WESTERN COALFIELDS LTD. versus SPECIAL AREA DEVELOPMENT AUTHORITY, KORBA AND ANR.

Citation: [1982] 2 S.C.R. 1 · Decided: 26-11-1981 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Dismissed

Cited by 7 judgment(s) · cites 8 · see the full citation network in Lexace

Judgment (excerpt)

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WESTERN COALFIELDS LTD. 
v. 
SPECIAL AREA DEVELOPMENT AUTHORITY, 
KORBA AND ANR. 
November 26, 1981 
(Y.V. CHANDRACHUD, C.J. AND D.A. DESAI, J] 
A 
B 
Madhya Pradesh Nagar Tatha Gram Nivesh Adhlnlyam (23 of 1973), S 69(d), 
C 
Madhya Pradesh Municipalities Act 1961, S. 127A and Madhya Pradesh Municipal 
Carporation Act 1956, Ss. 135, 136. 
Property Tax-Levy of-Whether special Area Development Authority has 
all the powers of taxation which a Municipal Corporation or Municipal Council 
has-Whether incorporation of earlier Act in a later Act or reference to the powers 
conferred by earlier Acts. 
D 
Constitution of India 1950, Act 285(1}, M.P. Municipalities Act 1961, s. 147 
Expln. and M.P. Municipal Corporatian Act 19S6, s. 141-Property tax on leased 
lands-Land owned by State Government-Taken on lease by Company-Entire 
share capital of company subscribed by Central Government-Liability to payment 
of property tax-Whether arises. 
.; 
Coal Mines Nationalisation Act 1973, s. 5, Mines & Mineral (Regulation and. 
Development} Act 1957 s. 2 and M.P. Nagar Tatha Gram Nivesh Adhinlyam 1973, 
s. 69( dl-Power conferred on State Legislature to impose proptrty tax whether In 
conflict with the power lo regu/a te and develop coal mine conferred by Nationalisa-
tion Act. 
The Madhya Pradesh Municipalities Act, 196! by S. 127 (!) (i) empowered 
a municipal council to impose, in the whole or any part of the municipality, "a 
tax payable by the owners of houses, buildings or lands situated within the limits 
of Municipality with reference to annual letting value of the house, building or 
land called property tax". The corresponding provision in the Madhya Pradesh 
Municipal Corporation Act, 1956 was section 132(1)(a), and it provided that "the 
Corporation shall impose a tax payable by the owners of buildings or lands 
situated within the city with reference to the gross annual letting value of the 
building or land called the property tax". The procedure for imposition of taxes 
was spelt out in section 129 of the Municipalities Act and section 133 of the 
Municipal Corporation Act. Section 127 A was ins:rted in the Municipalities 
Act for imposition of property tax and provided by sub-clause (I) that as and 
from the financial year 1976-77 there shall be charged, levied and paid for each 
financial year a tax on the lands or buildings or both situated in a municipality 
at specified rates. Sub-clause (2) exempted properties owned by or vesting in the 
Union Government, State Government or the Council from the levy. Similar 
E 
F 
G 
H 
2 
SUPREME COURT REPORTS 
(1982] 2 s.c.R. 
I\ 
provisions were inse1ted in sections 135 and 136 of the Municipal Corporation 
Act. 
Respondent No. I was constituted the Special Area Development Authority 
under section 65 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam 
(23 of 1973). Clauses (c) and (d) of section 69 of the Act conferred upon the 
Development Authority powers for the purpose of municipal administration and 
(J 
for the purpose of taxation. These clauses were inserted by Ordinance 26 of 
1975 which came into force on February 27, 1976. The Ordinance was replaced 
by the Madhya Pradesh Nagar Tatha Gram Nivesh (Sanshodhan) Adhiniyam 
1976 (6 of 1976). 
c 
D 
E 
F 
G 
H 
I 
On June 24, 1976 respondent I entered into an agreement with the appellant 
company under wh.ich the company agreed to contribute a sum of rupees 3 lakhs 
annually to the "seed capital" of the Authority in consideration of the Authority 
agreeing not to exercise it< power of taxation or of levying any other charges on 
the assets and activities of the company. The agreement was to remain in force 
for a period of ten years beginning from the calendar year 1976 and the annual 
paymen.ts due from 1977 were to be made in January every year. The appellant 
company paid the contribution for the year 1976. In the same year the company 
was called upon by the Sales Tax authorities to pay "the tax on the entry of 
goods" which was introduced by the Madhya Pradesh Sthaniya Kshetra Me Mal 
Ke Pravesh Par Kar Adhyadesh 1976 in substitution of octrpi tax. 
While the 
c·ompany wa5 pursuing that matter with the State Government, contending that 
it was not liable to pay the entry tax by reason of the agreement, on January 4, 
1977 respondent I made a further demand of Rs. 3 lakhs on the company for 
contribution for the year 1977 
That amount .not having been paid as provided 
in the agreement, respondent l terminat

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