Harsha Devani, J.@mdashRule. Mr. Ritesh K. Soni, learned Advocate waives service of Rule on behalf of the Respondent-Municipal Corpn. Considering the nature of the controversy involved in the present case, the petition is taken up for hearing and final disposal today.
2. This petition under Article 226 of the Constitution of India challenges notice dated 27th October, 2009 (Annexure ''I'' to the petition) issued by the Respondent-Corporation and all other demand notices, bills, show-cause notices etc., issued by the Corporation calling upon the Petitioner to pay current dues as well as arrears of property tax. The Petitioner also seeks a declaration to the effect that the Petitioner is entitled to exemption from payment of property tax in terms of Section 132 of the Bombay Provincial Municipal Corporations Act, 1949 (the Act).
3. The facts of the case, as stated in the petition are that, the Petitioner, a society registered under the Societies Registration Act is engaged in charitable activities in the field of reproductive health care services including family planning, social marketing of contraceptives and various other mass level programmes. It is the case of the Petitioner that the Petitioner being a charitable institution is not liable to pay property tax in relation to its property being premises bearing Municipal Tenement No. 0512-01-1091-0001J, M/5-6, Mezzanine Floor, Mahakant Office Complex, Near V.S. Hospital, Ellisbridge, Ashram Road, Ahmedabad, (hereinafter referred to as "the subject property") as per the provisions of Section 132 of the Act. The Petitioner is exempted from levy of property tax in respect of properties owned by the Petitioner in other cities under similar provisions of law. It appears that on an earlier occasion pursuant to demand notice dated 21st May, 2004 issued by the Respondent, the Petitioner had approached this Court by way of a writ petition being Special Civil Application No. 607 of 2005 which came to be disposed of as withdrawn vide judgment and order dated 20th January, 2005 for the purpose of making representation to the Respondent, which as per the directions issued in the said order was required to be decided preferably within a period of three months of the date of receipt of the representation. It is the case of the Petitioner that it has made several representations and given reminders to the Respondent-Corporation to settle the issues involved as per direction of this Court which are still pending for disposal. It is farther the case of the Petitioner, that the Petitioner organization fulfils all the requirements for availing the benefit of exemption from the levy of property tax under the provisions of Section 132 of the B.P.M.C. Act, despite which, the Respondent levies property tax on the Petitioner continuously for each assessment year. In the aforesaid backdrop, being aggrieved by the impugned demand notice dated 27th October, 2009 calling upon the Petitioner to pay property tax, the Petitioner has moved the present petition seeking the reliefs noted hereinabove.
4. Mr. Vikram Thakor, learned Advocate appearing on behalf of the Petitioner has assailed the impugned notice contending that in view of the provisions of Section 132 of the Act, the Petitioner who satisfies all the requirements thereof is entitled to exemption from payment of general tax. Inviting attention to the provisions of Section 132 of the Act, it was submitted that under the said provision, lands and buildings solely occupied and used for public charitable purposes are exempt from levy of general tax. The Petitioner, a 100% charity organization, is running charitable activities in the State of Gujarat from the subject property and is exclusively occupying the said premises and as such is entitled to exemption from payment of general tax under the provisions of Section 132 of the Act. It was accordingly, urged that the refusal by the Respondent-Corporation to grant exemption from payment of property tax is arbitrary and illegal. Referring to the affidavit- in-reply as well as the further affidavit filed on behalf of the Respondent-Corporation, it was submitted that the Respondent has come out with a case that the property in question is being assessed u/s 141B of the Act and that as such, the provisions of Section 132 would not be applicable as the same are applicable only where property tax is calculated on the basis of rateable value. It was submitted that Section 132 of the Act still exists on the statute book and has not been deleted. If it was the intention of the Legislature to withdraw exemption granted u/s 132 of the Act, the said provision would have been deleted and as such, till the said provision remains on the statute book, it is immaterial as to whether the assessment is made u/s 129 or 141B of the Act. It was contended that since the subject property satisfies all the requirements of Section 132 of the Act for the purpose of being exempt from payment of property tax, the Respondent-Corporation is not justified in levying property tax in respect thereof. According to the learned Advocate, the specific exemption granted earlier by the Corporation cannot be withdrawn merely by applying the provisions of Section 141B of the Act. Attention was invited to the statement annexed at page 127 of the petition, to submit that though it is the case of the Respondent that it is levying property tax u/s 141B of the Act, in fact the Respondent seeks to levy general tax as well as other taxes, as contemplated u/s 129 of the Act. It was submitted that the statement issued by the Respondent itself indicates that the nature of the tax sought to be levied is general tax u/s 129 of the Act and not property tax as contemplated u/s 141B of the Act. It was submitted diat whatever be the manner in which the calculation of property tax has been made, it is evident from the said statement that what is levied is, in fact, a general tax in respect of which the Petitioner is entitled to exemption under the provisions of Section 132 of the B.P.M.C. Act. It was, accordingly, urged that the Respondent is not justified in denying the benefit of exemption to the Petitioner and demanding payment of property tax under the impugned demand notice and that the petition deserves to be allowed by quashing the impugned notice.
5. Resisting the petition, Mr. Ritesh Soni, learned Advocate for the Respondent invited attention to the provisions of Section 127 of the Act to submit that the said Section permits the Corporation to levy tax on properties situated in the city, either u/s 129 or u/s 141B of the Act. It was submitted that the provisions of Section 132 of the Act are attracted provided property tax is being levied on the basis of rateable value u/s 129 of the Act. However, the Respondent is now levying property tax u/s 141B of the Act on the basis of carpet value and as such the provisions of Section 132 would not be applicable. Inviting attention to the provisions of Section 141F of the Act, it was pointed out that whereas the provisions of Sections 138, 139, 140, 141 and 141A have been made expressly applicable in relation to property tax levied u/s 141B of the Act, Section 132 which provides for exemption from payment of tax has not been made applicable to tax levied u/s 141B. It was submitted that in the circumstances, since the provisions of Section 132 would not be applicable when property tax is levied u/s 141B of the Act, the Petitioner is not entitled to exemption under the said provision. Insofar as reference to general tax has been made in the statement annexed along with the affidavit is concerned, attention was invited to the affidavit dated 23rd December, 2010 of the Respondent to submit that the document produced at page 127 is an on-line statement and not a bill for a particular taxation year. That prior to the year 2001, the Corporation was charging tax as per Section 129 which provides for general tax and other taxes, hence, the said line was entered with an intention to clarify and demonstrate dues of general tax and other taxes for the period up to year 2001. However, after the year 2001, the Corporation has started calculating the tax as per Section 141B of the Act and that from the year 2001, there is no bifurcation like general tax, water tax and sewerage tax. It was submitted that in the circumstances, in view of the provisions of Section 141B of the Act under which property tax is levied by the Corporation, the Petitioner is not entitled to exemption u/s 132 of the Act and as such no case has been made out for grant of the reliefs prayed for in the petition.
6. In the background of the aforesaid facts and contentions, the main issue that arises for consideration in the present case is as to whether the Petitioner, if it satisfies the requirements of Section 132 of the Act, is entitled to exemption from payment of general tax. In this regard, it may be germane to refer to certain statutory provisions. Chapter XI of the Act makes provision for "Municipal Taxation" and comprises of Sections 127 to 152A. Section 127 of the Act which makes provision for "Taxes to be imposed under the Act" is the charging Section. Prior to the amendment in the provisions of the Act by the Gujarat (Amendment) Act No. 2 of 2007 (hereinafter referred to as the "Amendment Act"), Section 127 inter alia empowered the Corporation to impose "property taxes" either u/s 129 or "property tax" u/s 141B of the Act. However, by the Amendment Act, Section 127 came to be amended whereby the Corporation has been empowered to impose property taxes either u/s 129 or Section 141AA of the B.P.M.C. Act. Thus, for the period prior to the amendments brought about by the Amendment Act, the Corporation could levy "property taxes" u/s 129 or "property tax" u/s 141B. However, for the period subsequent thereto, the Corporation is empowered to levy property taxes either u/s 129 or Section 141AA of the B.P.M.C. Act.
7. Chapter XI of the Act is comprised of various parts, viz., Property Taxes, Taxes on vehicles, Boats and Animals, Exemptions from Theatre Tax, Other Taxes, Supplementary Taxation, and Writing off of Taxes. Insofar as the period prior to the Amendment Act is concerned, in relation to "Property Tax" there were two sub-headings, viz. "Property taxes" comprising of Sections 129 to 141A and "Property tax" comprising of Sections 141B to 141F. Section 129 bears the marginal note "Property taxes of what to consist and at what rate leviable" and provides that for the purposes of Sub-section (1) of Section 127, property taxes shall comprise of the taxes enumerated thereunder which shall subject to the exceptions, limitations and conditions provided thereunder, be levied on buildings and lands in the city. The property taxes u/s 129 of the Act are comprised of: (a) a water tax, (b) a conservancy tax, (c) a general tax, and (d) betterment charges leviable under Chapter XVI. Clause (c) of Section 129 reads thus:
(c) a general tax of not less than twelve per cent, but not more than thirty per cent of their rateable value, which may be levied, if the Corporation so determines on a graduated scale;
8. Thus, Section 129 of the Act provides for levy of general tax as determined by the Corporation on the rateable value of the property. Section 132 of the Act, the marginal note to which is "General tax on what premises to be levied" reads as under:
132. The general tax shall be levied in respect of all buildings and lands in the city, the rateable value of which exceeds six hundred rupee except--
(a) buildings and lands solely used for purposes connected with the disposal of the dead;
(b) buildings and lands or portions thereof solely occupied and used for public worship or for a public charitable purposes;
(c) buildings and lands vesting in the Government used solely for public purposes and not used or intended to be used for purposes of trade or profit or vesting in the Corporation, in respect of which the said tax, if levied, would under the provisions hereinafter contained by primarily leviable from the Government or the Corporation, respectively.
(1) The following buildings and lands or portions thereof shall not be deemed to be solely occupied and used for public worship or for a public charitable purpose within the meaning of Clause (b) of Sub-section (1), namely:-
(a) buildings or lands or portions thereof in which any trade or business is carried on; and
(b) buildings or lands or portions thereof in respect of which rent is derived whether such rent is or is not applied solely to religious or charitable purposes.
(2) Where any portion of any building or land is exempt from the general tax by reason of its being solely occupied and used for public worship or for a public charitable purposes, such portion shall be deemed to be a separate property for the purpose of municipal taxation.
9. Thus, Section 132 of the Act provides for levy of general tax in respect of all buildings and lands in the city, the rateable value of which exceeds the amount specified therein, except, inter alia where the buildings and lands are solely occupied and used for public worship and for public charitable purpose. Under the provisions of Section 132 of the Act, all buildings and land solely occupied and used for public charitable purposes are exempt from levy of general tax.
10. Prior to the Amendment Act, ''Property Taxes'', comprised of two parts: (i) "Property taxes leviable" and (ii) Property Tax. Sections 129 to 141A found place under ''Property taxes leviable'' whereas Sections 141B to Section 141F found place under ''Property Tax''. Thus, Section 132 found place under the part "Property taxes leviable".
11. The marginal note to Section 141B of the Act, as it stood prior to the Amendment Act, speaks of "property tax at what rate leviable". The said Section provided that for the purposes of Sub-section (1) of Section 127, property tax shall, subject to such exceptions and conditions provided thereunder, be levied annually on building and lands in the city at such rate per square metre of the carpet area of buildings and of the area of lands as the Corporation may determine. The marginal note to Section 141C of the Act prior to the Amendment Act speaks of "Property tax on what buildings and lands to be levied" and lays down that the property tax shall be levied in respect of all buildings and lands in the city except the buildings and lands vesting in the Government and used solely for the public purpose and not used or intended to be used for purpose of trade or profit, or vesting in the Corporation, in respect of which the said tax, if levied, would under the provisions contained thereafter be primarily leviable from the Government or the Corporation, respectively. Thus, the sole exception to levy of property tax under the second part, viz., "Property Tax" is to the buildings and lands as provided thereunder. Buildings and lands solely occupied and used for public charitable purposes, is not an excepted category. Another relevant provision is Section 141F of the Act which lays down that the provisions of Sections 138, 139, 140, 141 and 141A shall apply in relation to property tax levied u/s 141B subject to modifications specified in Appendix - IA. It may be pertinent to note that Section 132 of the Act does not find place u/s 141F.
12. From the statutory scheme as referred to hereinabove, it is apparent that prior to the Amendment Act, insofar as levy of property tax is concerned, the Act provided for two methods of levy thereof - (i) "property taxes" as provided under Sections 129 to 141A, and (ii) "property tax" as provided under Sections 141B to 141F of the Act. The charging provision, that is, Section 127 of the Act empowers the Corporation to levy property tax either u/s 129 or u/s 141B of the Act. Thus, it is open for the Corporation to levy property tax under either of the Sections. In the present case, the Corporation has chosen to levy property tax u/s 141B of the Act.
13. As noted hereinabove, Section 129 falls under the part ''Property Taxes'' and provides for levy of property taxes which are in the nature of a water tax, a conservancy tax, a general tax and betterment charges. Thus, property tax u/s 129 of the Act, consists of the aforesaid four components. General tax is a component of property taxes levied u/s 129 of the Act. Section 132 of the Act lays down as to on what premises, general tax is to be levied and also specifies the excepted categories which are not exigible to general tax. Thus, prior to the Amendment Act, Section 132 of the Act would be applicable in case where general tax is a component of the property tax sought to be levied on any premises within the limits of the Corporation. Whereas insofar as the levy of tax u/s 141B of the Act is concerned, the said provision falls under the second part of Property Taxes, viz., "Property Tax" and is comprised of a single component, viz., property tax. Since, there is no separate component like "general tax" when property tax is levied u/s 141B of the Act, it would not be possible to apply the provisions of Section 132 thereof to the same. Moreover, as noticed earlier, Section 132 falls under the Part "Property Taxes leviable" and as such would be applicable when property tax is levied u/s 129 of the B.P.M.C. Act. Insofar as applicability of the said provision to property tax levied u/s 141B of the Act is concerned, firstly the same falls under the Part "Property Taxes leviable"; secondly, since property tax u/s 141B does not have any separate component like general tax, it would not be possible to apply the same; thirdly, Section 141F of the B.P.M.C. Act which specifies the provisions under the first part, viz., "Property Taxes leviable" which would be applicable to the second part, viz., "Property Tax", does not include Section 132 of the B.P.M.C. Act. Thus, when the Legislature has specifically provided as to which provisions under the first part are applicable to the second part, it is deemed that the Legislature did not intend to make the other provisions of the first part applicable to die second part. Moreover, Section 141C of the Act which provides for the excepted categories in relation to property tax levied u/s 141B of the Act, does not include buildings and lands solely occupied and used for public charitable purposes. Thus, apart from the fact that Section 132 of the Act would not be attracted when property tax is levied u/s 141B of the Act, the subject property would not be exempt from payment of property tax even u/s 141C of the Act.
14. It may be noted that by virtue of the Amendment Act, several changes have been made in Chapter XI of the Act. Since, the demand in the present case, pertains to both the periods, it would be necessary to advert to the amended provisions of the Act also. Section 127 of the Act as amended insofar as the same is relevant for the present purpose reads thus:
127. For the purposes of this Act, the Corporation shall impose the following taxes, namely:-
(a) Property taxes either u/s 129 or u/s 141AA.
15. The second part under the heading Property Taxes, has also been amended and reads "Property Taxes" instead of "Property Tax". A new provision has been inserted in the second part, viz., Section 141AA which bears the marginal note "Property taxes of what to consist and at what rate leviable" lays down that for the purpose of Sub-section (1) of Section 127, property taxes shall comprise of the taxes stated thereunder which shall, subject to exceptions, limitations and conditions provided thereafter, be levied on buildings and lands in the city. The taxes specified thereunder are: (a) a water tax, (b) a conservancy and sewerage tax, (c) a general tax, and (d) betterment charges leviable under Chapter XVI.
16. Section 141B of the Act has also been amended. The marginal note thereto now speaks of "General tax on what premises to be levied". The amended Section 141B of the Act, insofar as the same is relevant for the present purpose, reads thus:
141B. (1) For the purposes of Clause (c) of Section 141AA, general tax shall subject to such exceptions and conditions hereinafter provided, be levied annually on building and lands in the city at such rate per square metre of the carpet areas of buildings and lands (hereinafter referred to as "the rate of tax") as the Corporation may determine.
17. Section 141C of the Act which provides for the exceptions to levy of property taxes, after the Amendment Act bears the marginal note "Property taxes on what buildings and lands to be levied" and reads thus:
141C. The property taxes shall be levied in respect of all buildings and lands in the city except the buildings and lands vesting in the Government and used solely for the public purpose and not used or intended to be used for purpose of trade or profit, or vesting in the Corporation, in respect of which the said tax, if levied, would under the provisions hereinafter contained be primarily leviable from the Government Resolution or Corporation, respectively.
18. By the Amendment Act, Section 141F of the principal Act has been substituted by the following Section:
141F. The provisions of Sections 140 and 141A shall apply in relation to property taxes levied u/s 141AA subject to modifications specified in Appendix I-A".
Thus, Section 132 has not been made applicable to levy of property taxes u/s 141AA of the Act.
19. On a conjoint reading of all the aforesaid provisions, it appears that Section 132 of the B.P.M.C. Act provides for the excepted categories from levy of "general tax" as a component of property taxes u/s 129 of the said Act whereas, Section 141C of the Act provides for the excepted categories from levy of "property tax" u/s 141B of the Act. Thus, Section 132 of the Act operates in a separate field, that is, the same provides for the premises on which general tax as contemplated u/s 129 of the Act is to be levied. Whereas insofar as general tax under the amended Section 141B of the Act is concerned, there is no specific exception from payment of general tax alone. The excepted categories in relation to levy of property taxes u/s 141AA of the Act are exempted from payment of property taxes as a whole, as provided u/s 141C of the Act. Except for the categories provided u/s 141C of the Act no other category is exempted from payment of property tax u/s 141AA of the Act. Moreover, from the language of Section 141AA of the Act, it is clear that the excepted categories are as provided thereafter, whereas Section 132 of the Act, precedes the said section. Hence, even though after the Amendment Act, levy of "property taxes" u/s 141AA is comprised of a "general tax" component, it is apparent that there is no legislative intent to make the provisions of Section 132 of the Act applicable to the general tax levied u/s 141B of the Act.
20. In the circumstances, in the present case, when it is the case of the Corporation that it is levying property tax u/s 141B of the Act, the Corporation is justified in adopting a stand that the Petitioner would not be entitled to exemption u/s 132 of the Act.
21. Insofar as the statement annexed along with the application is concerned, which indicates various categories like general tax, sewerage tax etc., a perusal of the said statement indicates that the tax has been computed in terms of Section 141B of the Act at the rate per square metre of the carpet area of the buildings and the area of such lands and not at the rateable value u/s 129 of the Act. Thus, although the statement indicates tax in the nature of general tax, water tax, sewerage tax etc., as contemplated u/s 129 of the Act, in effect and substance what has been levied is property tax u/s 141B of the Act. Hence, merely because the statement is as per the old format, would not detract from the case of the Respondent that the tax has been levied u/s 141B of the Act and as such the provisions of Section 132 would not be applicable. Moreover, in the affidavit dated 23rd December, 2010, the aforesaid aspect has also been clarified whereby it is stated that the document produced at page 127 is an on-line statement and not a bill of a particular taxation year. That prior to the year 2001, as the Corporation was charging tax as per Section 129 which provided for general tax and other taxes, the said amount was entered only with a view to clarify and demonstrate dues of general tax and other tax for the period up to year 2001. It is categorically stated in the affidavit that from the year 2001, there is no bifurcation like General Tax, Water Tax and Sewerage Tax. In the circumstances, the said contention that even if the tax is computed u/s 141B of the Act since the statement indicates levy of general tax, the Petitioner would be entitled to exemption u/s 132 of the Act, does not merit acceptance. However, it appears that the statement regarding there being no bifurcation of property tax would be relevant from the year 2001 to 2007, because by virtue of the Amendment Act, property taxes u/s 141AA of the B.P.M.C. Act are comprised of various components, including general tax, and Section 141B as amended provides for the rate of general tax leviable under Clause (c) of Section 141AA of the Act.
22. In the light of the aforesaid discussion, this Court is of the view that in respect of the levy of "property tax" u/s 141B of the Act (prior to the Amendment Act) as well as in respect of levy of "property taxes" u/s 141AA of the Act (after the Amendment Act), the provisions of Section 132 of the Act would not be applicable and as such, the subject property, even if it is solely occupied and used for a public charitable purpose as contemplated u/s 132 of the Act, the same would not be entitled to exemption from payment of "property tax" u/s 141B of the Act or from payment of "property taxes" u/s 141AA of the Act.
23. For the foregoing reasons, the petition fails, and is accordingly dismissed. Rule is discharged with no order as to costs.
