NEW DELHI MUNICIPAL COUNCIL Vs. STATE OF PUNJAB

JUDGEMENT

(1.) These Civil Appeals and Special Leave Petitions have been filed against the judgment and order of the Delhi High Court dated March 14, 1975 in Civil Writ Petition No. 342 of 1969 and other orders which follow this judgment. The appellant in all these matters is the New Delhi Municipal Committee (hereinafter called "the NDMC"). The respondents are the Union of India and the States of Andhra Pradesh, Gujarat, Haryana, Jammu & Kashmir, Kerala, Madhya Pradesh, Maharashtra, Orissa, Punjab, Rajasthan, Tripura and West Bengal. The Municipal Corporation of Delhi (hereinafter called "the MCD") appears as in intervener. The Case History

(2.) The developments that occasioned the setting up of the Constitution Bench may now be briefly set out. The Punjab Municipal Act, 1911 (hereinafter called "the Act" is applicable to the Union Territory of Delhi and under the provisions of this Act, the NDMC had been levying property tax on the immovable properties of the respondent States situated within Delhi. The respondents challenged the imposition of such a tax on their properties before the Delhi High Court by contending that it would fall within the exemption provided for in Article 289 (1) of the Constitution. In the impugned judgment, the Delhi High Court, while accepting this contention, relied upon the relevant observations of the 9 -Judge Constitution Bench of this Court in In Re The Bill to amend Section 20 of the Sea Customs Act, 1878 and Section 3 of the Central Excises and Salt Act, 1944, [1964] 3 S.R. 787 (hereinafter called "The Sea Customs Case"), to quash the assessment and demands of house -tax in respect of the properties of the States and restrained the NDMC from levying such a tax in future. The NDMC filed an application under Article 133(1)(c) of the Constitution seeking the grant of a certificate for leave to appeal to the Supreme Court, while granting the Certificate, the High Court observed that the principal question before it had grave constitutional implications which required an authoritative decision by this Court.

(3.) On January 1, 1976, a Division Bench of this Court directed that the NDMC could continue to make assessments but it was not to issue demand notices or make any attempts towards realisation of the taxes. On October 29, 1987, another Division Bench of this Court directed that the matter be listed before a Constitution Bench. On January 14, 1993, a 5 -Judge Constitution Bench of this Court began hearing arguments and after considering the rival submissions, on October 4, 1994, passed an order referring the matter to a 9 -Judge Bench. In the said order, the Bench observed that it had considered the decision in the Sea Customs Case and was of the opinion that the point at issue in these matters was covered therein. The decision in the Sea Customs case having been reaffirmed by the decision of this Court in Andhra Pradesh State Road Transport Corporation v. The Income Tax Officer & Another, (1969) 7 S.C.R. 17 (hereinafter called "the APSRTC case"), the Bench considered itself bound by the decision; however, it was of the view that the arguments advanced before it, which were not considered by the earlier decisions, were plausible and required consideration which necessitated the setting up of a 9 -Judge Bench to hear the matter. The Impugned Judgment