Case Note & Summary
The petitioner, Bajaj Auto Ltd., a company registered under the Companies Act and engaged in manufacturing two and three wheelers, has its registered office at Pune and a manufacturing unit at Aurangabad. The unit is situated on land admeasuring 314 hectares within the limits of MIDC, Aurangabad, and additionally owns private land of 56.50 hectares. The entire land falls within the jurisdiction of Gram Panchayat of Waluj, Jogeshwari and Waladgaon. The petitioner pays service charges of Rs. 94,20,000 per annum and Rs. 6,28,000 towards fire safety services to MIDC, Waluj. The Gram Panchayat (respondent No. 6) issued a bill of demand for property tax, and respondents No. 4 and 5 (Chief Executive Officer and Block Development Officer) sent back the agreement entered between the petitioner and respondent No. 6 for lump-sum contribution in lieu of taxes, without forwarding it to respondent No. 2 (Divisional Commissioner). The petitioner challenged these actions by filing a writ petition under Article 226 of the Constitution of India. The legal issue was whether the Gram Panchayat could levy property tax on land within the MIDC area. The petitioner argued that MIDC is an industrial township and under Section 124 of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965, once such a township is constituted, the Gram Panchayat loses jurisdiction. The respondents contended that the Gram Panchayat had the power to levy tax under the Maharashtra Village Panchayats Act. The Court analyzed Section 124 and held that the MIDC area is an industrial township, and the Gram Panchayat cannot levy property tax on land within that area. The Court quashed the demand and directed the respondents to consider the agreement for lump-sum contribution in accordance with law. The petition was allowed with no order as to costs.
Headnote
A) Local Government - Property Tax - Levy by Gram Panchayat on MIDC Land - Section 124 of Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 - The petitioner, a company, challenged the property tax demand by Gram Panchayat for its land within MIDC area, contending that MIDC already levies service charges and the Gram Panchayat cannot impose tax on such land. The Court held that under Section 124 of the 1965 Act, once a Municipal Council or Industrial Township is constituted, the Gram Panchayat ceases to have jurisdiction over that area. Since the land is within MIDC, which is an industrial township, the Gram Panchayat cannot levy property tax. The demand was quashed. (Paras 2-10) B) Local Government - Double Taxation - Prohibition - Section 124 of Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 - The Court held that the levy of property tax by Gram Panchayat on land already subject to MIDC charges would amount to double taxation, which is impermissible under Section 124. The Gram Panchayat's demand was set aside. (Paras 8-10) C) Constitutional Law - Writ Jurisdiction - Article 226 of Constitution of India - The petitioner invoked Article 226 to challenge the illegal demand of property tax. The Court allowed the petition, quashing the demand and directing the respondents to consider the agreement for lump-sum contribution in accordance with law. (Paras 1, 11)
Issue of Consideration
Whether the Gram Panchayat is entitled to levy property tax on the land and building of the petitioner situated within the MIDC area, and whether the action of respondents in not forwarding the agreement for lump-sum contribution is valid.
Final Decision
The petition is allowed. The impugned bill of demand of property tax issued by respondent No. 6 is quashed and set aside. The respondents are directed to consider the agreement for lump-sum contribution in accordance with law. Rule made absolute. No order as to costs.
Law Points
- Gram Panchayat cannot levy property tax on land within MIDC area
- Section 124 of Maharashtra Municipal Councils
- Nagar Panchayats and Industrial Townships Act
- 1965 bars double taxation
- Article 226 of Constitution of India for writ jurisdiction
