TOKLE TIMBER MART Vs. STATE OF GUJARAT

JUDGEMENT

(1.) These petitions arise in similar background. We may, for the present, refer to facts as arising in Special Civil Application No. 16400 of 2015.

(2.) The petitioner is a proprietory concern and is engaged in trading in Timber for which purpose, the petitioner occupies premises which is situated within the limits of Bhavnagar Municipal Corporation. The petitioner has challenged a bill dated 22.07.2014 issued by the Bhavnagar Municipal Corporation demanding from the petitioner a property tax of Rs. 6,12,190/ - for the period upto 31.03.2013 and a further bill dated 24.09.2015 for the period after 31.03.2013.

(3.) The Property Tax Rules in Bhavnagar have a chequered history. Upto 31.03.1997, the Corporation had set of rules which provided for collection of property tax on annual rental basis. However, by issuing notification dated 31.03.1997, the Commissioner of Municipal Corporation introduced fresh set of rules permitting collection of property taxes in various properties situated within the Municipal Corporation on the basis of carpet area. This formula adopted the carpet area of the property whether open or constructed upon and then applied various factors principally depending on the nature and use of the properties. We are not directly concerned with the nitty - gritty of the manner in which these rules operated. Suffice it to note that large number of owners or occupiers of various properties of Bhavnagar challenged these rules before the High Court. A bunch of petitions being Special Civil Application No. 16864 of 2011 and connected petitions in case of Bhavnagar District Chamber of Industries vs. State of Gujarat through the chief Secretary and ors came to be disposed of by a Division Bench of this Court by judgement dated 30.08.2013. We would revert back to the judgement at a later stage. At this stage, we may record that the Court found that the Corporation had no power to levy property tax on carpet area basis. The Taxation Rules of 31.03.1997 were, therefore, declared as illegal. The Court was of the opinion that despite setting aside the Taxation Rules, there cannot be a vaccum or zero tax formula and, therefore, made two fold adjustments. With respect to those property owners or occupiers who had voluntarily paid the taxes as per the Taxation Rules of 31.03.1997, the Court provided that setting aside of the Rules would have no effect. With respect to the petitioners who had challenged the Rules, the Court provided that the Corporation could levy tax for the interim period, not on the basis of Rules of 31.03.1997 but on the basis of the structure prevailing prior to that. We may record that, by the time the Court delivered the judgement, Bhavnagar Municipal Corporation had come up with the fresh formula of carpet area based taxation rules on the strength of amended Section 144A of the Gujarat Provincial Municipal Corporations Act, 1949 and post 01.04.2013, all property taxes were to be governed by such fresh set of rules.