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Judgment
V.M. Kanade, J.—The Petitioner has filed this petition under Article 226 of the Constitution of India, seeking appropriate writ, order or direction for quashing the letter dated 9th January 2010, which is annexed at Exh. O, letter dated 2nd February 2008, which is annexed as Exh. M and also circular dated 17th October 2007, which is annexed as Exh. N in this Petition. Brief facts which are relevant for the purpose of deciding this petition are as under:-
The Petitioner is the Cooperative Housing Society. One Chimanlal Amritlal Trust owned a plot of land bearing C.T.S. No. 489 at Malbar Hill and Cumballa Hill Division, being Plot No. 63, Gamdevi Estate, Laburmum Road, Gamdevi, Mumbai-400 007-. On this plot, there was a old building, which was occupied by thirteen tenants. The tenants and the trustees of the said Trust have entered into an agreement dated 30th March, 1994 and it was agreed that the said building is to be demolished and thereafter a new building would be constructed on the said land.
Thereafter an application was preferred by the Petitioner to the MHADA Authority, who were pleased to grant NOC for redevelopment of the said property by their order dated 28th July, 1994. The Corporation also issued Intimation of Disapproval (IOD) by their letter dated 18th May, 1996. A Commencement Certificate was also issued by the Corporation by their letter dated 26th May, 1997. It is an admitted position that the said building was demolished in the year 1996 for the purpose of repairs and reconstruction and thereafter a new building was reconstructed in the year 2000.
Thereafter Respondent No. 1 Corporation assessed the said building in category ''A'' by order dated 2nd May 2000. The construction of the new building was completed on 10th April 2000. However, the Corporation has claimed repair cess of the said building from 1996 to 2000 from the Petitioner. A representation was made by the Trustees of the Trust by their letter dated 6th March, 2000, which is addressed to Asst. Assessor and Collector of ''D'' Ward. It was contended that the Petitioner was entitled to exemption from repair cess since the building was not in existence after 1996 till 2000. Correspondence was exchanged in between the Petitioner, Respondent No. 1-Corporation and the Asst. Assessor and Collector. The Asst. Assessor and Collector asked the Trustees of the Trust to submit a list of documents mentioned in the letter and accordingly compliance was made by the Trustees and all the documents which were demanded by the Asst. Assessor & Collector were submitted within the time prescribed by the said letter. The grievance of the Petitioner is that in-spite of compliance of all the requisitions made by the Respondents, Respondent No. 1 vide letter dated 19th January 2010 directed the Petitioner to pay the repair cess immediately from 1st October, 1996 to 5th March, 2000 amounting to Rs. 9,92,874/-.
Being aggrieved by the demand made by the Respondent-Corporation, the Petitioner has filed this petition challenging the said demand. Learned counsel appearing on behalf of the Petitioner submitted that the building was demolished in the year 1996 and the new building was constructed in 2000, and therefore the question of payment of repair cess does not arise and the Petitioner-Society is clearly entitled to get exemption u/s 83(1)(m) of the MHADA Act. It is further submitted that the Respondents have erred in imposing the repair cess by relying upon Section 83(1)(g) and not on Section 83(1) (m). Secondly, it is submitted that it is a settled position in law that if the building is not in existence the Corporation cannot even impose the assessment tax during this period much less repair cess.
Reliance has been placed on judgments of this Court and the Apex Court by the learned counsel appearing on behalf of the Petitioner. Our attention is invited to judgment of the Apex Court in The Municipal Corporation of Greater Bombay Vs. Polychem Ltd., , the judgment of learned Single Judge of this Court in Rialto Co-operative Housing Society Ltd. Vs. Municipal Corporation of Greater Bombay and others, , Division Bench judgment of this Court in Mangesh Janardhan Mohite (President) and Others Vs. State of Maharashtra and Others, . Reliance has also been placed on the judgment of the learned Single Judge of this Court in Pragji Vrindavan Premises Co-operative Society Ltd. and Others Vs. State of Maharashtra and Others,
Learned counsel appearing on behalf of the Corporation has invited our attention to the affidavit filed by the Superintendent working in D-Ward Municipal Office. He has submitted that the Corporation has no power to interfere in the case of payment of repair cess. It is further submitted in the affidavit that the provisions of Section 83(1)(m) of the MHADA Act 1976 is inapplicable. In the affidavit in reply, it is admitted that the Petitioner had demolished the original building for the purpose of redevelopment and during this period the Corporation has assessed the said plot of land, i.e., land under construction. He also pointed out that in view of Section 82(2) of the MHADA Act, the repair cess has to be collected by the Municipal Corporation in the same manner in which the property taxes are collected under the BMC Act. However, it is submitted that the Government alone has the authority to collect the repair cess. It is submitted that in view of the order passed by the Government, the Corporation has addressed the impugned letter dated 9th January 2010.
Despite several opportunities being given, no reply has been filed by the State. The matter was adjourned on several occasions, in order to enable the Government Pleader to address this Court. Though the matter was fully heard yesterday, i.e., on 25th November 2013 and kept for orders at 3.00 p.m. in order to enable the Government pleader to address us on this issue, however, at 3.00 p.m., it was submitted that the matter may be adjourned to 26th November, 2013 at 11.00 a.m. We, therefore, adjourned the matter for orders on 26th November, 2013 at 11.00 a.m., in order to enable the Government pleader to make submissions before the order was passed by us.
Today, the learned Government Pleader appearing on behalf of the State submits that no instructions have been received by him despite several letters have been written to the concerned Officer. He, however, submits that the judgment of the Apex Court in Municipal Corporation of Greater Bombay vs. M/s. Polychem Ltd (supra) is quite clear and squarely covers the point which is raised in this petition.
A short point which falls for consideration in this case is whether the Respondent-Government or the Corporation has an authority or power to impose repair cess when the building has already been demolished and the process of reconstruction has commenced. It is an admitted fact that the repair cess has to be calculated in the same manner as per the provisions of Section 82(2) of the BMC. It is also a settled position in law that the Corporation cannot impose the property tax in respect of building, which is under construction. The Apex Court and this Court on several occasions have reiterated this fact. The ratio of these judgments, on which reliance has been placed by the learned counsel appearing on behalf of the Petitioner, squarely applies to the facts of the present case.
It is not in dispute that the said old building is demolished in the year 1996 and the new building was reconstructed in the year 2000. The provisions of Section 83(1)(m) which clearly attracted in this case, as under:
(1) - The following lands and buildings shall be exempt from payment of the cess, that is to say, -
(m) - all open lands which are not built upon
In our view, therefore, the impugned order will have to be quashed and set aside, in view of the settled position in law. The petition is, therefore, allowed in terms of prayer clause (a) and (b). The circular is set aside to the extent that it grants exemption not from the year 1996, but from the year 2000.