MUNICIPAL CORPORATION, AMRITSAR versus THE SENIOR SUPERINTENDENT OF POST OFFICES, AMRITSAR DIVISION AND ANOTHER

Citation: [2004] 1 S.C.R. 913 · Decided: 21-01-2004 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Dismissed

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Judgment (excerpt)

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MUNICIPAL CORPORATION, AMRITSAR 
A 
v. 
THE SENIOR SUPERINTENDENT OF POST OFFICES, AMRITSAR 
DIVISION AND ANOTHER 
JANUARY 2I, 2004 
B 
[S.N. VARIAVA AND H.K. SEMA, JJ.] 
Constitution of India, 1950-Article 285(1)--Demand of service charge-
By Municipal Corporation-From Department of Union Government-Demand c 
made on the hasis of circulars issued by Union Government-No provision 
under Municipal Corporation Act for levying service charges-Propriety of 
demand-Held: The demand is violative of Article 285(/)--The Corporation 
was demanding tax in the garb of service charge-The circulars issued by 
Union Government being administrative in nature cannot override constitutional 
provision. 
D 
"' 
Appellant-Corporation issued notices to the respondent-Department 
~ 
for payment of service charges for providing various services to the 
buildings of the department falling within the limits of the Corporation. 
Respondents did not make the payment on the ground that they being the 
E 
Department of Central Government, the properties owned by them were 
exempt from all taxes. Ultimately the Corporation made demand notice 
which was based on letters/circulars issued by Government of India. 
Aggrieved by the notice, respondents approached High Court which set 
aside the notice and held that the demand of the service charges made by 
the Corporation was violative of Article 285 of the Constitution of India. F 
In appeal to this Court, appellant-Corporation contended that it was 
entitled for service charges in view of the Circulars issued by Government 
of India. 
Dismissing the appeal, the Court 
G 
" 
HELD: I. It cannot be said that the Corporation was entitled for 
payment of service charges in view of the Circulars issued by the 
Government of India. The Circulars, were administrative in nature. The 
Government of India Circular was issued by one Deputy Secretary to the H 
913 
914 
SUPREME COURT REPORTS 
(2004] 1 S.C.R. 
A Government of India. By no stretch of imagination such Circulars, issued 
by the Deputy Secretary to the Government of India, can be said to have 
any overriding effect over the mandate of Article 285(1) of the 
Constitution. The Circulars so issued, do not alter the position with regard 
to the bar imposed by Article 285(1) of the Constitution. 
B 
(917-G; 918-A-B] 
2. There is no provision in the Municipal Corporation Act for levying 
service charges. The only provision is by way of tax. Undisputedly, the 
appellant-Corporation is collecting the tax from general public for water 
supply, street lighting, approach roads etc. Thus, the "tax" was sought to 
C be imposed in the garb of "service charges". The interplay of the 
constitutional and legal provisions being well cut and well defined, it was 
clearly not within the competence of the Corporation to impose tax on 
the property of the Union of India, the same being violative of Article 
285(1) of the Constitution. (918-D-E( 
D 
Union of India v. Purna Municipal Corporation and Ors.; [1992] 1 SCC 
100 and Union of India and Anr. v. Rancni Municipal Corporation and Ors .. , 
(1996) 7 sec 542, relied on. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6532 of 
E 2002. 
From the Judgment and Order dated 17.7.2001 of the Punjab and 
Haryana High Court in C.W.P. No. 16030 of 2000. 
Mahabir Singh, Rakesh Dahiya and Nikhil Jain for the Appellant. 
F 
Ashok K. Srivastava, Ms. Indra Sawhney, S.N. Terdol and P. 
Parmeswaran for the Respondents. 
The Judgment of the Court was delivered by 
SEMA, J. This appeal, preferred by the Municipal Corporation, Amritsar 
G is against the judgment of the High Court dated 17th July, 2001, allowing the 
writ petition, filed by the respondents herein. 
The appeal arises out of the following facts: 
The Posts and Telegraphs Department has nine buildings within the 
H limits of Amritsar Municipal Corporation (hereinafter referred to as 'the 
) 
' 
t( 
MUNICIPAL CORPN., AMRITSAR,, SR. SUPDT. OF P.O., AMRITSAR DIV. [SEMA, J.J9 I 5 
Corporation'). The appellant Corporation had issued notices to the respondents A 
for payment of service charges for providing various services like water 
supply, street lighting, drainage and approach roads to the land and buildings 
in the municipal area. However, the respondents did not make any payment 
contending that the respondent-Department, being of Central Government, 
the properties owned by them are exempt from all taxes. Several demand 
notices, without any result, culminated in the 

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