Case Law Details
Jalkal Vibhag Nagar Nigam & Ors. Vs Pradeshiya Industrial and Investment Corporation & Anr. (Supreme Court of India)
Conclusion: The nomenclature that the legislature had ascribed to the tax did not determine either the nature of the levy or its true and essential character. The tax had been labelled as the water tax or a sewerage tax simply because it was imposed by the Jal Sansthan constituted under the UP Water Supply and Sewerage Act. That did not alter the nature of the levy which in substance was a tax on lands and buildings within the meaning of Entry 49 of List II of the Seventh Schedule.
Held: The issue arose for consideration was whether the demand of water tax and sewerage tax was sustainable with reference to the provisions of the UP Water Supply and Sewerage Act and whether the State Legislature had the legislative competence to levy the tax under the provisions of Section 52(1)(a). It was held that the nomenclature that the legislature has ascribed to the tax does not determine either the nature of the levy or its true and essential character. The nature of the levy has to be deduced from the nature of the tax, the provision which specifies the taxing event and, as in the case of Section 52, the unit upon which the levy is to be imposed. There could be no manner of doubt that the levy which was imposed under Section 52 was a tax on lands and buildings situated within the area of the Jal Sansthan for the purpose of imposing the tax. The tax was imposed on premises which fall within the territorial area of the Jal Sansthan. The expression ‘premises’ was defined to mean land and building. The tax was on lands and buildings. The nomenclature of the tax did not indicate its true character and substance. Nor did the fact that the law enabled the Jal Sansthan to levy the tax render it a tax on water. The water tax and sewerage tax were taxes levied in order to augment the finances of the Jal Sansthan for the purpose of meeting the cost of its operation, maintenance and services, so as to achieve an economic return on its fixed assets. The collection was ultimately for providing water supply and sewerage in the area of the Jal Sansthan, even if it might not be provided to the particular premises. The tax was imposed on an occupier or owner of the building or land falling within the area of the Jal Sansthan irrespective of whether a connection of water supply or sewerage had been obtained to the land or building. Since the respondent’s premises were located within the area of the appellant’s authority, the respondent was liable to pay the water tax as well as the sewerage tax as the owner and occupier of the premises.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
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