OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY versus CHIEF COMMISSIONER OF INCOME TAX AND ORS.

Citation: [2018] 7 S.C.R. 781 · Decided: 02-07-2018 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Dismissed

Cited by 1 judgment(s) · cites 5 · see the full citation network in Lexace

Judgment (excerpt)

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NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY
v.
CHIEF COMMISSIONER OF INCOME TAX AND ORS.
(Civil Appeal Nos. 792-793 of 2014)
JULY 02, 2018
[A. K. SIKRI AND ASHOK BHUSHAN, JJ.]
Income Tax Act, 1961 – s.10(20) (as Amended by Finance
Act 2002 w.e.f. 01.04.2003) – Appellant-NOIDA, a local authority
or not – Appellant-NOIDA contended that it is covered by the cl(ii)
of Explanation to s.10(20) of the Act, 1961, which defines the
expression “local authority” as “Municipality as referred to in
Art.243P(e)” – Held:  Special features of the Municipality as was
contemplated by the Constitutional provisions contained in Part IXA
cannot be said to be present in Authority (NOIDA) as delineated by
statutory scheme of the U.P. Industrial Area Development Act, 1976
under which the said authority was constituted – Though various
municipal functions are also being performed by the Authority as
per Act of 1976, but merely because certain municipal functions
were also performed by the authority, it cannot acquire the essential
features of the Municipality which are contemplated by Part IXA of
the Constitution – Appellant is not covered by the word/expression
of “Municipality” in cl(e) of Art.243P – Thus, appellant is not
covered by the definition of local authority as contained in
Explanation to s.10(20) of the Act of 1961 – U.P. Industrial Area
Development Act, 1976 – s.3 – Constitution of India – Part IXA,
Art.243P(e) – Finance Act, 2002.
Constitution of India – Arts.243Q and 243P(e) – In exercise
of powers under the proviso to cl(i) of Art.243Q, the Governor
specified NOIDA to be an “industrial township” vide notification
dated 24.12.2001 – Whether industrial township can be equated
with Municipality as defined u/Art.243P(e) – Held: No – The object
of issuance of notification is to relieve the mandatory requirement
of constitution of a Municipality in a State in the circumstances as
mentioned in proviso but exemption from constituting Municipality
does not lead to mean that the industrial establishment which is
[2018] 7 S.C.R. 781
781
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SUPREME COURT REPORTS
[2018] 7 S.C.R.
providing municipal services to an industrial township is same as
Municipality as defined in Art. 243P(e).
General Clauses Act, 1897 – s.3(31) – Applicability of the
Act, 1897 in defining the term ‘local authority’ post amendment
(Finance Act 2002) to the I.T. Act, 1961 – Held: Prior to Finance
Act, 2002 there being no definition of ‘local authority’ under the
I.T. Act, the provisions of s.3(31) of the Act, 1897 were pressed into
service while interpreting the extent and meaning of ‘local authority’
– The Explanation to s.10(20) now contain the exhaustive definition
of local authority, thus, definition of local authority as contained
in s.3(31) of the Act, 1897 no more applicable – Income Tax Act,
1961 – cl(ii) of Explanation to s.10(20) (as Amended by Finance
Act 2002)
Interpretation of Statutes – Interpretation of a proviso –
Principles discussed.
Dismissing the appeals, the Court
HELD: 1. The appellant-New Okhla Industrial
Development Authority has been constituted under section 3 of
the U.P. Industrial Area Development Act, 1976. The only issue
which needs to be considered in these appeals is as to whether
the appellant is a “local authority” within the meaning of section
10(20) as amended by Finance Act, 2002 w.e.f. 01.04.2003. The
cl(ii) of Explanation to s.10(20) of the Income Tax Act, 1961,
provides that the expression “local authority” means
“Municipality as referred to in clause (e) of Article 243P of the
Constitution”. The constitutional provisions as contained in Part
IXA delineate that the Constitution itself provided for constitution
of Municipalities, duration of Municipalities, powers of Authorities
and responsibilities of the Municipalities. The Municipalities are
created as vibrant democratic units of self-government. The
special features of the Municipality as was contemplated by the
constitutional provisions contained in Part IXA cannot be said to
be present in Authority as delineated by statutory scheme of Act,
1976. It is true that various municipal functions are also being
performed by the Authority as per Act, 1976 but the mere facts
that certain municipal functions were also performed by the
authority it cannot acquire the essential features of the
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Municipality which are contemplated by Part IXA of the
Constitution. The appellant is not covered by the word/expression
of “Municipality”

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