Judgment:
B.C. Verma, J.
1. The petitioner, Steel Authority of India, Limited has set up a township for the residence of persons employed in the Bhilai Steel Plant as also for other allied aminities and facilities like schools, markets, hospitals, etc. This township is divided into several sectors. The buildings are owned by the petitioner. In the year 1964, the Madhya Pradesh State Legislature passed an Act known as the 'Madhya Pradesh Nagariya Sthawar Sampatti Kar Adhiniyam, 1964 (No. 14 of 1964)' (hereinafter referred to as 'the Sampatti Kar Adhiniyam'), to apply to all 'urban areas' having population of 10,000 and above according to last census and included within the limits of a local authority and to any other area of commercial or industrial importance having population of ten thousand or above according to the last census. By notification dated 30th January, 1967 'Bhilai Nagar Industrial Township in Durg District' was declared 'urban area' of commercial and industrial importance as defined under Section 2(h) of the Sampatti Kar Adhiniyam. The buildings and lands falling within the limits of this township were assessed to property tax in exercise of powers under Section 4 of the Sampatti Kar Adhiniyam for the years 1966-67, 1967-68 and 1968-69. For this purpose, the annual letting value of the buildings was assessed at Rs. 88,21,867.50 paise per year and the tax assessed was Rs. 9,30,865.87 paise. A total demand of Rs. 27,92,597.61 paise was raised against the petitioner as proposed tax for the said buildings and lands for the aforesaid three years. A challenge was laid to this levy on the ground that the notification declaring the township as 'urban area' applying the Sampatti Kar Adhiniyam to that area was wrong and that the tax was assessed on higher side. Partial relief was granted to the petitioner by the appeal Court, vide Annexure-N and annual letting value was reduced to Rs. 61,22,069.53 paise and the tax was reduced to Rs. 5.02,339.53 paise. A revision before the State Government against the appellate order proved abortive and for the years 1969-70, 1970-71 and 1971-72 property tax was levied at this rate. The challenge was persued before the High Court and this time successfully. The notification was struck down as vague and the levy of tax was struck down prospectively. (Hindustan Steel Limited, Ranchi v. State of M.P., M.P. No. 321 of 1972, decided on 4-9-1980 : 1984 MPLJ 92. Counsel told the Court that the matter is now before the Supreme Court and is awaiting decision.
2. The Madhya Pradesh Legislature enacted yet another Act providing for planning and development and use of land. This Act is styled as the 'Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973 (Act No. 23 of 1973) (hereinafter referred to as 'the Nivesh Adhiniyam'). Sub-section (s) of Section 2 of the Nivesh Adhiniyam describes 'special area' to mean a special area designated as such under Section 64, and sub-section (t) of Section 2 defines 'Special Area Development Authority' to mean an authority constituted under Section 65. Consequent upon the enforcement of the Nivesh Adhiniyam, the State Government, by a notification dated June 7, 1973, designated Bhilai -- Durg area as Special Area to be known by the name 'Bhilai-Durg Special Area' and an authority was also constituted to be known as 'Special Area Development Authority, Bhilai-Durg' (hereinafter to be referred as SADA). This authority apart from functions enumeratedunder Section 68 of the Nivesh Adhiniyam is also clothed, for the purpose of Municipal administration, with the same powers which the Municipal Council has under the Madhya Pradesh Municipalities Act, 1961 or under the Municipal Corporation Act, 1956. By notification dated June 7, 1973 (Annexure-A), the limits of Bhilai-Durg Special Area were notified. This was followed by yet another notification dated January 23, 1974 (Annexure-B). Limits of SADA were altered and certain areas were excluded. This was re-revised by notification dated September 10, 1976 (Annexure-C). It appears that the petitioner authority experienced that it was subjected to dual municipal administration including the levy of property tax on the buildings owned by it within the area included in the SADA and made efforts to solve the problem. A meeting of the representatives of the Government, the petitioner, Commissioner Raipur Division and the Housing Commissioner was held on 11-11-76. The minutes of the meeting so held are contained in Annexure-D. Consequently an agreement (Annexure-F) was executed on 12-10-1977 between the Managing Director, Bhilai Steel Plant Limited and the Chairman, Special Area Development Authority. The relevant terms of the Agreement are:
'3. It has been agreed that aforesaid land shall be transferred to on the following terms and conditions:
(i) The Authority shall pay to the Company the acquisition cost paid by the Company plus 5% Establishment charges over this amount and development charges incurred, if any in five annual instalments commencing from the 1st April next following the date of this agreement.
XXX XXX XXX
(XI) The Company shall maintain the civil services for the Company's quarters and other Company buildings in the area as in Para 2 which is proposed to be transferred to the Authority. Till suitable arrangements are made by the Authority to take over the services, the Authority will not enforce taxation in any form for these residential units and other Company buildings.
4. The Company having further agreed to pay annually for a period of five years to the Authority, the sum of Rs. 3 lakhs by way of grant-in-aid towards the development of the area to be so transferred and the sum of Rs. 5 lakhs in lieu of exemption from levy of property tax over its property to the Authority. The Authority on its part exempts the Company from payment of property tax leviable by it on the properties of the Company under Section 69 (c) and (d) of the M.P. Nagar Tatha Gram Nivesh Adhiniyam, 1973 (23 of 1973) read with Section 135 of the Madhya Pradesh Municipal Corporation Act, 1956 (23 of 1956) as amended from time to time. After the expiry of five years, this clause will be mutually reviewed by the Authority and the Company.
5. The company shall provide and maintain civic services to the whole area lying south of the main G.E. Rly. line comprising the Bhilai Township extending from Sector-1 to X including Indira Place (Civic Centre), Hospital Sector, Talpuri, Amdi Bhata, Bhilai House and the Plant operation area and Khursipara Zone-I, II & III lying north of G.E. Road where separate sectors for the workers of the Company are provided.
6. The Company having agreed to transfer major portion of the land acquired by it to the north of Main S.E. Railway Line (including the land in between C.E. Road and S.E. Railway line) except Khursipara zones-I, II, III and the lands mentioned in Annexure VIII, the Authority shall make available to the Company land in its area in case any need is felt to rehabilitate the persons from company's Township area which may be recruited for future expansion of the Township and Plant.'
According to the petitioners, this agreement Annexure-F has been acted upon. Consequently, land in certain area as mentioned in the agreement has been transferred to SADA by the petitioner, vide a deed dated 4-4-1978 Annexure R-3 filed with the return, The petitioner maintained the civic services and made the annual payment as agreed. Prior to this agreement, demand for payment of property tax was raised by SADA against the petitioner for the year 1976-77, vide Annexure-G which was later on revised by Annexure G-1. Objections to this demand were raised by the petitioner, vide Annexure-H. This demand was not pressed in view of the agreement Annexure-F. For the years 1977-78 and 1978-79, the parties are said to have acted upon the agreement and the SADA accepted the amount paid by the petitioner as per the agreement and did not levy or charge any property tax. However, for the subsequent years, the SADA determined the annual letting value and assessed property tax with effect from 1-7-1979 at the rate of 20 per cent 'of the annual letting value so determined. The allegation is that even in so doing, unit of the assessment has been taken as 'one sector' and not 'building'. To this demand, petitioner filed objections, vide Annexure-J. The demand was attacked as being vague, contrary to clause 4 of the aforesaid agreement and want of the notice of demand on proper person, viz., Steel Authority of India Limited (SAIL). Further, objections were added vide Annexure-J-1. It was asserted that the levy of tax was not in the prescribed manner, no municipal services were rendered and, therefore, the SADA was not entitled to assess and collect property tax and that the petitioner being a Government company was not liable to pay any property tax. The objections were rejected vide order Annexure-K dated 8-2-1980. Against the rejection of these objections, the petitioner filed appeal before the District Judge under Section 149 of the M.P. Municipal Corporation Act. The appeal was dismissed vide order Annexure-M dated 10-10-1980. The petitioner seeks to challenge by this petition under Article 226 of the Constitution of India, the assessment of property tax over the buildings and lands comprised in the area and the order Annexure-K dated 8-2-1980 rejecting the objection as also order Annexure-M passed by the District Judge Dismissing the petitioner's appeal against the order Annexure-K.
3. We may first dispose of the petitioner's contention that no building or land held by the petitioner, which is a Government company, is liable to be assessed to property tax as the said land and the building should be taken as the property held by the Central Government. Similar contention has been repelled by a Division Bench of this Court in Bharat Aluminium Company Ltd. v. Special Area Development Authority, Korba 1979 MPLJ 344 : (1978 Tax LR NOC 182). The view taken is that the Government Company incorporated under the Companies Act owning property has a legal entity of it's own and, consequently, such property is not exempt from assessment of the property tax. Such a company cannot be equated with Union Government and that it is not a case where the corporate veil can be lifted. The Division Bench further observed that there is nothing in the Nivesh Adhiniyam or the Madhya Pradesh Municipalities Act or the Madhya Pradesh Municipal Corporation Act which may enable the Court to hold that the property held by such company is owned by the Union Government contributing entire share capital. This view has been affirmed by the Supreme Court in Western Coal-fields Ltd. v. Special Area Development Authority, Korba, AIR 1982 SC 697, and so far as this Court is concerned, this point thus stands concluded. Shri Chhapekar, learned counsel for the petitioners, informed the Court that the matter has been re-agitated before the Supreme Court and the decision is awaited. Be that as it may, in view of the decision of this Court affirmed by the Supreme Court, as aforesaid, the point has to be decided against the petitioner and the contention is, accordingly, rejected.
4. We may at this stage only consider a preliminary objection raised by the respondents that the order of the District Judge dismissing the petitioner's appeal is revisable under Section 392 of the Municipal Corporation Act and in view of this alternative remedy available to the petitioner, this petition be dismissed. Suffice it to say that a notice of this petition was issued to the respondents, detailed return with annexures, i.e., voluminous documents, has been filed, the matter is pending before this court since the year 1981 and the questions raised are of general importance. We, therefore, do not think that at this stage it shall be just to throw out the petitioner's case only because of the availability of such remedy even if a revision is held to be a remedy as held by this Court in Kailash-chandra v. D.J. Bhopal, 1963 MPLJ 270 : (AIR 1963 Madh Pra 218). This preliminary objection is, therefore, rejected.
5. This leads us to the consideration of yet another contention, half-heartedly pressed by the learned counsel for the petitioner. The contention is that since in terms of agreement Annexure-F, it is the petitioner who is liable to render civic services in the area where the house and lands are situated, the respondent SADA is not entitled to levy and collect any property tax from the petitioner in respect of those buildings and lands. Learned counsel, however, very fairly did not dispute that what was imposed as property tax is not a fee but is essentially a tax. It was also not disputed, and indeed could not be disputed in view of Secti6n 69 of the Nivesh Adhiniyam read with Section 32 of the Municipal Corporation Act that the SADA has a right to impose property tax over the lands and buildings in question which fall within the jurisdiction of that special area and also within the limits of the Municipal Corporation. A Division Bench of this Court in Hindustan Steel Limited, Ranchi v. State of M.P. 1984 MPLJ 92, has expressed that where the Sampatti Kar Adhiniyam applies the buildings situated in that area are liable to be assessed to property tax. Once it is conceded that what is assessed and demanded is a tax (property tax), question of rendering any services realy does not arise. In State of Maharashtra v. Salvation Army AIR 1975 SC 846, the observations are that a tax is a compulsory exaction of money by a public authority for a public purpose enforceable by law and is not a payment for any specific service rendered. The tax is for the purpose of general revenue which after collection becomes part of public revenue and an element of quid pro quo between the tax payer and the public authority need not exist. Learned counsel placed reliance upon a decision of Delhi High Court in Man Mohan Tuli v. Delhi Municipality, AIR 1983 Delhi 152. Some observations in that decision do support the contention advanced. The view taken is that it is the beneficial enjoyment of the property which is subjected to taxation and for the purposes of property tax the nexus is functional and not physical or merely territorial. The territorial jurisdiction and the taxation jurisdiction need not always be con-terminus. It was observed that in a given case it may not be possible for the municipal authorities to extend its functions/administration to the farthest end of its territory. In that event, the right to collect and assess property tax shall have to be denied to the municipal authorities. In that case, it was as a fact, found that the disputed property (which was sought to be subjected to property tax under the Delhi Municipal Corporation Act, 1957) as a corporeal entity was in Delhi, in Strict legal sense it was not the property that was in Delhi but only the res fell within the limits. It was, therefore, held that in that situation, the property could not be taxed to property tax as the incidence of property tax under the Act falls on rights of possession and enjoyment of the property and not merely on the corporeal or physical entity. All the same, the right of the Municipal Corporation to assess and collect the property tax in respect, of properties situated within the Municipal Corporation was not negatived. The decision turned on a finding that although the property physically fell within the Corporation limits but no municipal services were extended nor were enjoyed by the holders of those properties. In the instant case, respondents have alleged that in the entire area falling within the jurisdiction or the SADA and forming part of special area, the SADA is rendering all municipal services and discharging obligations under the Nivesh Adhiniyam. That being so, the respondent SADA is really entitled to assess and collect properly tax over the lands and buildings falling within the special area in question. The question whether in view of the agreement Annexure-F, this entitlement ceases or is suspended so far as the agreement is in force, shall be dealt within later part of this order.
6. We now proceed to consider the attack on the procedural aspect of the assessment and demand of the tax in question. The principal contention in this regard is that the valuation of the property determined for earlier years is to remain in force for all subsequent years of assessment unless it is revised in accordance with the procedure prescribed. It was added that the same procedure which is followed for the initial assessment and collection of property tax has to be followed when the market value of the property and the consequent assessment of property tax are to be revised. The subject 'Taxation' falls under Chapter XI of Part IV of the Municipal Corporation Act. Section 135 of the Corporation Act permits from the financial year 1976-77 levy of a tax on lands and buildings within the city at specified rates. For this purpose, annual value of land or building has to be ascertained in accordance with Section 138. According to Section 139. the commissioner may by written notice require the occupier of any land or building to submit within 15 days the names and address of owner of such land or building. According to Section 143, the annual value of land or building situated within the city as determined under the Sampatti Kar Adhiniyam and in force before the Corporation Act came into force, shall be the annual value for the assessment of property tax until such time as the Commissioner makes a fresh valuation and determines annual value under the Corporation Act. Such value determined shall be the value for the period of one year and may be revised thereafter by the Commissioner at the termination of successive period of one year. For the purpose of enabling the Commissioner to prepare an assessment list, the Commissioner may solicit from the occupier or the owner of the building certain information on the items mentioned in Section 144. Section 146 entitled the occupier of the building to a special notice when the Commissioner values the land or building for the first time or when the valuation of any land or building previously valued is increased under Section 143. Such notice shall contain grounds for the increase. Section 147 permits a person dissatisfied with the valuation so made to raise an objection stating the grounds of his objection to such valuation. Section 148 casts an obligation upon the Commissioner to enquire into such objections after entering them into a register for the purpose and the objector is entitled to a hearing. Section 149 provides for an appeal to the District Court against the decision of the Commissioner disposing of the objection to the proposed assessment. According to Section 150, the valuation made by the Commissidner under Section 143 is final subject to the provisions of Sections 148 and 149.
7. The principal objection raised by the petitioner in this regard is summarised in paragraph 19 of the petition. The challenge is that the notice under Section 146 was not served on the proper authority, that it does not give details of the buildings or lands assessed and that the annual letting value fixed by the property tax commissioner under the Sampatti Kar Adhiniyam could not have been altered without following the procedure prescribed under Section 143 and 144 of the Act. These objections were rejected by order dated 8-2-1980 passed by the Chief Executive Officer SADA, vide Annexure-K. The Chief Executive Officer has observed, that the property of the Bhilai Steel Plant is managed by the Chief Town Inspector on bahalf of the Managing Director and, therefore, the notice served on him was valid. We are in agreement with this view for an additional reason that ultimately the objections were filed, the petitioner was heard and that the objections were decided on merits. At the same time, from that order, we notice that the only objection pressed at the time of hearing before the Chief Executive Officer related to the agreement Annexure-F, contention being that in view of that agreement, the demand could not be raised. That however, is a separate issue which we shall deal with later. In the memorandum of appeal filed against that order before the District Judge, no grievance is made that other objections were also pressed into service before the Chief Executive Officer SADA at the time of arguments and that he failed to consider those objections. It is, however, true that in that memorandum of appeal, it is urged that the annual letting value determined by the Property Tax Commissioner under the Sampatti Kar Adhiniyam could not have been altered without following the provisions under sections 143 and 146 of the Corporation Act. From the appellate order (Annexure-M), it is also apparent that this objection was not persued before the appellate authority (the District Judge, Durg). In the present petition, however, grievance is made that the District Judge did not consider this particular objection relating to non-observance of the provisions of Sections 143 and 146 of the Corporation Act, although it was pressed before him. The District Judge, however, has opined that sufficient details of the property so assessed to property-tax were mentioned in that notice. A printed copy of that notice was placed before us at the time of hearing. It indicates that sufficient details of the property were furnished. We may also mention that the petitioner was asked to furnish the details of the property held by it. No such information was furnished and, therefore, the SADA proceeded to assess the property-tax on the basis of the information acquired by the SADA by making a survey of the property.
8. Learned counsel for the respondent submitted that since the petitioner did not press into service objection relating to non-observance of the provisions under Sections 143 and 146 of the Corporation Act, he should not be permitted to raise the same in this Court now. There does appear force in this contention. We have mentioned above that there is no mention in the memo of appeal filed before the District Judge that the Chief Executive Officer, SADA omitted to decide certain objections pressed before him. It, therefore, appears probable that after having access to the records of the SADA (the return says that the petitioner's officers were permitted an access to those records), the objection relating to procedure was really not pressed.
9. Even if this objection is considered, we find that it is groundless. It appears from Annexure-I, which is a notice dated 3-5-1979, that the petitioner was given notice of the re-determination of the annual letting value and the proposed assessment of tax. Objections were invited. The return shows that the entire record of this revaluation was not only made available to the officers of the petitioner but those officers actually looked into that record and it is then that they made objections which were heard and decided, as aforesaid. To us, this appears to be sufficient -- Compliance of the aforesaid provisions. For this reason, no valid challenge can be made to the assessment of property-tax on this count.
10. The ultimate attack to the assessment and demand of property tax is based upon the agreement Annexure-F, contention being that the SADA is, estopped from demanding property-tax contrary to and in derogation of the terms of that agreement. Before considering this plea, we wish to make it clear that Clauses (3) and (5) of the agreement do not exempt the petitioner from payment of property tax. Indeed, while Section 69 of the Nivesh Adhiniyam empowers the SADA to exercise same powers which the Municipal Corporation may have for the purpose of municipal administration, it does not permit SADA to exempt any property from payment of property tax. Sections 162 and 163 of the Municipal Corporation Act alone permit exemption from payment of property tax for certain duration. We, however, find it difficult to agree that Section 69 of the Nivesh Adhiniyam also entitles the SADA to exercise functions and jurisdiction as the Municipal Corporation and the Government may exercise under Sections 162 and 163 of the Corporation Act. What may be inferred from Clauses (3) and (4) of the agreement is that on payment of Rs. 5 lacs, the petitioner shall not be liable to pay the amount of property tax that might be assessed on the buildings and lands held by it within special area for a period of five years. The parties were then left to review the terms of that clause mutually.
11. Question, however, is whether during the period of five years of that agreement the SADA can recover the property tax actually assessable or assessed on the buildings and lands held by the petitioner. Here the rule of promissory estoppel has its play. Overruling its earlier decision in Jeet Ram v. State of Haryana, AIR 1980 SC 1285, the Supreme Court in Union of India v. Godfrey Philips India Ltd., AIR'1986 SC 806, held that the doctrine of promissory estoppel is applicable against the Government in the exercise of its governmental, public or executive functions and the doctrine of executive necessity or freedom of future executive action cannot be invoked to defeat the applicability of the doctrine of promissory estoppel. The doctrine of promissory estoppel being an equitable doctrine, it must yield when the equity so requires. It was observed that the basis of this doctrine is the interposition of equity which has always, true to its form, stepped in to mitigate the rigour of strict law. Such promissory estoppel can also found a cause of action and is not limited in its application only to defence. At the same time, it was also observed that the promissory estoppel cannot be used to compel the Government or a public authority to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make. If it can be shown by the Government or public authority that having regard to the facts as they have transpired, it would be inequitable to hold the Government or public authority to the promise or representation made by it, the Court would not raise an equity in favour of the person to whom the promise or representation is made. In such a case, the doctrine of promissory estoppel would be displaced. Somewhat similar observations were made by the Supreme Court in a subsequent decision, in Delhi Cloth & General Mills Ltd. v. Union of India, AIR 1987 SC 2414, when their lordships in paragraph 25 of the judgment observed as follows:
'It is, however, quite fundamental that the doctrine of promissory estoppel cannot be used to compel the public bodies or the Government to carry out the representation or promise which is contrary to law or which is outside their authority or power. Secondly, the estoppel stems from equitable doctrine. It, therefore, requires that he who seeks equity must do equity. The doctrine, therefore, cannot also be invoked if it is found to be inequitable or unjust in its enforcement.'
Again, in Assistant Commr. Commercial Taxes (Asst.) v. Dharmendra Trading Co. AIR 1988 SC 1247, the observations are that if the Government wants to resile from a promise or an assurance given by it on the ground that undue advantage was being taken or misuse was being made of the concessions granted, the court may permit the Government to do so, yet before allowing' the Government to resile from the promise or go back on the assurance the Court would have to be satisfied that allegations by the government about misuse being made or undue advantage being taken of the concessions given by it were reasonably well established. Earlier, in M.P. Sugar Mills v. State of U.P. AIR 1979 SC 621, it is ruled that it is riot necessary, in order to attract the applicability of the doctrine of promissory estoppel, that the promisee, acting in reliance on the promise, should suffer any detriment. What is necessary is only that the promisee should have altered his position in reliance on the promise.
12. Examined in the light of principles so laid down by the apex Court of this Country in its various decisions, we are of the opinion that the plea based upon the principle of promissory estoppel must succeed. It is clear from the agreement Annexure-F that in lieu of property tax that could be assessed on the buildings and lands held by the petitioner, a sum of Rs. 5 lacs per year was agreed to be paid. At the same time, the petitioner agreed to provide and maintain civic services over a large area falling within the special area which otherwise have to be discharged by the respondent SADA. An additional amount of Rs. 3 lacs was agreed to be paid as grant-in-aid towards development. Major portion of the land acquired by the petitioner was agreed to be transferred to the SADA. It is not denied that the petitioner company has discharged all its liability under the agreement Annexure-F and has executed a registered deed of conveyance of its property as mentioned in the agreement. This deed of conveyance was duly registered and is exhibited as Annexure R-3 with the return. It is not the case of the SADA that the concessions so granted to the petitioner under the agreement have been misused or that the petitioner has derived any undue advantage. Instead, as we have seen above, the petitioner has acted Upon the agreement and altered its position by making transfer of its properties, rendering civic services and by payment of an amount of Rs. 3 lacs for development. We are unable to agree with the learned counsel for the SADA that' on execution of deed of conveyance Annexure R-3, the agreement Annexure--F merged into that deed of conveyance and has thus lost its efficacy. Instead, in our opinion the execution of deed of conveyance is only a step towards implementation of the terms of that agreement Annexure-F.
13. For the aforesaid reasons, this petition succeeds and is allowed. The demand of property fax contained in notice dated 3-5-1979 (Annexure-I), order dated 8-2-1980, passed by the Chief Executive Officer, SADA (Annexure-K) arid the appellate order dated 10-10-80 (Annexure-M) are hereby quashed. There shall be no order as to costs. Security amount be refunded to the petitioner.