BHAGWANDAS Vs. INDORE MUNICIPAL CORPORATION

JUDGEMENT

(1.) Invoking the jurisdiction under Article 226 of the Constitution and challenging the resolution (Annexure P/1) the bill of recovery (Annexure P/2) issued by the Municipal Corporation, Indore, the petitioner has filed this petition.

(2.) It is said that petitioner is the tenant of Shop No.8, Purana M.T.H. Compound, Indore on a monthly rent of Rs.125/-. The respondent No.1- Corporation is the owner thereof. However the petitioner is having a lease hold right in the said property. As per Section 132 of the M.P. Municipal Corporation Act, 1956 (hereinafter referred to as 'the Act'), the respondent No.1 is entitled to impose and recover the tax only against the owner of the property and no tax can be imposed on a person having a lease hold right and to recover it. It is further said that in exercise of the power under Section 433 read with Section 138 of the Act, the Rules were framed which were known as Madhya Pradesh Nagar Palika (Bhawno/ Bhumiyo Ke Varshik Bhada Mulya Ka Avdharan) Niyam, 1997 (in short 'the Rules '). As per the said rules, the Corporation is bound to divide the municipal area in zones and by passing a resolution the rate to determine the annual letting value of the properties may be fixed. As per the Rules, the respondent-corporation passed resolution No.338 dated 11.12.1997, determining the property tax and also resolved for imposition of service tax. It is urged that the imposition of the tax by the said resolution and to make demand is not in conformity to the provisions of the Act and the Rules made thereunder, therefore such resolution may be set aside and the demand as made may also be quashed.

(3.) The respondent-Corporation by filing their return stated that the petition as filed by the petitioner is entirely on wrong and incorrect basis, treating service tax/fee as a property tax. It is said that the property tax on a property owned by Corporation is not leviable, however as per Section 132 (1) (c) (d) and (e) of the Act, the taxes for the services rendered in general may be leviable. If the Corporation by the said resolution fix the tax considering the notification issued by the State Government in the Gazette of State of M.P. dated 9th May, 1997 (Annexure R/2) and the letter issued (Annexure R/3) and directed such recovery, it cannot be said to be illegal. In fact, it is within the competence of the Corporation to impose such taxes and in view of the language of clause (10) of the lease deed (Annexure R/4), the petitioner is bound to pay such an amount without raising any objection on the said issue. In view of the foregoing, it is urged that the resolution (Annexure P/1) and the demand (Annexure P/2) has rightly been made by the respondent-Corporation.