AKOLA MUNICIPAL COUNCIL Vs. NILKANTH ANANT ATHALYE

JUDGEMENT

(1.) THE present petition has been filed by the Municipal Council, Akola, seeking to recover and assert the right to collect the tax imposed under Section 4 of the Maharashtra Education (Cess) Act, 1962 (hereinafter referred to as the Act) from respondent Nilkanth Athalye who is the owner of the building located within the municipal limits of Akola but having let out the same to the State Government for running a Deaf and Dumb School and Hostel, is not the occupier of the said building. When the demand was raised, the said Nilkanth Athalye preferred an objection successfully before the Judicial Magistrate, First Class, Akola, that the provisions of Section 7(&) of the Act were attracted as the building was let out to the State Government and it was, therefore, exempt from the imposition. Challenge by the present petitioner Municipal Council to that view before the Additional Sessions Judge, Akola, failed as is evident from the order dated July 8, 1969 made by that Court. After that the Municipal Council filed a revision application in this Court which was eventually permitted to be treated as a special civil application by a Bench of this Court by an order made on July 20, 1970.

(2.) AS stated above, the facts are not in dispute and they are bare; in that the respondent's building located in the town of Akola has been leased out to the State of Maharashtra and the said building is Used by the State as such for public purposes. The lease, it is said, is month to month. The only point is whether by virtue of the lease of the building in this manner in favour of the State Government, can it be said that the said building vests in the State Government as contemplated by Section 7 (b) of the Act? Both the Magistrate who heard the appeal of the respondent and the Additional Sessions Judge who heard the revision of the petitioner Municipal Council have found that the word 'vest' is wide enough to cover the cases of lease under which the building in possession vests in the lessee.

(3.) IT may be mentioned at the outset that the provisions of the Maharashtra Education (Cess) Act were constitutionally upheld by this Court as validly enacted primarily having reference to entry 49 of the State List: Ramchand v. Malkapur Municipal Council [196P] Mh. L.J. 540 : 72 Bom. L.R. 240. That entry permitted the imposition of tax on lands and buildings. This Court, after examining the scheme of the Act, found that the incidence of the tax under the provisions of the present Act was on lands and buildings. Section 4(a) of the Act provides for the levy of tax on lands and buildings in a municipal area at the rates specified in Schedule A annexed to the Act. Section 5 gives the mode of assessing education cess and refers in Sub -section (1) to a person owning more than one land or building in the municipal area and directs that the tax on lands and buildings should be assessed on the annual letting value of all such lands and buildings. For the purpose of assessment a mode is prescribed qua the owner of more than one land or building. Chapter III is titled as 'Provisions relating to collection of tax on lands and buildings.' It is, however, apparent that Section 7 carves out exemptions from the levy of the tax. Section 8 fixes the primary responsibility for payment of tax. Section 11 makes it a first charge on the property. Section 12 permits recovery and s,, 13 further permits recovery of the tax paid from the occupier. The provisions of Section 7 in this chapter are distinct from the other provisions and really will have to be read along with Section 4 of the Act. Having provided for the imposition and levy on lands and buildings of the education cess, Section 7 exempts certain; lands and buildings from the payment of tax. In this context, we may now quote the debated clause of Section 7 which reads as follows: 7. The following lands and buildings shall be exempt from payment of the tax on lands and buildings, that is to say: -' (b) lands and buildings vesting in the State Government or belonging to a municipality, a Zilla Parishad or a Cantonment Board and used exclusively for public purposes, and not used or intended to be used for purposes of profit; - (Italics ours). As we indicated above, there is no debate for the purposes of the present petition, about the use of the building concerned and the debate is narrowed so as to find out whether the building, by reason of the lease taken by the State Government, could be said to be a building that vests in the State Government.