MRS. RUBABAI WIDOW OF ABDUL-HUSSEIN MULLA MOHOMEDALLY AND ORS. Vs. MUNICIPAL CORPORATION OF GR. BOM. AND ANR.

JUDGEMENT

(1.) THE petitioner are the owners of a building bearing Ward No. 4874(1 -2), Street No. 68 -70, situated at Clive Road, Bombay -400 009. The building consists of a basement, a ground floor, a mezzanine floor and five upper floors. The ground floor and the mezzanine floor of this building were let out by the petitioners to the Post and Telegraph Department of the Union of India up to 30 -6 -1985.

(2.) UNDER the Maharashtra Education and Employment Guarantee (Cess) Act, 1962, the Government of Maharashtra has levied with effect from 1st April, 1975 an Education Cess and an Employment Guarantee Cess on the said building. The petitioners received bills for property taxes including Education Cess and Employment Guarantee Cess for the period 1 -4 -1983 to 31 -3 -1985 from the 1st respondents. Despite notices of demand the petitioners did not pay the said bills and hence a warrant of attachment dated 11 -12 -1984 was issued and attachment levied on the said property for non payment of the said bills. The warrant of attachment sets out that the warrant of attachment is for non payment of a sum of Rs. 1,41,530.50 ps which sum consists of property taxes amounting to Rs. 1,35,429/ -, penalty of Rs. 16,086.40 ps., notice fee of Rs. 15/ - and Warrant cost of Rs. 10/ - amounting in all to Rs. 1,41,540.40 ps. This warrant of attachment has been challenged in the present petition. According to the petitioners, the demand for Education and Employment Guarantee cess is not correctly calculated on the said building and that the portion of the building which is occupied by the Post and Telegraph Department of the Government of India is exempt from the payment of Education Cess and Employment Guarantee Cess. The petitioners claim credit for the Cess paid by them under these heads right from 1st April, 1975 up to 1st April, 1983. The petitioners have, after the warrant of attachment, deposited with the respondents an amount of Rs. 86,740.51 ps in respect of the said claims made by the respondents. According to the petitioners, if credit is given to the petitioners for the Education and Employment Guarantee Cesses mistakenly paid earlier by the petitioners for the period 1 -4 -1975 to 31 -3 -1983, which, according to the petitioners, amount to Rs. 75,138/ -, nothing is now due and payable by the petitioners to the respondents and hence the warrant of attachment should be set aside.

(3.) CHAPTER II of the Maharashtra Education and Employment Guarantee (Cess) Act, 1962, deals with Education Cess. Under section 4 of the said Act which falls under Chapter II, there shall be levied and collected "(a) with effect from the 1st day of April 1974, a tax on lands and buildings in a municipal area at the rates specified in Schedule A hereto annexed. Schedule A provides for Slabs of annual letting value, rate to be charged in respect of land or building used or intended to be used for residential purpose and for non residential purpose. Different rates are provided for residential and non residential buildings. Explanation 2 to Schedule A provides that where any land or building is used partly for residential purpose and partly for non -residential purpose, then for the purpose of determining the rate of tax specified in Schedule A (which is related to the annual letting value of the building), the annual letting value of the entire land or building is to be taken into account; but for calculating the actual amount of tax at this rate, the annual letting value of the portion of land or building used or intended to be used for residential purpose only, or for non -residential purpose only, (as the case may be) shall be taken into account. In other words, by virtue of this Explanation, if a building is used both for residential and non -residential purposes, the tax will have to be calculated separately on the residential portion of the building and the non -residential portion of the building at the rates specified in Schedule A in respect of each. However, the rate of tax in respect of each of these portions will be determined with reference to the annual letting value of the entire building. For example if the annual letting value of the entire building is Rs. 3000 or more but less than Rs. 6000, then as per Schedule -A, the rate to be charged for the portion of the building used for residential purpose will be 5% of the annual letting value of the portion which is used for residential purpose, while it will be 10% of the annual letting value of the portion which is used for non -residential purpose. Similarly if the annual letting value of the entire building is more than Rs. 6000 then the rate for the residential portion goes up to 6% and the rate for the non -residential portion goes up to 12%. Clearly, therefore, the annual letting value of the residential and non -residential portions has to be calculated and Education Cess is required to be calculated on these portion separately as per Schedule A.