Court’s Decision
The Delhi High Court dismissed as withdrawn a writ petition challenging a municipal tax assessment and orders of the Municipal Taxation Tribunal. The Court clarified that the petitioner could independently avail of the Sumpattikar Niptaan Yojna (SUNIYO) scheme but rejected the request to adjust deposits already made in earlier proceedings against future liabilities under the scheme. It held that no adjustment could be ordered at this stage since the earlier deposits related to a different assessment period (2004–2013), while the SUNIYO scheme applies to liabilities from FY 2020–21 onwards. The Court allowed liberty to file a fresh application if necessary, but the writ petition itself was withdrawn.
Facts
The dispute arose from a demand of ₹19,50,846 raised by the municipal authority for the period 01.04.2004 to 2013. The assessment order was challenged before the Municipal Taxation Tribunal, which directed deposit of the disputed tax amount of ₹18,01,860 under Section 170(6) of the Delhi Municipal Corporation Act, 1957. The Tribunal rejected arguments that only the base year tax was payable, holding that after the 2004 amendment, each year’s assessment was independent.
Aggrieved, the petitioner moved the High Court. No interim relief was granted, and in an appeal, the Division Bench directed a deposit of 50% of the disputed tax, subject to final outcome. Pursuant to this, the petitioner deposited ₹8,25,531.
During the pendency of the writ, the Municipal Corporation introduced a one-time amnesty scheme—SUNIYO—which waived penalties and interest for dues prior to FY 2020–21 upon payment of principal property tax for FY 2020–21 to FY 2025–26. The petitioner sought adjustment of the ₹8,25,531 already deposited against dues under this scheme or, alternatively, a refund.
Issues
- Whether the petitioner was entitled to adjustment of deposits made earlier (2004–2013) towards liabilities under the SUNIYO scheme (2020–21 onwards).
- Whether the Court could intervene to permit such adjustment despite the scheme’s clear stipulations.
- Whether the pending writ petition should continue once the petitioner opted to seek relief under the SUNIYO scheme.
Petitioner’s Arguments
The petitioner argued that since it had deposited ₹8,25,531 under orders of the Court during the LPA proceedings, the same should be adjusted towards dues payable under the SUNIYO scheme. It was submitted that failure to grant such adjustment would result in unjust enrichment of the municipal authority. Alternatively, the petitioner prayed that the amount be refunded. The counsel relied on earlier directions in appellate proceedings and argued that the deposit was substantive compliance that should be considered in the new scheme’s framework.
Respondent’s Arguments
The municipal authority opposed the adjustment, pointing out that the SUNIYO scheme was specific in scope: it applied only to demands from FY 2020–21 onwards, while earlier deposits related to 2004–2013. The scheme itself explicitly stated that settled cases where tax, interest, and penalty had already been paid could not be reopened. The respondent argued that the petitioner could not conflate earlier deposits with current liabilities and that adjustment or refund could only be sought strictly within the scheme’s framework.
Analysis of the Law
The Court examined the provisions of the SUNIYO scheme. Clause (a) required payment of principal property tax for FY 2020–21 to FY 2025–26, in return for waiver of all earlier dues, interest, and penalty. Clause (l) clarified that cases already settled with payment of principal, interest, and penalty would not be reopened.
The Court observed that the petitioner’s earlier deposits were linked to the assessment years 2004–2013 and had no connection with the scheme years. Since no determination had been made on whether the present dues included those earlier deposits, no adjustment could be ordered. The scheme was self-contained, and courts could not rewrite its scope.
Precedent Analysis
- Shyam Kishore v. Municipal Corporation of Delhi, 48 (1992) DLT 277 (SC) – Held that pre-deposit provisions for appeals under the DMC Act were constitutional, forming the foundation for mandatory deposits before appeals.
- Gagan Makkar v. Union of India, 192 (2012) DLT 186 (DB) – Division Bench of Delhi HC struck down pre-deposit requirements under Section 169(1) DMC Act as unconstitutional. This was under challenge before the Supreme Court.
- Assistant Collector of Central Excise v. Dunlop India Ltd., (1985) 1 SCC 260 – Supreme Court emphasized that the government cannot function merely on bank guarantees and requires liquid cash for revenue.
These precedents informed the Court’s refusal to grant adjustment and its reiteration that taxation law and amnesty schemes must be strictly applied.
Court’s Reasoning
The Court reasoned that the SUNIYO scheme applied only to FY 2020–21 onwards. The petitioner’s deposits for 2004–2013 were distinct and unrelated. Since the scheme explicitly prohibited reopening settled amounts, no adjustment was possible. Furthermore, given that the petitioner wished to seek benefit under the SUNIYO scheme, it was appropriate to withdraw the writ petition.
The Court reiterated the principle from Dunlop India Ltd. that revenue cannot be compromised by substitutes like bank guarantees and emphasized judicial restraint in altering financial schemes crafted by the government.
Conclusion
The High Court held that no adjustment of earlier deposits could be permitted at this stage. The petitioner was free to avail of the SUNIYO scheme strictly as per its terms and, if necessary, file a fresh application for adjustment later. At the request of the petitioner, the writ petition was dismissed as withdrawn. The next scheduled hearing date was cancelled.
Implications
This ruling underscores that tax amnesty schemes must be interpreted strictly within their framework. Courts will not permit adjustment of unrelated earlier deposits unless explicitly provided for. The judgment also highlights the balance between taxpayer relief and municipal revenue needs, reiterating that schemes like SUNIYO cannot be stretched beyond their plain wording. For businesses and individuals, the decision signals that reliance must be placed on the explicit terms of tax settlement schemes rather than prior litigation deposits.
FAQs
Q1: Can old deposits made under court orders be adjusted under new tax amnesty schemes?
No, unless the scheme expressly provides for such adjustment. Courts will not allow adjustment of unrelated prior deposits.
Q2: What does the SUNIYO scheme cover?
The scheme allows waiver of all dues prior to FY 2020–21 upon payment of principal tax for FY 2020–21 to FY 2025–26.
Q3: Why did the Court refuse adjustment in this case?
Because the petitioner’s deposits related to FY 2004–2013, which were outside the scope of the SUNIYO scheme, making adjustment impermissible.
