated 17.07.2014 of the High Court 
of Judica

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