Supreme Court lists Bajaj Auto Property Tax Hearing for July 22, Directs State to Halt Coercive Penalty Recovery [Read Judgement]
The court considered the submission of the petitioner’s counsel that the principal amount of demand of property tax has been paid and only the penalty remains to be paid
Supreme Court – Bajaj Auto – Property Tax Hearing – State – Penalty Recovery – taxscan
Supreme Court – Bajaj Auto – Property Tax Hearing – State – Penalty Recovery – taxscan
The Supreme Court, while entertaining the Special Leave Petition ( SLP), listed the Property Tax hearing on the prayer for interim relief of Bajaj Auto Ltd on 22nd July, 2024
The bench of Justices Abhay S. Okha and Ujjal Bhuyan have directed the state not to take any coercive action against the petitioner Bajaj Auto Ltd for recovery of the penalty amount. The court considered the submission of the petitioner’s counsel that the principal amount of demand of property tax has been paid and only the penalty remains to be paid.
Further, the apex court allowed the applications for exemption from filing a certified copy of the impugned judgment and exemption from filing official translation.
The background of the case based on the Bombay High Court decision is that the Petitioner, a public limited company located in Village Panchayat Jogeshwari, Taluka Gangapur, District Aurangabad, has been regularly paying village panchayat taxes. Additionally, the Petitioner has contributed to the community by providing essential amenities including roads, street lights, drainage lines, water pipelines, sewage treatment facilities, and gardens.
In 1987, the Petitioner and respondent No.6 (the village panchayat) entered into an agreement for a lump-sum contribution in lieu of tax under the Maharashtra Village Panchayats (Payment of Lump-sum Contribution by Factories in Lieu of Taxes) Rules, 1961 ("Rules"). This agreement was renewed on 23.03.2002.
In 2012, a new agreement for a lump-sum contribution was reached between the Petitioner and the village panchayat. However, certain parties unilaterally terminated or repudiated this agreement, leading to further legal challenges. The matter escalated with the Petitioner consistently contesting tax demands and proposing new lump-sum contribution agreements, citing legal precedents and judgments.
The case saw multiple rounds of negotiations, court interventions, and settlements, with both parties presenting arguments regarding the legality and validity of the agreements under the relevant rules. The Petitioner sought to honour the agreements despite changes in legislation, while the village panchayat argued against the existence of valid agreements and maintained the enforceability of tax demands.
The Bombay High Court noted that the issue at hand revolves around whether, upon thorough examination of the law, the matter should be referred back to the Commissioner for a fresh decision. While the disputed judgment has elements of validity, the High Court believed that given its scrutiny of the proposal and agreement's legality and validity, it would be unfitting to send the matter for reconsideration. Consequently, the Court declined the request for a fresh decision, and thus, the Writ Petition was dismissed.
The Bombay High Court observed that “Considering the issue involved in the matter and the desire of the Petitioner to impugn this judgment and order before the Hon'ble Supreme Court, it would be inappropriate to reject the prayer to stay this order.”
Thus, Bajaj Auto Ltd filed an SLP before the Supreme Court which is now listed on 22nd July 2024.
To Read the full text of the Order CLICK HERE
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