Mr. Datar, Clause 7(1) of the First Schedule of the MRTP Act exempts 'the relevant authority' from paying taxes. The relevant authority is MIDC, not the individual unit holders. How do you read the exemption as extending to your members?

My Lord, the exemption attaches to the property, not to the person. The land within TTC MIDC vests with MIDC. MIDC is the owner. The unit/plot holders are only lessees. Under the MMC Act, property tax is leviable on the 'owner' or 'occupier' of the land or building. If MIDC is exempt under Clause 7(1), the exemption must extend to the property itself. Otherwise, the municipal corporation could collect tax from the occupier when the owner is exempt, which would defeat the legislative intent. The statement of objects of the MRTP Act clearly states that the provision was intended to exempt buildings or lands belonging to or vesting in a relevant authority or buildings constructed on land belonging to such authority. The legislative intent was to prevent double taxation when the relevant authority is already providing all amenities.

The High Court held that the TTC MIDC area falls within NMMC's jurisdiction based on the final notification dated 17.12.1991, which described boundaries covering this area. Why should we interfere with that factual finding?

My Lord, the finding is perverse and based on a misinterpretation of the notification. The draft notification used the expression 'entire area' whereas the final notification used the expression 'local area'. The legislature deliberately used different expressions, and they must be given different meanings. 'Local area' refers to part of the revenue villages, not the whole. Moreover, the land of 19 villages was vested with TTC MIDC and ceased to be part of those revenue villages for the purpose of municipal administration. The notification dated 16.12.1994 issued under Section 154 of the MRTP Act specifically stated that TTC MIDC Industrial Area will not be handed over to NMMC. The policy document of 1997 also stated that MIDC areas will not be included within municipal limits for 25 years. The High Court ignored this documentary evidence, which is a clear error apparent on the face of the record.

Your members have been paying property tax to NMMC for years and their lease deeds provide that rates and taxes payable to the local authority will be borne by the lessees. Does this not amount to acceptance of liability?

My Lord, the payment of tax under protest or under a mistaken belief does not create estoppel against statute. This Court has consistently held that there can be no estoppel against the law. If the exemption under Clause 7(1) applies, the NMMC has no jurisdiction to levy the tax at all, and payment under a mistaken belief cannot confer jurisdiction. The lease deed clause is generic and refers to taxes payable to the local authority. If the local authority has no legal right to levy the tax, the lessee cannot be compelled to pay. The petitioners have been challenging the levy since 2001 through the writ petition, which demonstrates that there was no acceptance of liability.

The MoU dated 01.12.2005 between MIDC and NMMC handed over maintenance of roads, street lights and drains to NMMC. Does this not mean that MIDC has ceased to provide those amenities, and consequently, the exemption no longer applies?

My Lord, the MoU itself in paragraph 9 states that from the date of handing over, NMMC will look after maintenance. But the MoU does not cover all amenities. MIDC continues to provide water supply, electricity, sewerage and other essential services. Moreover, the exemption under Clause 7(1) applies so long as the relevant authority provides 'all or any of the amenities' — not necessarily all amenities. The provision uses the words 'all or any', meaning that even if some amenities are provided by MIDC, the exemption operates. Even if we assume the exemption has ceased, it would only cease from the date of the MoU, not retrospectively, and only for the specific areas handed over. The petitioners' members are willing to pay property tax from the date of handing over, but the demand notices are for periods prior to 2005 as well.

For PetitionerTax Premium

MIDC Industrial Area Exempt from NMMC Property Tax — (2026) INSC 570

Small Scale Entrepreneurs Association & Ors. v. The State of Maharashtra & Ors. — (2026) INSC 570

Core Argument

Under Clause 7(1) of the First Schedule of the MRTP Act, the relevant authority (MIDC) providing all amenities in the area is exempt from paying taxes including property tax to the local authority, and this exemption extends to all land and buildings vesting in MIDC, including those occupied by unit/plot holders.

Key Precedents

Government of Kerala and Another v. Mother Superior Adoration Convent (2021) 5 SCC 602 — Held that in the event of ambiguity in a beneficial tax exemption provision, the benefit accrues in favour of the assessee.
Commr., Hindu Religious Endowments v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (1954) 1 SCC 412 — Cited for the distinction between tax (compulsory exaction without quid pro quo) and fee (return for services rendered).

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