LexMUNICIPAL CORPN. OF GREATER MUMBAI versus HARISH LAMBA OF BOMBAY, INDIAN INHABITANT & ORS.
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A B C D E F G H 1006 SUPREME COURT REPORTS [2019] 13 S.C.R. MUNICIPAL CORPN. OF GREATER MUMBAI v. HARISH LAMBA OF BOMBAY, INDIAN INHABITANT & ORS. (Civil Appeal No.142 of 2009) OCTOBER 22, 2019 [A. M. KHANWILKAR AND AJAY RASTOGI, JJ.] Mumbai Municipal Corporation Act, 1888: ss. 139, 140, 141 and 169 – Water tax and water benefit tax – Demand of arrears – Non-payment on the ground that water supply was disconnected – Warrant of attachment – Writ petition – High Court set aside the demand holding that the tax can be levied only in respect of water supplied and consumed by the consumer – Appeal to Supreme Court – Held: Water Tax or Water Benefit Tax is one of the components of Property Tax in terms of ss. 139, 140 and 141 – Liability to pay such tax arises irrespective of disconnection of water supply/water meter, being a compulsory imposition – Such levy is distinct from Water Charges ascribable to s. 169 – The demand is also not barred by limitation – The respondent is liable to pay such tax. Allowing the appeal, the Court HELD: 1.1 The concept of water tax and water benefit tax and that of water charges is qualitatively distinct. By its very nature, the former has been made part of the property tax in terms of Section 140 of the Mumbai Municipal Corporation Act, 1888, in sub-section 1(a) (i) & (ii) thereof. Section 141 permits levy of water tax and water benefit tax concerning prescribed premises. The water benefit tax is determined on prescribed per centum of rateable value of specified premises or its capital value, as the case may be. The levy of water benefit tax being a property tax, however, has been made subject to Section 169 of the Act. [Para 18][1017-G; 1019-F; 1020-D] 1.2 Section 169 is an enabling provision which empowers the standing committee to make rules for supply of water and for [2019] 13 S.C.R. 1006 1006 A B C D E F G H 1007 charging for the supply of water and for any fittings, fixtures or services rendered by the corporation. The extent to which such charges can be levied has been delineated in Section 169 of the Act. This provision envisages levy of charges for the supply of water and further that if such supply materialises, water charges be levied in lieu of a tax (water tax/water benefit tax) prescribed under Section 140 of the Act. Concededly, the primary liability to pay property tax in the form of water benefit tax is co-extensive with meeting the whole or part of the expenditure incurred or to be incurred on capital works for making and improving the facilities of water supply and for maintaining and operating such works, as the case may be in terms of Sections 140 and 141 of the Act. The levy towards property tax fructifies on fulfilment of conditions stipulated therefor in Section 139 read with Sections 140 and 141 of the Act. The extent of such levy is also predicated in Sections 140 and 141 of the Act. It is a compulsory imposition. [Para 19][1021-C-E] 1.3 If it is a compulsory imposition, the fact that the water is de facto utilised by the occupants or the owners of the building becomes insignificant. Water Tax or Water Benefit Tax, in law, is a property tax and described by the legislature as being one of the component of property tax. That becomes payable as soon as the owner/occupant of the premises is in a position to avail of water connection to his premises in the prescribed manner. That liability is inevitable in terms of Section 141 of the Act, even if the water supply/water meter is later on disconnected. [Para 20][1021-F-H] 1.4 However, in case of disconnection of water supply/water meter the corporation cannot recover water charges under Section 169 of the Act. For, the water charges can be recovered commensurate to the quantity of water actually supplied and consumed from the connection of communication pipes or municipal water works to the premises concerned. [Para 21][1022- A-B] 1.5 On a bare perusal of the demand notices issued by the appellant, it is amply clear that the demand is towards property tax in the form of water benefit tax and sewerage benefit tax. It is not a notice for payment of water charges ascribable to Section 169 of the Act as such. [Para 17][1017-F] MUNICIPAL CORPN. OF GREATER MUMBAI v. HARISH LAMBA OF BOMBAY, INDIAN INHABITANT A B C D E F G H 1008 SUPREME COURT REPORTS [2019] 13 S.C.R. 1.6 The High Court misread the impugned demand notices as being under Section 169 of the Act, when in fact the same were for recovery of property tax in the
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