Case Note & Summary
The petitioner, a rate payer, challenged a letter dated 14th January 1998 issued by the Urban Development Department of the Government of Maharashtra to all District Collectors and Chief Officers of Municipal Councils. The letter directed that Municipal Councils which had not levied the special water tax at the prescribed rate as per Government Notification dated 1st April 1997 should take immediate action to levy the tax. For Municipalities that had refused to levy the minimum water tax or had sanctioned a lower rate, the letter directed cancellation of their resolutions. It further directed that unless the special water tax at the prescribed rate was levied, the Collector/Commissioner should not grant approval to the annual budget of the Municipalities. The petitioner argued that it was open to Municipalities to frame bye-laws and that the Government's power under Section 112 of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 did not extend to such coercive directions. The court considered the provisions of Section 108(f) which empowers the Council to impose a special water tax, and Section 112 which gives the State Government power to make bye-laws notwithstanding any rules, bye-laws or resolutions. The court held that the Government's power under Section 112 is overriding and includes the power to prescribe the rate of tax and to take consequential actions such as cancelling resolutions and withholding budget approval to ensure compliance. The petition was dismissed.
Headnote
A) Municipal Law - Power of State Government - Levy of Special Water Tax - Section 112, Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 - The State Government has the power under Section 112 to prescribe a minimum rate of special water tax and to direct Municipal Councils to levy the same. The Government can also direct cancellation of resolutions that refuse or reduce the tax and withhold approval of the annual budget if the tax is not levied. (Paras 1-3) B) Municipal Law - Power of Municipal Council - Levy of Special Water Tax - Section 108(f), Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 - A Municipal Council has the power to impose a special water tax for water supplied by the Council, but this power is subject to the overriding power of the State Government under Section 112. (Para 2)
Issue of Consideration
Whether the State Government has the power under Section 112 of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 to direct Municipal Councils to levy a special water tax at a prescribed minimum rate and to take coercive measures such as cancelling resolutions and withholding budget approval if the tax is not levied.
Final Decision
The petition is dismissed. The court upheld the Government's power under Section 112 of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 to prescribe a minimum rate of special water tax and to direct Municipal Councils to levy the same, including taking coercive measures such as cancelling resolutions and withholding budget approval.
Law Points
- Government's power to prescribe minimum water tax
- Section 112 Maharashtra Municipal Councils Act
- 1965
- Section 108(f) Maharashtra Municipal Councils Act
- power to cancel resolutions
- power to withhold budget approval
