Property Tax Is First Charge On Property; Auction Purchaser Liable To Pay It Before Sale: Calcutta High Court

The Calcutta High Court has held that property tax is a first charge on property and the auction purchaser is liable to pay property tax prior to sale. The bench stated that where a statutory first charge is created on the property, such as in respect of property tax under Section 232 of the Kolkata Municipal Corporation Act, 1980, the municipal authority is entitled to enforce such charge independently in accordance with the statutory mechanism provided therein. In such a situation,...

White Petroleum Jelly Classified As 'Drug', Not Cosmetic; Higher VAT & Entry Tax Not Leviable: Madhya Pradesh High Court

The Madhya Pradesh High Court stated that White Petroleum Jelly is classified as a 'Drug', not 'Cosmetic', and therefore is not liable to higher VAT and Entry Tax. Justices Vivek Rusia and Jai Kumar Pillai stated that a White Petroleum Jelly of IP grade manufactured and sold by appellant under a valid drug licence is liable to be classified as a category of drug and medicine under Entry 19-A of Part II, Schedule II of the MP VAT Act. It was the case of the assessee/appellant that...

Vehicles Plying Only Within Enclosed Premises Of Factory/Plant Not Liable To Pay Motor Vehicle Tax : Supreme Court

The Supreme Court on Friday (Aug. 29) ruled that the vehicles operating exclusively within the enclosed premises of a factory or plant are not liable to pay motor vehicle tax, as such areas do not constitute a "public place." “Motor vehicle tax is compensatory in nature. It has a direct nexus with the end use. The rationale for levy of motor vehicle tax is that a person who is using public infrastructure, such as, roads, highways etc. has to pay for such usage. Legislature has consciously used...

Rajasthan High Court Quashes Challenge Against State Amendment Imposing New Motor Vehicle Tax On “Sleeper Bus”

The Rajasthan High Court rejected the challenge made to an amendment brought in by the Transport Department by which a new category of “sleeper bus” was added for levying motor vehicle tax, taking it out from the previous category without qualifying it for the exemptions available under other categories.The division bench of Justice Vinit Kumar Mathur and Justice Anuroop Singhi held that the “bus” fell in the definitions under Sections 2(7) and 2(29) of the Rajasthan Motor Vehicles Act,...

No Violation Of Article 14 In Denying Property Tax Exemption To Unaided Schools: Kerala High Court

The Kerala High Court stated that there is no violation of Article 14 in denying property tax exemption to unaided schools. Justice Ziyad Rahman A.A. stated that the fact that the Government owned, managed and aided schools are established by the Government at their funds in order to provide education to all classes of persons by collecting nil or meagre fees, is a crucial factor which distinguishes such establishments from an unaided school, where fees is collected from the students...

MP Entry Tax Act | Manufacturers Liable For Entry Tax As They “Cause Entry” Of Liquor Into Local Areas : Supreme Court

The Supreme Court upheld the MP High Court's decision to levy the 'entry tax' on the beer and Indian Made Foreign Liquor (“IMFL”) manufacturers for transporting goods into local areas for sale. The Court reasoned that the liquor manufacturers "cause entry" of goods into local areas, making them liable for tax under Section 2(3) of the Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 (“M.P. Entry Tax Act, 1976”), even if sales occur through state-controlled warehouses. ...

Property Tax Can't Be Levied Without Following Statutory Assessment Procedure U/S 233 Of Kerala Municipality Act: High Court

The Kerala High Court stated that property tax can't be levied without following statutory assessment procedure under Section 233 of Kerala Municipality Act, 1994. Section 233 of the Kerala Municipality Act, 1994, deals with the levy of property tax by the Municipality on buildings and lands within its area. This section outlines the process of assessment and collection of property tax, specifying that it should be levied in accordance with the Act and prescribed rules. Justices ...

Gram Panchayat Cannot Levy Property Tax On Industrial Establishment Within Notified Industrial Areas: Karnataka High Court

The Karnataka High Court has held that the Gram Panchayat cannot levy or collect property taxes in respect of Industrial establishments located within areas notified by the Karnataka Industrial Areas Development Board (KIADB). Mere execution of a lease-cum-sale agreement or any administrative communication cannot vest power in the Gram Panchayat to levy tax in the absence of express delegation or statutory backing.Justice Sachin Shankar Magadum held thus while allowing a batch of petitions and...

Occupancy Certificate Not Final For Plinth Area Determination: Kerala High Court Upholds Luxury Tax U/S 5A Of Kerala Building Tax Act

The Kerala High Court stated that occupancy certificate not final for plinth area determination under Section 6 of the Kerala Building Tax Act. Justice Ziyad Rahman A.A. was addressing the issue where challenge raised by the assessee was against the assessment of building tax and luxury tax, by mainly placing reliance upon Occupancy Certificate. Section 5A Of Kerala Building Tax Act imposes luxury tax on residential buildings that exceed a certain plinth area threshold. Section ...

Ad Tax Cannot Be Imposed On Educational Institutions For Putting Up Non-Commercial Signages On Their Property: Karnataka High Court

The Karnataka High Court has set aside an advertisement tax demand notice issued by the Bruhat Bengaluru Mahanagara Palike (BBMP) to an educational institution for displaying non-commercial signage and boards on its own property.Justice Sachin Shankar Magadum held thus while allowing the petition filed by BS Gupta, Secretary of Gupta Education Trust, who had challenged the legality/validity of the order issued by BBMP, under Section 134 of the Karnataka Municipal Corporation Act, 1976. The court...

Luxury Tax U/S 5A Of Kerala Building Tax Act Is Constitutionally Valid, However, Demand Beyond 3 Years Is Unsustainable: Kerala High Court

The Kerala High Court stated that luxury tax under Section 5A Of Kerala Building Tax Act is constitutionally valid post 101st Amendment to the Constitution but a demand that extends to more than three years prior to the date of the demand notice cannot be legally sustained. Justices A.K. Jayasankaran Nambiar and P.M. Manoj opined that “Entry 49 of List II of the 7th Schedule to the Constitution deals with 'taxes on lands and buildings' and so long as the charge under Section 5A of the...

Eden Gardens Not A 'Public Street', Imposing Ad Tax Without Regulations Violates Rule Of Law: Calcutta High Court Quashes Demand Notice

The Calcutta High Court bench of Justices Arijit Banerjee and Justice Kausik Chanda has held that without framing Regulations or without the budget estimate prescribing the rates at which advertisement tax may be levied by Kolkata Municipal Corporation (KMC), computation and imposition of such tax would be arbitrary. It would have no rational basis. It would then be open to KMC to quantify such tax as per its sweet will, which cannot be countenanced under the rule of law.Brief Facts:Cricket...