Patna Notre Dame Sister'S Society And Anr vs. The State Of Bihar And Ors

Held

The Court held that the exemption granted to the petitioner under the repealed Bihar and Orissa Municipal Act, 1922, did not automatically become inoperative with the enactment of the Bihar Municipal Act, 2007. The Court relied on Section 488(4) and (5) of the Bihar Municipal Act, 2007, which serve as saving clauses protecting actions taken and orders issued under the repealed Act. The Court noted that the exemption granted by the State Government had not been formally modified or withdrawn. Citing the Supreme Court's decision in Gammon India Ltd. Vs. Special Chief Secretary and Others, the Court stated that a re-enactment is often a reaffirmation of the old law, and provisions continue in force unless the new enactment manifests an incompatible intention. The Court found that the Executive Officer of the Nagar Parishad was required to obtain a recommendation from the State Government to nullify the exemption order. Since this was not done, the demand notices were set aside and quashed. The Court directed the Executive Officer to seek the State Government's order to withdraw the exemption and instructed the Additional Chief Secretary, Urban Development Department, to pass an appropriate order after reviewing the records and pleadings.

Facts

The petitioners, Patna Notre Dame Sister's Society, challenged demand notices dated June 10, 2013, issued by the Executive Officer, Jamalpur Municipality (now Nagar Parishad). These notices sought to levy holding tax on the Society's properties. The Society contended that their entire holding at Jamalpur was exempted from holding tax by the State Government in 1956 under Section 84(3) of the Bihar and Orissa Municipal Act, 1922, and this exemption had not been cancelled. The State argued that the exemption was rendered inoperative by the repeal of the 1922 Act and the enactment of the Bihar Municipal Act, 2007, which did not contain a similar exemption provision. The Jamalpur Nagar Parishad supported the Executive Officer's action, asserting it was in accordance with the 2007 Act.

Key Issues

1. Whether the exemption from holding tax granted to the petitioner under the repealed Bihar and Orissa Municipal Act, 1922, automatically becomes inoperative or withdrawn in view of the repeal of the said Act and the enactment of the Bihar Municipal Act, 2007, specifically in light of Section 488(1) of the 2007 Act? Petitioner's argument: The exemption granted under the previous Act continues to be valid due to the saving provisions in the new Act, particularly Section 488(4) and (5) of the Bihar Municipal Act, 2007. The exemption was granted by the State Government and has not been formally withdrawn. Therefore, the demand notices are illegal and without jurisdiction. Revenue/State's argument: The repeal of the Bihar and Orissa Municipal Act, 1922, without a specific saving clause for such exemptions in the new Bihar Municipal Act, 2007, renders the prior exemption inoperative. The Executive Officer was justified in assessing holding tax under the provisions of the New Bihar Municipal Act, 2007.