KOLKATA MUNICIPAL CORPORATION & ANR. vs CALCUTTA GUJARATI EDUCATION SOCIETY & ANR.

The reference to the writ petitioner in this judgment will mean reference to the Calcutta Gujarati Education Society. The appellant No.1 in the appeal

APO 412 of 2015, which is the writ petitioner, is an assessee for property tax on premises no. 29, Pollock Street, Kolkata-1.

They question the authority of the Kolkata Municipal Corporation (hereinafter referred to as the respondent Corporation) to demand surcharge on

property tax on and from 1st May, 2007 till 1st January, 2012. The writ petitioner contends that with effect from 1st May, 2007, Section 171 (4) of the

said Act which provided for imposition of this surcharge was repealed. Section 232A was added in 2011 with effect from 1st January, 2012. Section

232A is very important and is set out below:

“Certain provisions applicable prior to enactment of the Kolkata Municipal Corporation (Amendment Act, 2006 shall continue to be in force. â€

Notwithstanding anything contained in this Act, the provision of section 171, sub-section (1) of Section 174, Sections 175, 179, 180, 182A, 184, 185,

186, 189, 190, 191, 193, 197, 215, 217 and 221A which were in force immediately prior to the commencement of the of the Kolkata Municipal

Corporation (Amendment) Act, 2006 (West Ben. XXXII of 2006), shall continue to be in force until final publication of the scheme under sub- Section

1 of section 174 of this Act as amended by the Kolkata Municipal Corporation (Amendment) Act, 2006: Provided that the preparatory works under

sub-section (1) of section 174 of this Act as amended by the Kolkata Municipal Corporation (Amendment) Act, 2006 leading to final publication of the

scheme shall continue.â€​

The writ petitioner says that the annual valuation could be revised but the respondent Corporation did not have the right to levy surcharge on the

property for the period 1st May, 2007 to 31st December, 2011. According to the respondent Corporation Section 171 continued till 31st December,

2011 and thereafter. The respondent Corporation could claim surcharge for this period. In short the argument is that the amendment has retrospective

effect.Section 232A starts with a non-obstante clause to the effect that “Notwithstanding anything contained in this Act, the provision of section

171, sub-section (1) of Section 174, Sections 175, 179, 180, 182A, 184, 185, 186, 189, 190, 191, 193, 197, 215, 217 and 221A which were in force

immediately prior to the commencement of the of the Kolkata Municipal Corporation (Amendment) Act, 2006 (West Ben. XXXII of 2006), shall

continue to be in force until final publication of the scheme under sub- Section 1 of section 174 of this Act as amended by the Kolkata Municipal

Corporation (Amendment) Act, 2006: Provided that the preparatory works under sub-section (1) of section 174 of this Act as amended by the Kolkata

Municipal Corporation (Amendment) Act, 2006 leading to final publication of the scheme shall continue.â€​

The 2006 amendment never became effective as the respondent Corporation could not frame the scheme to implement it. Learned advocate Mr.

Biswajit Mukherjee submitted that the amendment to the Act made on 1st January, 2012 had retrospective effect. Mr. Mukherjee also tried to argue

that even it was assumed, without making any admission that the writ petitioner was entitled to refund of the commercial surcharge paid in this

intervening period between 1st May, 2007 and 1st January, 2012 they were not entitled to it, for the reason that they had passed on the burden of this

tax to third parties, like students by realising it from them. The Hon’ble 1st Court had made a very detailed analysis of the submissions made on

behalf of the respective parties. It does not appear from the narration that these submissions were ever made before the trial court. In those

circumstances, we did not allow this plea which is a mixed question of law and fact to be taken for the first time at the appellate stage.

The following findings have been arrived at by Mr. Justice Basak. The Kolkata Municipal Corporation (Amendment) Act, 2011 does not state that

retrospective effect is to be given to Section 232A. No authority was cited before the court to suggest that commercial surcharge which was in the

nature of property tax could be given retrospective effect. The right to impose surcharge ceased for the period of 1st May, 2007 to 1st January, 2012.

The writ petitioner was entitled to refund of the surcharge paid for this period amounting to Rs. 5,32,920.50 within four weeks from the date of the

order. The demand for surcharge made in the property tax bill for the period of 2008-2009 was set aside. The respondent Corporation was restrained

from realising any surcharge from the writ petitioner from 1st May, 2007 till 1st January, 2012. The writ application was allowed. Our Views: The

proviso to Section 171(4), upto 30th April, 2007 was as follows:

“171(4) â€" Notwithstanding the provisions of sub-section (2) and sub-section (9), the Corporation may, where any land or building or hut or portion

thereof is used for commercial or non-residential purpose, levy a surcharge on the property tax on such land or building or hut or portion thereof at

such rate not exceeding fifty per cent of the property tax as the Corporation may from time to time determine:

Provided that where any portion of any land or building or hut is used for commercial or non-residential purpose, the amount of the property tax

payable in respect of such portion shall, while fixing the property tax for the entire land or building or hut, be separately calculated:

Provided further that subject to such rules as may be made by the State Government in this behalf for the grant of exemption from surcharge in

respect of any class or classes of lands or building or huts, used for education, medical, public health or cultural purposes or for purposes of sports, the

Corporation may exempt any such land or building or hut from payment of the surcharge:

Provided also that such exemption shall in no case exceed seventy-five per cent of the surcharge.â€​

By the Kolkata Municipal Corporation (Amendment) Act, 2006 which came into effect from 1st May, 2007 this sub-section was omitted. By a further

amendment to the said Act, entitled the Kolkata Municipal Corporation (Amendment) Act, 2011, Section 232-A was added, with effect from 1st

January, 2012. The key issue is whether between 1st May, 1997 and 31st December, 2011, the levy of surcharge as provided in Section 171(4) could

not be made. Learned Counsel for the writ petitioner submitted that the power of the respondent Corporation to levy the commercial surcharge was

taken away for the above period. Section 232-A had no retrospective operation. Hence the power to levy surcharge could once again be exercised

from 1st January, 2012. The total amount paid by the writ petitioner on account of this surcharge for the period 1st quarter 2007-08 upto the 1st

quarter 2011-12 amounting to Rs.5,32,920.50/- was refundable to them.

Now, we have to decide the contention raised by the respondent corporation that 232-A had retrospective effect. According to them, by operation of

this section the entire period from 1st May, 2007 to 31st December, 2011 was covered. There was no respite from commercial surcharge. Only the

charging section had changed place in the statute. The 2006 amendment took effect from 1st may, 2007. The amendment Act of 2011 took effect

from 1st January, 2012 with retrospective effect. It is undeniable that between the enactment of the Amendment Act of 2006 and the Amendment

Act of 2011, Section 171(4) of the said Act stood deleted from the statute book. If the Amendment Act, 2011 did not come into force commercial

surcharge could not be claimed by the respondent corporation.

One has to very carefully examine and analyse Section 232-A, first taking the words thereof in their ordinary grammatical meaning. In our opinion

great weightage must be attached to the use of the expression “continue to be in force†in Section 232-A. Now, if it was the intention of the

legislature that from 1st May, 2007 to 31st December, 2011 there would be no levy and collection of commercial surcharge it would not have used the

word ‘continue’ but would have chosen some other words such as “shall be reinstated†or “shall be in forceâ€. The word

“continue†suggests continuity or in other words there would be no break in the operation of Section 171(4). Another phrase which deserves

interpretation, to ascertain the intention of the legislature is the use of the non-obstante clause “notwithstanding anything contained in this Actâ€. If

the operation of the 2011 amendment was prospective there was no need to incorporate these two words or phrase. It is a trite legal principle that the

legislature does not use words which are superfluous or surplus or without any meaning.

The combined effect of the incorporation of these words and phrases in Section 232-A seems to be that the legislature intended continuation of the

state of affairs existing at the time of the enactment of the 2006 Amendment Act. In those circumstances it is evident that commercial surcharge as

leviable and chargeable immediately prior to the coming into force of the Kolkata Municipal Corporation (Amendment) Act, 2006 continued to be

leviable and chargeable under Section 232-A, applied with retrospective effect.

In those circumstances we are not in agreement with the conclusion arrived at by the learned trial Judge that Section 232-A was prospective and the

writ petitioner was entitled to refund allowed by the impugned judgment and order. In those circumstances the appeal preferred by the Calcutta Gujrati

Education Society & Anr. (APO 412 of 2013) is dismissed. The appeal preferred by the Kolkata Municipal Corporation & Anr. (APO 470 of 2015) is

allowed. The impugned order of the learned trial Judge dated 15th June, 2015 is set aside. Certified photocopy of this Judgment and order, if applied

for, be supplied to the parties upon compliance with all requisite formalities. I Agree.

(Md. MUMTAZ KHAN, J.) Â Â Â Â Â (I.P. MUKERJI, J.)

LATER: Judgment in the above appeals was made ready a little before the recent cease work called by the lawyers of this Court. It was not placed

for judgment because of the cease work. The lawyer aggrieved by the judgment might not have been able to be present to ask for stay of operation

thereof. The application for a certified copy of the order may not have been submitted in time.

However, as the cease work continued without any prospect of the Court resuming its normal functions in the foreseeable future, on and from 5th

April, 2018 these matters were placed in the list “For Judgmentâ€. Nevertheless, judgment was not delivered, hoping that the cease work would

end. This Court is of the opinion that it is high time to deliver the judgment in the interest of the parties and in the interest of justice. A judgment in the

above appeals has been delivered today (26.04.2018). Certified photocopy of this order, if applied for, be supplied to the parties upon compliance with

all requisite formalities.