DR. S.P. MUKHERJEE CIVIC CENTRE v. MOON STEELAND GENERAL INDUSTRIES PVT. LTD

entire building comprising of the basement, ground floor, first floor and second floor of the property in question to M/s Wipro Ltd., an Information Technology/Information Technology Enabled Services (IT/ITeS) Company. In furtherance of the same, the respondent-assessee executed a lease deed dated 01.02.2012, and the same was registered on 17.02.2012.

6. The tenant was also granted a licence under Section 416/417 of the Delhi Municipal Corporation Act, 1957 (DMC Act), vide Factory Licence Certificate dated 16.08.2012 to run ITeS from the property in question.

7. The respondent-assessee paid property tax in respect of the subject property on the basis of self-assessment regularly for ‗industrial use‘. The Corporation then served a notice dated 19.11.2013, under Section 123D of the DMC Act, intimating the respondent-assessee that the property is being used for non-industrial activities and asked the respondent-assessee to appear before the Corporation through its Authorised Representative, on

06.12.2013.

8. The respondent-assessee responded to the said notice, vide letter dated Signature Not Verified Signed By:AMIT KUMAR SHARMA Signing Date:23.05.2025 15:21:50 7 Signature Not Verified Signed By:PURUSHAINDRA KUMAR KAURAV

02.12.2013, informing that it had leased out the subject property to M/s Wipro Ltd., which has been using the same for IT/ITeS, which, according to the respondent-assessee, was classified as ‗industrial building‟. It was the case of the respondent-assessee that no commercial activity was being carried out and certain documents were also filed. The respondent-assessee reiterated its stand with respect to the subject property in its letter dated

16.02.2015.

9. Thereafter, vide an ex-parte assessment order dated 21.10.2015, the assessor and Collector/SDMC, held that IT/ITeS did not qualify as ―Industry‖ and the definition of ―Industry‖ under the Master Plan for Delhi, 2021 (MPD, 2021) has no bearing on the definition of ―industrial building‖ under the DMC Act. The assessor and Collector rejected all the contentions of the respondent-assessee and assessed the building as a ―business building‖ and consequently, raised the property tax demand to the tune of Rs.1,91,90,627/-

10. The respondent-assessee, aggrieved by the said assessment order, sought correction of the said assessment, vide letter dated 09.11.2015 on various grounds. The Corporation then issued a notice dated 01.12.2015 under Section 123B(9)/123D(d) of the DMC Act and directed the respondent to appear before the Assessing Authority on 11.12.2015 to show cause why a penalty should not be imposed.

11. The respondent-assessee, vide letter dated 10.12.2015, again contended that the subject property being used for IT/ITeS will fall under the definition of ‗industrial building‘ and not under the definition of Signature Not Verified Signed By:AMIT KUMAR SHARMA Signing Date:23.05.2025 15:21:50 8 Signature Not Verified Signed By:PURUSHAINDRA KUMAR KAURAV ―business building‖. The Assessor and Collector, on considering the said stand, granted a rehearing of the matter.

12. On rehearing, the Assessing Authority passed a rectification assessment order dated 19.02.2016, thereby, partly allowing the contention of the respondent-assessee, with respect to the payment of the property tax prior to 20.07.2011 with Use Factor ‗4‘. The Assessing Authority fixed the annual value at Rs 1,79,52,870/- and also levied a penalty at the rate of 30%. Aggrieved by the same, the respondent-assessee preferred appeals under Section 169 of the DMC Act before the MTT.

13. The MTT vide impugned order dated 21.02.2021 found substance in the submissions made by the respondent-assessee and came to the conclusion that IT/ITeS would fall within the definition of ‗Industrial Building‘ and therefore, the appeals were allowed. The order of assessment, rectification order and the consequent demand/distress warrant etc. came to be set aside.

14. Aggrieved by the same, the Corporation has approached this Court by way of present writ petitions under Article 227 of the Constitution of India.

15. Ms. Sunieta Ojha, learned counsel for the Corporation, made the following broad submissions:- i. The impugned orders passed by the MTT are illegal and improper as they suffer from material perversity inasmuch as the MTT has failed to consider that the property tax is exclusively governed by the provisions of the DMC Act and the provisions of the Delhi Signature Not Verified Signed By:AMIT KUMAR SHARMA Signing Date:23.05.2025 15:21:50 9 Signature Not Verified Signed By:PURUSHAINDRA KUMAR KAURAV Development Authority Act, 1957 will have to operate in a different sphere. ii. She submits that as per Section 116 A (1)(f) of the DMC Act, ‗business building‘ and ‗industrial building‘ are two distinct Use- Wise categories and according to her, the activity would constitute ‗business building‘ and therefore, Use Factor-4 would be attracted, whereas, had it been ‗industrial building‘, Use Factor-3 would have been attracted. The respondent-assessee in their self-assessment wrongly applied Use Factor-3, resulting in a significant loss of revenue to the petitioner. iii. She further submits that the properties in question are occupied and used by companies providing IT/ITeS, Business Processing Outsourcing/ Knowledge Process Outsourcing, which are essentially office premises having workstations from which employees are working, conference halls, cafeterias, parking facilities therefore, it would squarely fall under the definition of ‗business building‘ given in the bye laws. By relying on Section 9(b)(i) of the DMC (Property Taxes) Bye Laws, 2004, she contends that the activities of the respondent-assessee would squarely be covered under the definition of ‗business building‘. iv. She further asserts that the taxing statute should be interpreted strictly and a greater latitude to be conferred to the legislature in formulating its tax policy either directly or by delegated legislation. By placing on record a detailed affidavit encapsulating the nature of activities undertaken by the respondent-assessee on the premises of the property in question, she contends that the same would be Signature Not Verified Signed By:AMIT KUMAR SHARMA Signing Date:23.05.2025 15:21:50 10 Signature Not Verified Signed By:PURUSHAINDRA KUMAR KAURAV covered under the definition of ‗business building‘ and not ‗industrial building‘. v. She further contends that the MTT wrongly placed reliance on the MPD 2021 and the Industrial Policy of GNCTD, in as much, as the scope of the same is limited to ‗permitting‘ such industries to operate from Industrial Areas. According to her, it does not amount to giving any concession or exemption from the payment of property tax, which is a matter governed by the DMC Act. vi. In order to buttress her submissions, she has placed reliance on the decisions of Harsh Vardhan Bansal Vs. East Delhi Municipal Corporation and Anr. 1, Delhi International Airport (P) Ltd., Vs. South Delhi Municipal Corporation2, M/s Saraswati Sugar Mills and Ors. Vs. Haryana State Board and Ors3 and Municipal Corporation of Hyderabad Vs. P.N. Murthy and Ors.4.

16. Per contra, Mr. Manik Dogra, learned senior counsel, Mr. Deepak Vohra and Mr. Nishant Gupta, learned counsel, appearing for the respondents-assesses in various writ petitions, vehemently oppose the submissions made by the petitioner. They jointly made the following broad submissions:- i) At the outset, they submit that the scope of this Court under Article 227 of the Constitution of India is highly circumscribed to keep the subordinate Courts and Tribunals within the bounds of their 12024 SCC OnLine Del 7926 2 2020:DHC:3102-DB 31991 SCC OnLine SC 279 41987 SCC OnLine SC 86 Signature Not Verified Signed By:AMIT KUMAR SHARMA Signing Date:23.05.2025 15:21:50 11 Signature Not Verified Signed By:PURUSHAINDRA KUMAR KAURAV authority and to see that they do the duty expected or required by them in a legal manner. To buttress their submissions, they relied on the decision of Estralla Rubber Vs. Dass Estate (P) Ltd.5 and Garmet Craft Vs. Prakash Chand Goel6. ii) According to them, so long as the findings of the subordinate Courts/Tribunals are shown to be palpably wrong or demonstrably perverse, this Court under Article 227 of the Constitution of India does not exercise supervisory jurisdiction. According to them, there is no such perversity or illegality, much less palpable illegality. iii) According to them, bye-law 9(e) of the DMC (Property-Taxes) Bye- Laws, 2004 is inclusive in nature, and the use of the word ―include‖ would demonstrate that the definition is ‗inclusive‘ and not ‗exhaustive‘. With respect to the definition as to whether the same is ‗inclusive‘ or ‗exhaustive‘, reliance is placed by the respondent on a decision ESI Corporation Vs. High Land Coffee Works7, RamalaSahkari Chini Mills Limited Uttar Pradesh Vs. Commissioner, Central Excise, Meerut-1 Meerut8. In order to substantiate the argument that IT/ITeS companies are to be treated as an industry, reliance is placed on a decision of this Court in the case of Panacea Biotec Ltd. Vs. D.D.A. Anr.9.The classification of the term ―professional activity‖ is sought to be justified on the basis of the law laid down in the case of B.N. Magon Vs. South Delhi