Case Note & Summary
The petitioner, Oil & Natural Gas Corporation Ltd. (ONGC), filed a writ petition challenging the demand of property tax by the Gram Panchayat Kalundre. ONGC had entered into a lease agreement with CIDCO for land, under which ONGC paid service charges in lieu of municipal taxes. ONGC argued that this payment exempted them from paying property tax to the Gram Panchayat. The High Court, however, noted that the controversy was squarely covered by a Division Bench judgment in Bima Office Premises Co-operative Society v. Kalamboli Village Panchayat, 2001(1) Mh.L.J. 806. In that case, it was held that the power of a Development Authority under Chapter VI of the MRTP Act to levy development charges does not exempt the property from municipal taxes leviable by the Gram Panchayat under the Maharashtra Village Panchayats Act. The court observed that the lease agreement for service charges did not override the statutory liability to pay property tax. Consequently, the petition was dismissed, and ONGC was held liable to pay the property tax demanded by the Gram Panchayat.
Headnote
A) Municipal Law - Property Tax - Liability of Lessee - Maharashtra Village Panchayats Act, 1959 - The issue of whether a lessee of CIDCO is liable to pay property tax to the Gram Panchayat despite paying service charges to CIDCO was considered. The Division Bench in Bima Office Premises Co-operative Society v. Kalamboli Village Panchayat held that the power to levy development charges under Chapter VI of MRTP Act does not exempt the property from municipal taxes. The court dismissed the petition, following the precedent. (Paras 2-4)
Issue of Consideration
Whether the petitioners (ONGC) are liable to pay property tax to the Gram Panchayat despite having a lease agreement with CIDCO for payment of service charges in lieu of municipal taxes.
Final Decision
The writ petition is dismissed. The petitioners are liable to pay property tax to the Gram Panchayat.
Law Points
- Levy of property tax by Gram Panchayat is not affected by lease agreement for service charges with CIDCO
- Service charges paid to CIDCO do not exempt property from municipal taxes under Maharashtra Village Panchayats Act
- 1959
- The issue is concluded by Division Bench judgment in Bima Office Premises Co-operative Society v. Kalamboli Village Panchayat
Case Details
2005 LawText (BOM) (04) 229
Writ Petition No.1775 of 1997
R. M. Lodha, R. S. Mohite
Mr. S.P. Bhalwal i/b. M/s. Vyas & Bhalwal for the petitioners, Mr. C.G. Gavnekar for the respondents 1 and 4
Oil & Natural Gas Corporation Ltd.
Gram Panchayat Kalundre, Collector of Raigad, CIDCO Ltd., State of Maharashtra, Pramukh Zilla Parishad
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Nature of Litigation
Writ petition challenging demand of property tax by Gram Panchayat.
Remedy Sought
Petitioner sought to avoid payment of property tax to Gram Panchayat on the ground that service charges were paid to CIDCO under lease agreement.
Filing Reason
Gram Panchayat demanded property tax from ONGC; ONGC contended that it was not liable due to lease agreement with CIDCO for service charges.
Previous Decisions
Division Bench judgment in Bima Office Premises Co-operative Society v. Kalamboli Village Panchayat, 2001(1) Mh.L.J. 806, which held that service charges paid to CIDCO do not exempt property from municipal taxes.
Issues
Whether the petitioners are liable to pay property tax to the Gram Panchayat despite paying service charges to CIDCO under a lease agreement.
Submissions/Arguments
Petitioners argued that as per the lease agreement with CIDCO, service charges are payable in lieu of municipal taxes, and thus they are not liable to pay property tax to the Gram Panchayat.
Respondents relied on the Division Bench judgment in Bima Office Premises Co-operative Society v. Kalamboli Village Panchayat, which held that service charges do not exempt property from municipal taxes.
Ratio Decidendi
The lease agreement for payment of service charges to CIDCO does not exempt the property from municipal taxes leviable by the Gram Panchayat under the Maharashtra Village Panchayats Act. The issue is concluded by the Division Bench judgment in Bima Office Premises Co-operative Society v. Kalamboli Village Panchayat.
Judgment Excerpts
The controversy raised in the writ petition is wholly and squarely concluded by the Division Bench judgment of this Court in the case of Bima Office Premises Co-operative Society v. Kalamboli Village Panchayat & ors., 2001(1) Mh.L.J. 806.
If we turn to Chapter VI of the MRTP Act, it only authorises the Development Authority to levy and recover development charges. Section 124-L falling in the said chapter clearly provides that power to levy development charges does not include power to levy property tax.
Procedural History
The writ petition was filed in 1997. The matter was heard on 8th April 2005 and dismissed following the precedent of Bima Office Premises Co-operative Society v. Kalamboli Village Panchayat.
Acts & Sections
- Maharashtra Village Panchayats Act, 1959:
- Maharashtra Regional and Town Planning Act, 1966 (MRTP Act): Section 124-L, Chapter VI
