Full Text
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 2 OF 2021
Supriya Rajesh Nair, )
Age : 48 years, Occ : Psychologist, )
Residing at Flat No. 402, Building No.7A, )
Versova Fortune 59, Cooperative Housing Society Limited, )
4th
Floor, Near Lokhandwala Circle, New Mhada Complex, )
Versova, Andheri (East), Mumbai – 400 053 )… Petitioner
JUDGMENT
1. Municipal Corporation of Greater Mumbai, ) Through its Commissioner, Mahapalika Bhavan, ) Opp. CSMT, Mumbai – 400 001. )
2. Assistant Assessor and Collector, ) K/West Ward, Municipal Office Building, ) Paliram Road, Off. S.V. Road, Opp. Andheri Station, ) Andheri (W), Mumbai – 400 058. )
3. State of Maharashtra, ) Through the Secretary, Urban Development Department, ) Mantralaya, Mumbai )… Respondents Mr. Rajesh Datar alongwith Mr. Jayesh Desai and Mr. Akshay Kandarkar i/b M/s. Desai & Desai Associates for the Petitioner Mr. V. Sreedharan, Senior Advocate alongwith Ms. Pallavi Thakar i/b Ms. Aruna Savla for MCGM Mr. Prasad Kulkarni, Ward Inspector, Assessment & Collection Department, K/W Ward, present. CORAM: S.J.KATHAWALLA, & RIYAZ I. CHAGLA, JJ.
RESERVED ON: 8TH JANUARY, 2021 / 19TH APRIL, 2021 PRONOUNCED ON: 30TH JULY, 2021 JUDGMENT ( PER S.J. KATHAWALLA, J.):
┌───────────────────────────────────────────────────────────────────────────── │ │ INDEX │ │ I. OVERVIEW OF CHALLENGE……………………………………….…….03 │ │ II. FACTS………………………………………………………………………..06 │ │ III. ISSUE WHICH ARISE FOR CONSIDERATION……………………….…13 │ │ IV. PROPERTY TAX LEVIED BY MCGM……………………………………..14 │ │ V. LEGISLATIVE PROVISIONS GOVERNING THE LEVY AND │ │ COLLECTION OF THE PROPERTY TAX…………………………………15 │ │ A. CONSTITUTION OF INDIA………………………………………………..15 │ │ B. MUMBAI MUNICIPAL CORPORATION ACT, 1888………...……………17 │ │ C. MAHARASHTRA (URBAN AREA) PRESERVATION OF TREES │ │ ACT, 1975……………………………………………………………………...18 │ │ D. MAHARASHTRA EDUCATION & EMPLOYMENT GUARANTEE CESS │ │ ACT, 1962……………………………………………………………………..19 │ │ E. MAHARASHTRA HOUSING & AREA DEVELOPMENT ACT, 1976…...20 │ │ F. EXEMPTION FROM LEVY & COLLECTION OF PROPERTY TAX…….22 │ │ VI. ORDER DATED 8TH JANUARY, 2021……………………………………..22 │ │ VII. PETITIONER’S SUBMISSIONS……………………………………………23 │ │ VIII. RESPONDENTS’ SUBMISSIONS………………………………………….24 │ │ IX. ANALYSIS OF THE ISSUES THAT ARISE FOR CONSIDERATION IN │ │ THIS PETITION AND THE COURT’S FINDINGS……………………………..26 │ │ ISSUE NO. (I) : WHETHER THE PETITIONER, BEING A WIDOW OF AN EX- │ SERVICEMAN OR WAR WIDOW, IS ENTITLED TO EXEMPTION FROM │ PAYMENT OF ALL FORMS OF PROPERTY TAXES UNDER, INTERALIA, │ THE MMC ACT PURSUANT TO THE STATE GOVERNMENT RESOLUTION │ DATED 5TH APRIL, 2016 READ WITH THE CORRIGENDUM DATED 7TH │ APRIL, 2016…………………………………………………………………………26 │ │ ISSUE NO. (II) : WHETHER THE LETTER DATED 7TH JANUARY, 2021 │ ADDRESSED BY THE DEPUTY SECRETARY, UDD, GOVERNMENT OF │ MAHARASHTRA TO THE ADDITIONAL GOVERNMENT PLEADER CAN │ HAVE ANY BEARING ON THE INTERPRETATION AND APPLICATION OF │ THE GR AND IF SO, TO WHAT EFFECT……………………………………….29 │ │ ISSUE NO. (III) : WHETHER THE STATE GOVERNMENT / MCGM HAS THE │ POWER TO EXEMPT THE LEVY OF PROPERTY TAX UNDER THE MMC │ ACT…………………………………………………………………………………..31 │ │ ISSUE NO. (IV) : IF ISSUE NO. (I) IS ANSWERED IN THE AFFIRMATIVE, │ WHETHER THE STANDING COMMITTEE RESOLUTION DATED 29TH │ JUNE, 2017 CAN HAVE THE EFFECT OF RESTRICTING THE EXEMPTION │ UNDER THE GR ONLY TO ‘GENERAL TAXES’ AS ONE COMPONENT OF │ PROPERTY TAXES…………………………………………………………….…...35 │ │ X. ORDER………………………………………………………………...37 │ │ I. CHALLENGE IN BRIEF : └─────────────────────────────────────────────────────────────────────────────
1. The present Petition has been filed seeking, inter alia, quashing and setting aside of bills dated 4th June, 2016 and 11th September, 2019 issued by the Municipal Corporation of Greater Mumbai (“MCGM”) levying property tax of Rs. 80,241/- for the period 1st April, 2016 to 31st March, 2020 (“Impugned Property Tax Bills”). The property tax is levied in respect of a residential flat at Versova, Andheri (W), Mumbai – 400053 (“the said Flat”).
2. The reliefs sought in the Petition are reproduced below:
3. Briefly stated, the Petitioner submits that she is the widow of a martyred officer of the Indian Army, and as such, is exempt from payment of property tax pursuant to the Government of Maharashtra (Urban Development Department) Resolution dated 5th April, 2016, modified by a Corrigendum dated 7th April, 2016 (the Government Resolution dated 5th April, 2016 and Corrigendum dated 7th April, 2016 are collectively referred to as the “GR”). The Petitioner submits that the exemption applies to all taxes levied as part of ‘property tax’. The Petitioner submits that MCGM / its Standing Committee has misinterpreted and unduly restricted the scope of the GR by its Circular dated 29th September, 2017 and Order / decision dated 29th June, 2017 which limits the scope of the exemption under the GR to ‘General Tax’ or ‘सर्वसाधारण ’ कर which is one of the many constituent taxes within the umbrella of ‘property tax’. The narrowing of the exemption by Respondent No. 1 through the Circular dated 29th September, 2017 and Order / decision dated 29th June, 2017 is similarly under challenge.
4. The Petitioner submits that the GR exempts payment of all forms of property tax and that MCGM has negated the very intent and purpose of the GR by selectively applying it only to ‘General Tax’ or ‘सर्वसाधारण ’ कर. The Petitioner therefore invokes the jurisdiction of this Court under Article 226 of the Constitution of India for quashing and setting aside the levy of property tax of Rs. 80,241/- for the period 1st April, 2016 to 31st March, 2020.
5. The factual aspects of this Writ Petition are not in dispute. Admittedly, the Petitioner is the widow of Major Rajesh Nair who was martyred on 15th November, 2001 while discharging his duties as an officer of the Indian Army. The Petitioner has produced an Eligibility Certificate for claiming exemption from payment of property tax under the GR.
6. The Government of Maharashtra, through its Urban Development Department (“UDD”), issued a Government Resolution dated 5th exempting / waiving the levy and collection of property tax from, inter alia, widows of ex-servicemen (such exemption / waiver being initially limited to one property) levied under the following statutory provisions: i. Section 139 of the Mumbai Municipal Corporation Act, 1882 (“MMC Act”); ii. Section 127 of the Maharashtra Municipal Corporation Act, 1949; and iii. Section 105 of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965
7. The translated copy of the GR dated 5th April, 2016 annexed as Exhibit B to the Petition is reproduced hereunder: Widows of Defence Forces Bravery Medal holders and Ex-servicemen’s Exemption from Property Tax Government of Maharashtra Urban Development Department Government Resolution No.: Above Reference Govt. 2016/ Pr. No. 59/20, Date: 5th April 2016 Government Resolution, Rural Development and Water Conservation Department, no. VPM 2015 / Case No. 140 / Para 5, dated 31.12.2015 Preamble As per Government Notification, Department of Rural Development and Water Conservation, dated 31.12.2015, property tax has been waived for rural area only for one residential building used by the Defence Forces Bravery Medal or Service holder and such widows or dependents. Various associations of ex-servicemen have called for exemption from payment of property taxes. The government was considering waiving property tax of exservicemen in the area of civic self-government. G.R.: Under Section 139 of the Mumbai Municipal Corporation Act, BMC, under Section 127 of the Maharashtra Municipal Corporation Act, Municipal Corporations and Maharashtra Municipal Councils, Nagar Panchayats and Municipal Councils under Section 105 of the Industrial Towns Act, 1965 levy property tax. The government has decided to give exemption for one property from property tax payment to property holders and widows of ex-servicemen for their outstanding performance in selfless defence of the country, risking their lives for the country and living in the area of civic self-government. A person eligible for such tax exemption is required to submit a certificate from the District Army Welfare Officer. […]
8. The GR therefore notes that the exemption / waiver is in recognition of the outstanding performance of officers who risked their lives in the defence of the country. The waiver initially applied to only one property owned by the widow of the ex-serviceman.
9. The UDD issued a Corrigendum dated 7th April, 2016 amending the GR. The said Corrigendum provides that the exemption / waiver would apply to all properties owned by widows of ex-servicemen and is not limited to one property. The translated copy of the Corrigendum dated 7th April, 2016 annexed as Exhibit C to the Petition is reproduced hereunder: Widows of Defence Forces Bravery Medal holders and Ex-servicemen’s Exemption from Property Tax Government of Maharashtra Urban Development Department Government Corrigendum No.: Above Reference Govt. 2016/Pr. No. 59, Date: 7th April 2016 Read: Govt. Devision, Urban Development Department No.: Sankirna-2016/Q.No. 59/ Nov-20, Dt. 05.04.2016 Corrigendum: - […] In the line 7 of paragraph 1 of 05.04.2016 reads “Widows of ex-servicemen have been exempted from property tax on one property in their name” instead of “It has been decided to exempt widows of ex-servicemen from property tax in respect of properties in their name” […]
10. In the present case, Respondent No. 1 issued a Bill dated 4th June, 2016 under Section 200 of the MMC Act[1] towards property tax for the period 1st April, 2016 to 31st March, 2017. The Bill dated 4th June, 2016 provides a breakup of the property tax levied under the following categories: i. सर्वसाधारण कर or General Tax ii. जललाभ कर or Water Benefit Tax iii. मलनि:सारण कर or Sewerage Tax iv. मलनि:सारणलाभ कर or Sewerage Benefit Tax v. म..पा. शि क्षण उपकर or Education Cess vi. राज्य शि क्षण उपकर or State Education Cess vii. र्वृक्ष उपकर or Tree Cess
11. The Standing Committee of MCGM passed a Resolution dated 29th June, 2017. A copy of this Resolution is not placed on record. An excerpt from the Resolution dated 29th June, 2017 passed by the Standing Committee of MCGM is 1 200. (1) When any property tax or instalment of any such tax, or shall have become due, the Commissioner shall, with the least practicable delay, cause to be served upon the person liable for the payment thereof a bill for the sum due. (2) Every such bill shall specify the period for which, and the premises, dog in respect of which, the tax is charged and shall also give notice of the time within which appeal may be preferred, as hereinafter provided against such tax. extracted in the Written Submissions dated 15th January, 2021 filed by MCGM at Paragraph 1.2. The Resolution dated 29th June, 2017, as extracted in MCGM’s Written Submission, reads as follows: “100% tax exemption on property of one of the property to the holders of gallantry medals of Defence Force and 100% tax exemption in general tax on property of widows of ex-servicemen in their name” This Resolution is, inter alia, the subject matter of challenge in this Petition as per the relief sought in prayer clause 25(a)(iii) of the Petition.
12. Respondent No. 1 also issued a Circular dated 29th September, 2017 under Section 520C of the MMC Act. This Circular is, inter alia, the subject matter of challenge in this Petition as per the relief sought in prayer clause 25(a)(iii) of the Petition. This Circular reiterates the Resolution of 29th June, 2017 inasmuch as it indicates that the 100% exemption is afforded by the MCGM to the ‘General Tax’ component of Property Tax. It also stipulates other terms and conditions for availing the exemption by the widow of an ex-servicemen. The fulfilment of the other terms and conditions for availing of the benefit by the Petitioner does not appear to be in dispute in this Writ Petition.
13. Respondent No. 2 addressed a ‘FINAL 48 HOURS NOTICE’ dated 14th January, 2019 calling upon the Petitioner to pay property tax of Rs. 76,848/- failing which action under the MMC Act would be initiated.
14. The Petitioner addressed a letter / representation dated 31st January, 2019 to Respondent No. 2 stating that she is a war widow and therefore exempt from payment of property tax pursuant to the GR. The Petitioner requested MCGM to revise and adjust the bills keeping in mind the said exemption.
15. Respondent No. 1 then issued, what the Petitioner describes as, an order dated 6th June, 2019 in furtherance of the Standing Committee Resolution dated 29th June, 2017. This Order is, inter alia, the subject matter of challenge in this Petition as per the relief sought in prayer clause 25(a)(iii) of the Petition. Although the Order of 6th June, 2019 was not annexed to the Petition or produced with the Reply, the same was subsequently made available to the Court in April, 2021. The Court was informed that the Order of 6th June, 2019 is essentially the last paragraph of the document that appears to be a Circular dated 14th March, 2019. This document or Order does not really carry the matter any further as it seeks to set out the procedural form or manner in which the application for exemption is to be claimed and processed. It also reiterates that the exemption is restricted to the ‘General Tax’ component of ‘Property Tax’. The last paragraph only deals with a claim of refund, with which we are not concerned.
16. By a letter dated 1st October, 2020, Respondent No. 2 informed the Petitioner that with respect to the GR, the Standing Committee of MCGM has accorded its sanction dated 29th June, 2017 to the proposal made by the Tax Assessment and Tax Collection Department of MCGM to grant 100% property tax exemption to persons holding bravery medals and 100% General Tax exemption to war widows. It was communicated that the said exemption will be granted with effect from 29th June, 2017 and revised bills were enclosed with this letter.
17. Sometime in November 2020, the Petitioner received an undated Demand Notice from Respondent No. 2 for payment of Rs. 80,241/- towards property tax. A perusal of the bills raised by MCGM demonstrates that: i. MCGM has not granted any exemption of any kind to the Petitioner for the period 1st April, 2016 to 30 September 2017; ii. For the period 1st October, 2017 to 31st March, 2020 MCGM has exempted the Petitioner from payment of General Tax or ‘सर्वसाधारण ’ कर, however, no exemption is granted with respect to payment of the following taxes levied as property tax: a. Water Benefit Tax (जललाभ कर); b. Sewage Benefit Tax (मलनि:सारणलाभ कर); c. Education Cess (म..पा. शि क्षण उपकर); d. State Education Cess (राज्य शि क्षण उपकर); e. Tree Cess (र्वृक्ष उपकर); and f. Street / Road Tax (पथ कर).
18. The Petitioner addressed email representations on 29th November, 2020 and 6th December, 2020 seeking exemption from all heads of property tax, and not just ‘General Tax’ or ‘सर्वसाधारण ’ कर. Having failed to receive any favourable response, the Petitioner has filed the present Writ Petition on 17th December, 2020.
19. A letter dated 7th January, 2021 addressed by the Deputy Secretary, Government of Maharashtra (UDD) to the Additional Government Pleader is placed on record of this Court. The letter dated 7th January, 2021 is addressed by the Deputy Secretary, Government of Maharashtra (UDD) in response to the Additional Government Pleader’s communication of 6th January, 2021. It is therefore a solicited response and is issued as instructions for the purposes of this litigation. The letter dated 7th January, 2021 is reproduced below: “Respected Madam In respect of your aforesaid reference letter dated 06.01.2021 on the above subject. As per Government Resolution dated 05.04.2016 and 07.04.2016, widows of exservicemen and Behaviour [sic.] Award Winners have been exempted from Property Tax. Property Taxes include water tax, water benefit tax, sewerage tax, sewerage benefit tax, general tax, education cess, street tax and betterment tax. However, as per aforesaid Government Resolutions, only general tax is exempted from property tax by Urban Local Bodies. Yours Sincerely Sd/- Shankar T. Jadhav Deputy Secretary Government of Maharashtra” It is clear from the context of the letter that the word behaviour must be read as bravery.
ISSUES WHICH ARISE FOR CONSIDERATION
20. Based on the aforesaid facts, the following issues arise for consideration in this Writ Petition: i. Whether the Petitioner, being a widow of an ex-serviceman or war widow, is entitled to exemption from payment of all forms of property taxes under, inter alia, the MMC Act pursuant to the State Government Resolution dated 5th April, 2016 read with the Corrigendum dated 7th April, 2016; ii. Whether the letter dated 7th January, 2021 addressed by the Deputy Secretary, UDD, Government of Maharashtra to the Additional Government Pleader can have any bearing on the interpretation and application of the GR and if so, to what effect. iii. Whether the State Government / MCGM has the power to exempt the levy of property tax under the MMC Act; iv. If issue No.
(i) is answered in the affirmative, whether the Standing Committee Resolution dated 29th June, 2017 can have the effect of restricting the exemption under the GR only to ‘General Taxes’ as one component of property taxes.
PROPERTY TAX LEVIED BY MCGM
21. The property tax levied by Respondent No. 1 for the period 1st April, 2016 to 31st March, 2020 impugned in this Writ Petition is summarised below: Period Amount Bill Date / Reference 1st April, 2016 to 30th September, 2016 Rs. 12,808/- 4th June, 2016 / Exhibit A at Page No. 22. 1st October, 2016 to 31st March, 2017 Rs. 12,808/- 1st April, 2017 to 30th September, 2017 Rs. 10,765/- 11th September, 2019 / Exhibit J at Page Nos. 38 to 40. 1st October, 2017 to 31st March, 2018 Rs. 8,772/- 1st April, 2018 to 30th September, 2018 Rs. 8,772/- 1st October, 2018 to 31 March, 2019 Rs. 8,772/- 1st April, 2019 to 30th September, 2019 Rs. 8,772/- 1st October, 2019 to 31st March, 2020 Rs. 8,772/- Total Rs. 80,241/-
V. LEGISLATIVE PROVISIONS GOVERNING THE LEVY AND
COLLECTION OF PROPERTY TAX
A. CONSTITUTION OF INDIA
22. Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. Article 246 of the Constitution read with the Seventh Schedule to the Constitution define the legislative competence of Parliament and State Legislatures to enact laws, including taxation statutes.
23. The term ‘property tax’ is not found in any of the lists prescribed under the Seventh Schedule to the Constitution. However, it is clear from a perusal of, inter alia, Section 139 and Section 139A of the MMC Act that the levy of property tax relates to the exclusive prerogative of State Legislatures to enact laws with respect to ‘Taxes on lands and buildings’ under Article 246(3) of the Constitution read with Entry 49 of List II of the Seventh Schedule to the Constitution.
24. Article 243X of the Constitution provides for the levy and collection of taxes by municipalities if so authorised by State Legislatures. Article 243X of the Constitution reads as follows: “243X. Power to impose taxes by, and Funds of, the Municipalities.—The Legislature of a State may, by law,— (a) authorise a Municipality to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits; (b) assign to a Municipality such taxes, duties, tolls and fees levied and collected by the State Government for such purposes and subject to such conditions and limits;
(c) provide for making such grants-in-aid to the Municipalities from the Consolidated Fund of the State; and
(d) provide for constitution of such Funds for crediting all moneys received, respectively, by or on behalf of the Municipalities and also for the withdrawal of such moneys therefrom, as may be specified in the law.”
25. Property tax is levied in Maharashtra through Municipal Councils and Municipal Corporations under the provisions of the following State Legislature enacted legislations: i. Mumbai Municipal Corporation Act, 1888 (Section 139 read with ii. Maharashtra Municipal Corporation Act, 1949 (Section 127 read with iii. Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 (Section 105); iv. Maharashtra (Urban Area) Preservation of Trees Act, 1975 (Section 18); v. Maharashtra Education & Employment Guarantee Cess Act, 1962 (Sections 4, 6A and 6B); and vi. Maharashtra Housing and Area Development Act, 1976
26. The present matter concerns the levy of property tax in Brihan Mumbai by the MCGM under the provisions of the Mumbai Municipal Corporation Act, 1888; the Maharashtra (Urban Area) Preservation of Trees Act, 1975 (which governs the levy of Tree Cess) and the Maharashtra Education & Employment Guarantee Cess Act, 1962 (which governs the levy of Education Cess and Employment Guarantee Cess).
B. MUMBAI MUNICIPAL CORPORATION ACT, 1888
27. Chapter VIII of the MMC Act is titled ‘Municipal Taxation’. Section 139 of the MMC Act lists out the taxes to be imposed under the MMC Act and reads as under:
28. Section 139A of the MMC Act provides that ‘property tax’ is levied as a tax on ‘buildings and lands’ and consists of (i) water tax, (ii) water benefit tax, (iii) sewerage tax, (iv) sewerage benefit tax, (v) general tax, (vi) education cess, (vii) street tax and (viii) betterment charges. “139A. (1) Property taxes leviable on buildings and lands in Brihan Mumbai under this Act shall include water tax, water benefit tax, sewerage tax, sewerage benefit tax, general tax, education cess, street tax and betterment charges. […]”
C. MAHARASHTRA (URBAN AREA)
PRESERVATION OF TREES
29. In addition to the taxes levied as property tax under Section 139A of the MMC Act, it is to be noted that र्वृक्ष उपकर or Tree Cess is levied as property tax under Sections 18(1) and 18(2) of Maharashtra (Urban Area) Preservation of Trees Act,
1975.
D. MAHARASHTRA EDUCATION AND EMPLOYMENT
GUARANTEE CESS ACT, 1962
30. State Education Cess and Employment Guarantee Cess are also levied as per the provisions of Maharashtra Education & Employment Guarantee Cess Act, 1962 and recovered as property taxes. Sections 4 and 6A of the Maharashtra Education & Employment Guarantee Cess Act, 1962 reads as follows:
E. MAHARASHTRA HOUSING AND AREA DEVELOPMENT ACT,
31. Repair Cess is levied as per the provisions of the Maharashtra Housing and Area Development Act, 1976 and recovered as property taxes. Section 82 of the Maharashtra Housing and Area Development Act, 1976 reads as follows:
32. Therefore, it appears that property tax i.e. a tax on lands and buildings is levied in the State of Maharashtra through several State Legislations and property tax includes, on a combined reading of the aforesaid legislations, the following taxes: i. Water Tax; ii. Water Benefit Tax; iii. Sewerage Tax; iv. Sewerage Benefit Tax; v. General Tax; vi. Education Cess; vii. Street Tax; viii. Betterment Charges; ix. Tree Cess; x. Employment Guarantee Cess; and xi. Repairs Cess
33. Property Tax levied under the MMC Act includes the following taxes within its ambit: i. Water Tax; ii. Water Benefit Tax; iii. Sewerage Tax; iv. Sewerage Benefit Tax; v. General Tax; vi. Education Cess; vii. Street Tax; and viii. Betterment Charges.
F. EXEMPTION FROM LEVY AND COLLECTION OF PROPERTY
34. Section 144A of the MMC Act empowers the State Government and the MCGM to grant a concession in payment of property tax under any socially or ecologically beneficial scheme. Section 144A of the MMC Act reads as under: “144A. Notwithstanding anything contained in this Act, a concession in payment of property tax in respect of building and land, wherein any such socially or ecologically beneficial scheme, as may be identified for the purposes of this section by the Municipal Corporation or the State Government, is being implemented, may be given to such extent of so many per centum of the property tax payable in respect thereof as the Corporation may, determine. Explanation.—For the purposes of this section, “ecologically beneficial scheme” includes rain water harvesting system, vermi composting, use of solar energy and other non-conventional sources of energy, recycling and reuse of waste water, or any scheme for promoting environment friendly and ecologically beneficial building construction or the like as the Corporation or the State Government may identify.”
ORDER DATED 8TH JANUARY, 2021
35. The Petitioner sought leave to amend the Petition to challenge the Resolutions / decisions / orders passed by the MCGM or its Standing Committee which limit the scope of the exemption available to war widows to General Taxes forming part of Property Tax. This Court passed the following Order: “P.C.:-
1. Amendments are taken on record and marked ‘X’ for identification. Amendments to be carried out in the course of the day. Reverifcation is dispensed with.
2. Since the facts in the matter are undisputed the Corporation has not filed any Affidavit. Hearing of the matter has commenced and is concluded. Parties to file their written submissions by 15th January, 2021. Upon receipt of the submissions the matter shall stand closed for orders.”
36. The Petitioner filed Written Submissions dated 14th January, 2021 and MCGM filed Written Submissions dated 15th January, 2021. Further documents and translations were filed in March / April, 2021.
VII. PETITIONER’S SUBMISSIONS
37. The Petitioner submits:
37.1. That a composite reading of Sections 139, 139A and Section 140 of the MMC Act show that property tax is a composite tax comprising of various taxes levied under the head of property tax in accordance with the provisions of the MMC Act.
37.2. That a plain reading of the GR demonstrates that the exemption granted to war widows relates to the composite levy of property tax which includes all its constituent taxes. Therefore, the exemption is not limited to ‘General Tax’ but applies to all taxes levied as property taxes under the MMC Act.
37.3. That the resolution passed by the Standing Committee of MCGM to limit the exemption to ‘General Tax’ for war widows is ex-facie illegal and defeats the laudable object underlying the issuance of the GR.
37.4. That Section 520C of the MMC Act demonstrates that the State Government has powers to issue directions to the MCGM on matters of policy and therefore resolutions passed by MCGM cannot limit or otherwise operate in conflict with GRs issued by the State Government.
37.5. That the Standing Committee Resolutions purports to be issued under Section 520C of the MMC Act i.e. it purports to be in furtherance of the GR issued by the State Government. As such, the Resolution passed by the Standing Committee of MCGM cannot limit or operate in conflict with the GR which contemplate a composite exemption from payment of all forms of property taxes.
37.6. That the decision taken by the Standing Committee of MCGM is violative of Article 14 of the Constitution of India.
VIII. RESPONDENT’S SUBMISSIONS
38. MCGM’s submissions are as follows:
38.1. That the exemption from payment of property taxes under the GR issued by the Government of Maharashtra apply equally to holders of gallantry medals of Defence Forces and widows of ex-servicemen and is in identical terms for both these two categories. However, the Standing Committee of MCGM has approved 100% property tax exemption for holders of gallantry medals of Defence Forces whereas the exemption for widows of ex-servicemen is limited to 100% of General Tax forming part of Property Tax.
38.2. That each levy under the umbrella of Property Tax relates to a specific purpose, as provided for in the statute namely the MMC Act. For example, the monies collected towards water tax, water benefit tax, sewerage tax and sewerage benefit tax are to be used for expenses under Chapter X i.e. water supply and Chapter IX i.e. drains and drainage works respectively. Essentially, although termed as taxes, certain levies such as Water Tax, Water Benefit Tax, Sewerage Tax and Sewerage Benefit Tax are actually in the nature of charges for services rendered in the form of supply of water and drainage facilities etc. and is therefore required to be collected by the Municipal Corporation in order to fulfil specific civic obligations to the tax payer. Viewed as such, it may be possible to read the scope of the exemption in the GR to be limited to General Tax only (which does not relate to any specific quid pro quo) and not to other heads of taxes which are truly in the nature of charges for services rendered by the municipality to the tax payer.
38.3. That there is no specific power conferred upon the Corporation or the Commissioner or the State Government under the MMC Act to exempt payment of property tax. This must be seen in contrast with other provisions of the MMC Act which confer power on the Municipal Commissioner to exempt articles from the levy of octroi. Section 144A of the MMC Act titled ‘Concession in payment of property tax’ is not relevant in the present matter as it contemplates concessions with respect to socially and ecologically beneficial schemes which the Explanation to Section 144A clarifies to mean “rain water harvesting system, vermi composting, use of solar energy and other non-conventional sources of energy, recycling and reuse of waste water, or any scheme for promoting environment friendly and ecologically beneficial building construction or the like as the Corporation or the State Government may identify”.
38.4. That it would be up to this Court to consider whether the GR can be read as directions or instructions issued by the State Government to the Corporation under Section 520C of the MMC Act.
ANALYSIS OF THE ISSUES THAT ARISE FOR CONSIDERATION
IN THIS PETITION AND THE COURT’S FINDINGS Issue No. (I): Whether the Petitioner, being a widow of an ex-serviceman or war widow, is entitled to exemption from payment of all forms of property taxes under, inter alia, the MMC Act pursuant to the State Government Resolution dated 5th April, 2016 read with the Corrigendum dated 7th
39. The operative part of the GR is reproduced below: G.R.: Under Section 139 of the Mumbai Municipal Corporation Act, BMC, under Section 127 of the Maharashtra Municipal Corporation Act, Municipal Corporations and Maharashtra Municipal Councils, Nagar Panchayats and Municipal Councils under Section 105 of the Industrial Towns Act, 1965 levy property tax. The government has decided to give exemption for one property from property tax payment to property holders and widows of ex-servicemen for their outstanding performance in selfless defence of the country, risking their lives for the country and living in the area of civic self-government. A person eligble for such tax exemption is required to submit a certificate from the District Army Welfare Officer. […]
40. The operative part of the GR begins by making a reference to, inter alia, Section 139 of the MMC Act under which property tax is levied. It then states that the State Government has decided to grant an exemption to widows of ex-servicemen from payment of property tax for one property. This restriction of one property has, as noted above, been subsequently done away with by way of the Corrigendum dated 7 April 2016.
41. The plain language and import of the GR is to exempt widows of exservicemen from payment of property tax under, inter alia, the MMC Act. Clearly, the exemption provided for by the GR is in no way restricted to any particular component of property tax which are identified in Section 139A of the MMC Act. The GR must therefore be understood as exempting property tax as a whole under Sections 139 and 139A of the MMC Act.
42. Apart from the components of property tax which are levied under the charging sections of the MMC Act, there are other components of property tax which are levied under distinct state legislations each of which may contain their own charging sections. Those state legislations are referred to above and include, for example, the Maharashtra (Urban Area) Preservation of Trees Act, 1975 under which Tree Cess is levied as property tax. Such legislation may mention that a particular cess is to be levied as property tax and this component is therefore to be found in the property tax bill raised by MCGM upon an assessee. That, however, does not make that component or a component which has its origin in a charging section outside the MMC Act, property tax under Section 139 of the MMC Act.
43. Since the GR expressly refers to the charging sections of three state legislations namely: i. Section 139 of the MMC Act; ii. Section 127 of the Maharashtra Municipal Corporation Act, 1949; and iii. Section 105 of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 in respect of which exemptions are being granted, it would not be possible to extend the exemption in the GR to the levy of property tax under legislations and charging sections that do not find mention in the operative and relevant portion of the GR. The grant of an exemption is entirely for the State Government to determine and therefore the role of this Court under Article 226 is merely to give effect to it on its true and proper interpretation.
44. In other words, and in answering Issue No.
(i) as framed by us above, we are of the opinion that the issue must be answered in the affirmative with a clarification that the exemption under the GR does not extend to the levy of tax or cess that form a part of ‘property tax’ by way of charging sections in legislations other than those mentioned in the GR itself. The effect of this in the context of the Impugned Property Tax Bills is that the Petitioner would not be exempt from paying the component of Tree Cess. Issue No. (II): Whether the letter dated 7th January, 2021 addressed by the Deputy Secretary, UDD, Government of Maharashtra to the Additional Government Pleader can have any bearing on the interpretation and application of the GR and if so, to what effect
45. By a letter dated 7th January, 2021 addressed by the Deputy Secretary, Government of Maharashtra (UDD) to the Additional Government Pleader, instructions are given on behalf of the UDD to the Office of the Additional Government Pleader that whilst the GR exempts payment of property tax (and the letter specifically acknowledges that property tax includes water tax, water benefit tax, sewerage tax, sewerage benefit tax, general tax, education cess, street tax and betterment tax), nevertheless, only general tax is exempted under the GR. It is pertinent to once again reproduce this letter in its entirety: “Respected Madam In respect of your aforesaid reference letter dated 06.01.2021 on the above subject. As per Government Resolution dated 05.04.2016 and 07.04.2016, widows of exservicemen and Behaviour [sic.] Award Winners have been exempted from Property Tax. Property Taxes include water tax, water benefit tax, sewerage tax, sewerage benefit tax, general tax, education cess, street tax and betterment tax. However, as per aforesaid Government Resolutions, only general tax is exempted from property tax by Urban Local Bodies. Yours Sincerely Sd/- Shankar T. Jadhav Deputy Secretary Government of Maharashtra”
46. In our view, a correspondence between the UDD and its advocate cannot be read as an aid to interpretation of a Government Resolution, especially when its plain meaning is clear. Even otherwise, not only does the 7th January, 2021 letter acknowledge that the exemption under the GR is applicable to property tax (which includes water tax, water benefit tax, sewerage tax, sewerage benefit tax, general tax, education cess, street tax and betterment tax) it does not provide any reasons why the GR must be read down or interpreted to mean an exemption of only the General Tax component of property tax. Nothing is placed on record by the Government of Maharashtra such as provisions under its Rules of Business or any other material which demonstrates that the Deputy Secretary, UDD is competent to alter or restrict the scope of the GR issued by the Government of Maharashtra through the UDD.
47. It is also clear that this letter is written in response to the AGP’s communication of 6th January, 2021 (which is not placed on record). It is therefore a solicited response and is no more than instructions for the purposes of this litigation. It is certainly not a reflection as to how the State Government may have contemporaneously understood the GR which was issued by it as far back as on 5th April, 2016.
48. We therefore answer issue No.
(ii) in the negative and are of the view that this letter is completely irrelevant for the interpretation and application of the GR. Issue No. (III): Whether the State Government / MCGM has the power to exempt the levy of property tax under the MMC Act
49. Respondent No. 1 contends that the exemption itself from the levy of property tax under the MMC Act is without authority of law. Ex-facie, this is an extraordinary submission considering that there is a GR issued by the State Government and importantly, a Standing Committee Resolution of the Respondent No. 1 itself exempting ‘general taxes’ which is a part of property tax. If Respondent No. 1 is now questioning the authority as submitted in Paragraph 5 of its Written Submissions, it would certainly have to explain how the GR and the Standing Committee Resolution came to be issued or passed in the first place.
50. Whilst the conduct of Respondent No. 1 is relevant to note, we do not propose to answer this issue only on its conduct, or for that matter, the action of the State Government in issuing the GR.
51. In our view, the authority of law to exempt the payment of property taxes under the GR is traceable to Sections 144A of the MMC Act read with Section 520C of the MMC Act. For convenience, these provisions are set out below: “144A. Notwithstanding anything contained in this Act, a concession in payment of property tax in respect of building and land, wherein any such socially or ecologically beneficial scheme, as may be identified for the purposes of this section by the Municipal Corporation or the State Government, is being implemented, may be given to such extent of so many per centum of the property tax payable in respect thereof as the Corporation may, determine. Explanation.—For the purposes of this section, “ecologically beneficial scheme” includes rain water harvesting system, vermi composting, use of solar energy and other non-conventional sources of energy, recycling and reuse of waste water, or any scheme for promoting environment friendly and ecologically beneficial building construction or the like as the Corporation or the State Government may identify. * * * * * 520C. Notwithstanding anything contained in this Act, the State Government may issue to the Corporation general instructions as to matters of policy to be followed by the Corporation in respect of its duties and functions, and in particular it may issue directions in the larger public interest or for implementation of the policies of the Central Government or the State Government and the National or the State level programmes, projects and schemes. Upon the issue of such instructions or directions, it shall be the duty of the Corporation to give effect to such instruction or directions: Provided that, the State Government shall, before issuing any instructions or directions under this section, give an opportunity to the Corporation to make representation within fifteen days as to why such instructions or directions shall not be issued. If the Corporation fails to represent within fifteen days or, after having represented, the State Government, on considering the representation, is of the opinion that issuing of such instructions or directions is necessary, the State Government may issue the same.”
52. Our findings in respect of the interpretation and application of these Sections is as follows: i. Significantly, both these provisions are non-obstante clauses and begin with the phrase ‘Nothwithstanding anything contained in this Act’…’. Therefore as between these provisions on the one hand, and any other provisions such as charging provisions under Sections 139 and 139A of the MMC Act, it is the application of Section 144A and Section 520C which will prevail in the event of any conflict; ii. Section 144A confers power upon the State Government or MCGM to grant concessions in payment of property tax towards implementation of any socially or ecologically beneficial scheme identified for the purposes Section 144A by the Municipal Corporation or the State Government. Whilst the Explanation to Section 144A pertains to ‘ecologically beneficial scheme’, there is no doubt that the explanation cannot curtail the scope of Section 144A which also encompasses socially beneficial schemes that are being implemented by the State Government or MCGM and which provide for concessions from payment of property taxes; iii. The GR issued by the State Government reflects a socially beneficial scheme as it pertains to concessions to be given on humanitarian grounds to widows of ex-servicemen. Concessions on such humanitarian grounds would, in our view, clearly fall within the expression ‘socially beneficial schemes’ as used in Section 144A. iv. Whilst Section 144A does then proceed to state that the percentum of concession even in respect of schemes formulated by the State Government will be determined by Respondent No. 1, it would be necessary to read Section 144A with the mandate of Section 520C to appreciate if a decision to grant full exemption from payment of property taxes by the State Government under the GR can or must be implemented under the MMC Act by Respondent No. 1. Section 520C which, as noted above, also begins with a non-obstante clause, essentially provides that Respondent No. 1 is duty bound to give effect to any instructions or directions issued by the State Government to Respondent No. 1 in matters of policy that may have been determined by the State Government. It is clear to us that the GR by which the State Government has categorically exempted widows of ex-servicemen from payment of property taxes constitutes an instruction or a direction as to a matter of policy, which is binding upon Respondent No. 1. Significantly, the GR is copied to Commissioners of all Municipal Corporations of the State as also to Commissioners and Directors, Directorate of Municipal Council Administration. It therefore clearly informs Respondent No. 1 of the instruction or direction as to a matter of policy. The Standing Committee Resolution in fact makes reference to Section 520C and is issued to give effect to the instructions or directions issued by the State Government, namely the GR. v. Given the statutory provisions, and on a harmonious interpretation of Section 144A read with Section 520C of the MMC Act, it is not possible for us to accept Respondent No. 1’s submission that the grant of exemption under the GR is without authority of law. Neither can we accept an interpretation based only on Section 144A, without regard to Section 520C, namely that the Respondent No. 1 alone can determine the percentage of concession in payment of property tax.
53. We therefore conclude by answering issue No.
(iii) in the affirmative and hold that there is sufficient legal and statutory basis in the provisions of the MMC Act for grant of exemption from payment of property tax as contemplated by the GR. Issue No. (IV): If issue No.
(i) is answered in the affirmative, whether the Standing Committee Resolution dated 29th June, 2017 can have the effect of restricting the exemption under the GR only to ‘General Taxes’ as one component of property taxes.
54. In answering issue No (iii), we have expressed our views on the provisions of Section 144A and Section 520C of the MMC Act, all of which are relevant to this issue as well. We have, as noted above, held that Respondent No. 1 is bound to give effect to the instructions and directions of the State Government and that the GR is in the nature of an instruction and direction as also an expression of a socially beneficial scheme or policy to grant concession from payment of property taxes on humanitarian grounds.
55. Thus, Respondent No. 1 cannot in any way deviate from giving effect to the GR in its entirety by restricting its implementation only to concessions in respect of ‘General Tax’ which is only one component of property tax levied under the provisions of the MMC Act. There is no doubt in our mind that the Resolution of the Standing Committee of 29th June, 2017 is a clear departure or curtailment of the benefit as plainly provided for in the GR. This is not permissible within the scheme of the MMC Act as inter alia borne out from Sections 144A read with 520C that have been discussed and explained in answer to issue No. (iii).
56. The Resolution passed by the Standing Committee of MCGM is with effect from 29th June, 2017. However, there is no explanation offered by MCGM as to why it has levied property tax, including General Tax, for the period 5th April, 2016 to 29th June, 2017 i.e. prior to the date on which the Standing Committee of MCGM resolved to limit the exemption under the GR to General Tax only and not to other components of property tax under the MMC Act. In any view of the matter, the levy of property tax under the MMC Act for the period 5th April, 2016 to 29th June, 2017 is illegal and liable to be quashed. However, as has been held by us, the levy of property tax even for the period after 29th June, 2017 is illegal, being contrary to the GR.
57. We therefore answer Issue No.
(iv) in the negative and hold that it is the GR that is required to be implemented in letter and spirit.
ORDER i. In view of our findings and conclusions as expressed above, we accordingly hold that the levy of property tax by the MCGM under the provisions of the MMC Act, as set out in the Impugned Property Tax Bills dated 4th June, 2016 and 11th September, 2019 is contrary to the GR and are hereby quashed and set aside. ii. As already stated above the Petitioner would, however, be liable to pay property tax in respect of those components which are charged under statutory provisions other than the MMC Act. Such components or parts of the overall levy of property tax as set out in the Impugned Bills (i.e. Tree Cess) are not exempted by the GR and are therefore not quashed and set aside. iii. The Writ Petition is accordingly disposed off. In the facts and circumstances of the case, there shall, however, be no order as to costs. ( RIYAZ I. CHAGLA, J. ) ( S.J.KATHAWALLA, J. )