REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 5653 of 2014

MUNICIPAL CORPORATION OF DELHI

.... Appellant(s)

Versus

NORTH DELHI POWER LTD. (NOW TATA POWER DELHI

DISTRIBUTION LTD.) AND ANR.

… Respondent(s)

WITH

CIVIL APPEAL No.5654 of 2014

TATA POWER DELHI DISTRIBUTION LTD. (FORMERLY

KNWON AS NORTH DELHI POWER LTD.)

.....Appellant(s)

Versus

MUNICIPAL CORPORATION OF DELHI (NOW KNOWN AS

NORTH DELHI MUNICIPAL CORPORATION)

… Respondent(s)

WITH

CIVIL APPEAL No._7389_of 2016

(Arising out of SLP (C) No.17317 of 2015)

GOVERNMENT OF NCT OF DELHI

.... Appellant(s)

Versus

NORTH DELHI POWER LTD. (NOW TATA POWER DELHI

DISTRIBUTION LTD.) AND ANR.

.… Respondent(s)

1

J U D G M E N T

L. NAGESWARA RAO, J.

Leave granted in Special Leave Petition (Civil)

No.17317/2015.

The issues in these three Civil Appeals are the

exigibility and incidence of property tax over a plot of 8,080

square meters of land.

2.On 26.03.2003, the Assessment and Collection

Department of the Delhi Municipal Corporation determined

the rateable value of a vacant plot of 8,080 sq. meters

allotted to North Delhi Power Limited at Rs.58,53,960/-

with effect from 01.04.2002. M/s North Delhi Power

Limited filed an appeal under Section 169 of the Delhi

Municipal Corporation Act, 1957 before the District Judge,

Delhi challenging the order dated 26.03.2003. By a

judgment dated 03.01.2004 in H.T.A. No.164/2003, the

Additional District Judge, Delhi held that the land in

dispute stood transferred to the Delhi Government and

hence it was entitled for exemption from payment of

property tax in view of Section 119 (1) of Delhi Municipal

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Corporation Act, 1957. It was also held that M/s North

Delhi Power Limited was a licensee of the Government. On

the basis of the above findings, the District Judge allowed

the appeal and quashed the assessment order dated

26.03.2003. Aggrieved by the said judgment dated

03.01.2004 of the District Judge, Delhi, the Municipal

Corporation Delhi approached the High Court of Delhi by

filing Writ Petition No.3193/2004. A Single Judge of the

Delhi High Court allowed the writ petition holding that the

North Delhi Power Limited is liable to pay the tax. The

Single Judge held that the provisions of Section 120 (1) (c)

of the Delhi Municipal Corporation Act, 1957 are applicable

as North Delhi Power Limited was entitled to let out the

properties on which basis it became liable to pay taxes.

With reference to the Delhi Electricity Reforms (Transfer

Scheme) Rules, 2001 which would be dealt in detail later,

the Single Judge held that North Delhi Power Limited is an

effective and full successor in respect to all matters relating

to all liabilities and assets and further held that there is no

material to establish that the Delhi Electricity Reforms

3

(Transfer Scheme), 2001 ruled out liability of North Delhi

Power Limited from municipal taxation. North Delhi Power

Limited filed L.P.A.No.2630/2005, challenging the judgment

dated 25.07.2005 passed by the Single Judge in Writ

Petition No.3913/2004. A Division Bench of the High Court

of Delhi held that Delhi Power Company Ltd. was the owner

of land and land rights during the relevant assessment

years i.e. 2002-2003 and 2003-2004, that the statutory

transfer scheme creates a licence in favour of the Delhi

Power Company Ltd. and that the distribution licence

issued by Delhi Electricity Regulatory Commission under

Section 20 of the Delhi Electricity Reforms Act, 2000 is

distinct from the licence for land granted in its favour. As

Delhi Power Company Ltd. was not a party with the

proceedings before the Division Bench, the matter was

remanded back to the Deputy Assessor and Collector of the

Respondent-Municipal Corporation of Delhi for

determination as to whether North Delhi Power Limited or

Delhi Power Company Ltd. is liable to pay property tax.

The Deputy Assessor and Collector of Municipal

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Corporation, Delhi was directed to give a hearing to both

North Delhi Power Limited as well as to Delhi Power

Company Ltd. before passing any final order.

3.Aggrieved by the said judgment dated 09.12.2013 in

L.P.A. No.2630/2005, Tata Power Delhi Distribution Limited

(formerly North Delhi Power Limited referred to as

‘Distribution Company’ hereinafter) filed Civil Appeal

No.5654/2014. The Municipal Corporation of Delhi referred

to as ‘Corporation’ hereinafter for convenience, also filed

Civil Appeal No.5653/2014, aggrieved by certain findings in

favour of the Distribution Company. Civil Appeal No.______

of 2016 (arising out of Special Leave Petition (C) No.17317

of 2015) was filed by Government of NCT of Delhi

(hereinafter referred to as ‘Government’), challenging the

findings recorded by the Division Bench of the High Court

that the vacant land stood transferred to Delhi Power

Company Ltd. and the Government is not owner of the

vacant land.

4.It would be useful to refer to the provisions, Statutes

and the Rules for better appreciation of the dispute involved

5

in this case. Chapter VIII of the Delhi Municipal Corporation

Act, 1957 deals with taxation. Section 114 provides for

imposition of tax on land and buildings in Delhi. Section

119 of the Delhi Municipal Corporation Act exempts lands

and buildings being properties of the Union from the

property tax specified in Section 114. Section 120 of the

Delhi Municipal Corporation Act deals with the incidence of

property tax according to which the property tax shall be

primarily leviable on the lessor if the land or building is let,

upon the superior lessor if the land or building is sub-let

and if the land or building is un-let upon the person in

whom the right to let-out the same vests. The Delhi

Electricity Reforms Act, 2000 was enacted for restructuring

the electricity industry, to increase the avenues for

participation of private sector of the electricity industry and

generally for taking measures conducive to the development

and the management of the electricity industry in an

efficient, commercial, economic and competitive manner in

the National Capital Territory of Delhi. The process of

unbundling of the Delhi Vidyut Board was dealt with in

6

Sections 14 and 15 of the Act which are as follows:-

PART V

“REORGANISATION OF ELECTRICITY INDUSTRY

14. Incorporation of companies for the purpose of

generation, transmission or distribution of

electricity.

(1) The government may, as soon as may be after the

commencement of this Act, cause one or more

companies to be incorporated and set up under the

provisions of the Companies Act, 1956 for the purpose

of generation, transmission or distribution of electricity,

including companies engaged in more than one of the

said activities, in the National Capital Territory of Delhi

and may transfer the existing generating stations or the

transmission system or distribution system, or any part

of the transmission system or distribution system, to

such company or companies.

(2) The Government may designate any company set up

under sub-section (1) to be the principal company to

undertake all planning and coordination in regard to

generation or transmission or both; and such company

shall undertake works connected with generation or

transmission and determine the requirements of the

territory in consultation with the other companies

engaged in generation or transmission for the National

Capital Territory of Delhi, the Commission, the Regional

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Electricity Board and the Central Electricity Authority

and any other authority under any law in force for the

time being, or any other Government concerned.

(3) The companies incorporated and set up under

sub-section (1) shall undertake the functions specified

in this section and such other functions as may be

assigned to them by the Government.

(4) Subject to the provisions of this Act and of the duties

and functions assigned to the companies incorporated

and set up under sub-section (1), other companies

engaged in generation, transmission or distribution of

electricity, or more than one of the said activities, may

be incorporated and set up in the National Capital

Territory of Delhi.

(5) The Government may, in consultation with the

Commission, determine the lines that shall be treated

as transmission or distribution lines for the purpose of

division of responsibilities between the companies

incorporated and set up under this section, having

regard to the voltage levels of such lines and any other

factor, which it may consider relevant.

(6) The Government may convert the companies set up

under this Act to joint venture companies through a

process of disinvestment, in accordance with the

transfer scheme prepared under the provisions of this

Act.

(7) Upon the transfer of all functions of the Board to

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corporate entities in terms of this Part, the Government

may appoint an administrator for the purpose of

finalisation of the accounts of the Board for all the

pending years till the date of such transfer and

thereafter for winding up the Board in such manner as

the Government may direct.

15. Reorganization of Delhi Vidyut Board and

transfer of properties, functions and duties

thereof.

(1) With effect from the date on which a transfer scheme

prepared by the Government to give effect to the objects

and purposes of this Act, is published or such further

date as may be specified by the Government

(hereinafter referred to as “the effective date”), any

property, interest in property, rights and, liabilities

which immediately before the effective date belonged to

the Board shall vest in the Government.

(2) The Government may transfer such property,

interest in property, rights and liabilities to any

company or companies established under section 14 for

the purpose in accordance with the transfer scheme

prepared therefore.

(3) Such of the rights and power to be exercised by the

Board under the Electricity (Supply) Act, 1948 (54 of

1948), as the Government may, by notification in the

official Gazette, specify, shall be exercisable by a

company or companies established as the case may be,

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under section 14, for the purpose of discharge of the

functions and duties with which it is entrusted.

(4) Notwithstanding anything contained in this section

or any other Act, where:

(a) the transfer scheme involves the transfer of any

property or rights to any person or undertaking not

wholly owned by the Government, the scheme

shall give effect to the transfer only after asset

valuation;

(b) where any transaction of any description is

effected in pursuance of a transfer scheme, it shall

be binding on all persons including third parties,

even if such persons have not consented to it.

(5) The Government may require any transmitting or

distributing company established under the provisions

of sub-section (1) of section 14 (hereinafter referred to

as "the transferor licensee") or any generating company

to draw up a transfer scheme to vest in a further

licensee or licensees (the "transferee licensee or

licensees"), or any generating company, any property,

interest in property, rights and liabilities which have

been vested in the transferor licensee or generating

company, as the case may be, under this section and

publish the same in the official Gazette. The transfer

scheme to be notified under this sub-section shall have

the same effect as a transfer scheme under sub-section

(2).

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(6) A transfer scheme may-

(a) provide for the formation of subsidiaries, joint

venture companies or other schemes of division,

amalgamation, merger, reconstruction or

arrangements;

(b) define the property, interest in property, rights and

liabilities to be allocated-

(i) by specifying or describing the property, rights

and liabilities in question,

(ii) by referring to all the property, interest in

property, rights and liabilities comprised in a

specified part of the transferor's under-taking,

or

(iii) partly in one way and partly in the other :

Provided that the property, interest in property,

rights and liabilities shall be subject to such

further transfer as the Government may specify;

(c) provide that any rights or liabilities specified or

described in the scheme shall be enforceable by or

against the transferor or the transferee;

(d) impose on any licensee an obligation to enter into

such written agreements with, or execute such other

instruments in favour of any other subsequent

licensee as may be specified in the scheme;

(e) make such supplemental, incidental and

consequential provisions as the transferor licensee

considers appropriate including provision specifying

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the order in which any transfer or transaction is to

be regarded as taking effect;

(f) provide that the transfer shall be provisional

subject to the provisions of section 18.

(7) All debts and obligations incurred, all contracts

entered into and all matters and things done by,

with or for the Board, or a company or companies

established as the case may be, under section 14 or

generating company or distribution company or

companies before a transfer scheme becomes

effective shall, to the extent specified in the relevant

transfer scheme, be deemed to have been incurred,

entered into or done by, with or for the Government

or the transferee and all suits or other legal

proceedings instituted by or against the Board or

transferor, as the case may be, continued or

instituted by or against the Government or

concerned transferee, as the case may be.

(8) In the event a licensee is required to vest any

part of its undertakings in another licensee pursuant

to sub-section (5), the Government shall amend the

transferee licence in accordance with section 24 or

revoke its licence in accordance with section 23.

(9) The Board shall cease to exist with the transfer

of functions and duties specified and with the

transfer of assets as on the effective date.

(10) The exercise by a licensee of any of Board’s

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rights and powers may be made on such conditions

as shall be specified in the transfer scheme

including a condition that such rights and powers

shall be exercised by the licensee only with the

approval of the Commission/Government”.

5.The Delhi Electricity Reforms (Transfer Scheme) Rules,

2001 were notified on 20.11.2001 and were given effect

from 01.07.2002. As per Rule 3 all the assets of the Delhi

Vidyut Board stood transferred and vested in the

Government absolutely. Rule 4 classified the undertakings.

In this case, we are concerned with the distribution

undertakings as set out in Schedule ‘F’ thereof and the

holding company as set out in Schedule ‘G’. The assets set

out in Schedule ‘F’ stood transferred and vested in

DISCOM-3 and the assets and liabilities set out in Schedule

‘G’ stood transferred to the Holding Company. Sub-rule 5

of Rule 5 provides that the distribution companies shall

issue shares and instruments in favour of the holding

company as specified in Schedules A to F, in consideration

of the vesting of the undertakings. Rule 9 postulates that

the classification and transfer of the undertakings, unless

13

otherwise specified in any other order made by the

Government shall be provisional and shall become final

upon the expiry of three months from the date of transfer.

According to Rule 12 (1) if any doubt, dispute, difference or

issue arises in regard to transfer under the said Rules, the

decision of the Government shall be final and binding on all

the parties.

6.Schedule F of the Rules deals with the assets and

liabilities and proceedings concerning distribution and their

transfer. There is a proviso to items I, II and III of part I of

Schedule ‘F’ which is as follows:-

“PROVIDED THAT notwithstanding I, II and III

above and that the land was being used immediately

before date of the transfer exclusively or primarily for

the business of the transferee, no part of the land shall

form part of the assets transferred under these rules.

The transferee shall be entitled to use such land as a

licensee of the government on payment of a

consolidated amount of one rupee only per month

during the period the transferee has the sanction or

licence or authorization to undertake the transmission

business. As and when such licence or sanction or

authorization is revoked or cancelled or not renewed or

14

the area of supply where the land is situated is

withdrawn from the transferee, the licence to the

transferee in respect of such land shall cancelled’’.

Schedule ‘G’ gives details of the assets and liabilities

transferred to the holding company which includes land and land

rights.

7.Mr. Dhruv Mehta, Senior Advocate, Ms. Madhu Tewatia and

Ms. Avanish Ahlawat, Advocates appeared and made their

submissions on behalf of the Distribution Company, the

Corporation and the Government respectively.

8.Mr. Dhruv Mehta, submitted that the Government

continues to be the owner of the land in question and hence

there is an exemption from payment of property tax as per

Section 119 of the Delhi Municipal Corporation Act, 1957. It is

his further submission that, in any event, the Distribution

Company is a licensee under the Government as per the Delhi

Electricity Reforms (Transfer Scheme) Rules, 2001 and hence it

does not fall within the purview of Section 120 of the Delhi

Municipal Corporation Act, 1957. He also submitted that the

Government of NCT of Delhi has taken a categoric stand that the

15

land belongs to the Government. He relied upon the Cabinet

decision dated 06.01.2001 and other clarifications issued by the

Government in this regard. Mr. Mehta relied upon Rule 12 (1) of

the Delhi Electricity Reforms (Transfer Scheme) Rules, 2001 to

contend that the opinion of the Government regarding the

ownership of the land is final and binding. Mr. Mehta also

submitted that the Division Bench committed an error in

remanding the matter back to the Authority after recording the

finding that Tata Power Delhi Distribution Ltd. is only a licensee.

9.Ms. Madhu Tewatia, Advocate appearing for the Corporation

submitted that the land belongs to Delhi Power Company Ltd.

which is the holding company in accordance with Schedule G of

the Transfer Scheme Rules. She further submitted that Section

120 (1) (c) of the Delhi Municipal Corporation Act, 1957 would be

clearly applicable to the facts of the instant case as the

Distribution Company has the right to let out the land in dispute.

This liability to pay the property tax under Section 120 (1) (c) is

irrespective of the fact that the land belongs to the Government

or to the holding company i.e. Delhi Power Company Ltd. Ms.

Tewatia contended that the clarifications issued by the

16

Government and the Cabinet decision relied upon by the

Distribution Company would not fall within the purview of Rule

12(1) of the Transfer Scheme Rules. She contended that the

findings recorded by the Division Bench to the effect that the

Distribution Company is a licensee and that the licence relating

to land alone would be a decisive factor to determine ownership

without reference to the distribution licence are not correct.

10.Ms. Avanish Ahlawat, Advocate, appearing for the

Government submitted that the Government is the owner of the

land, there is no transfer of land to the holding company and

that the entry land and land rights as found in Schedule G

should not be given too much importance and has to be read in

conjunction with the other provisions of Schedule F and the

other Rules.

11.We have carefully considered the submissions made and

examined the material on record. The first point that falls for our

consideration is exigibility of tax over the land of 8,080 sq.

meters. Section 119 of the Delhi Municipal Corporation Act

exempts the properties of the Union from taxation. We

entertained a doubt about the properties of Union Territories

17

being treated as properties of the Union. The administration of

Union Territories is by the Central Government but that does not

mean that Union Territories become merged with the Central

Government. They are centrally administered but retain their

independent entity. [See: Satyadev Bhushari Vs. Padam Dev &

Ors. (1955) 1 SCR 549; Government of NCT Delhi and ors. Vs.

All India Central Civil Accounts, JAO’s Association and ors.

(2002) 1 SCC 344; Chandigarh Administration and Anr. Vs.

Surinder Kumar and Ors (2004) 1 SCC 530]. But, we refrain

from adjudicating this issue as constitutional questions are not

decided unless they directly arise for consideration.

12.Dismal performance of the Electricity Boards led to a

decision of unbundling generation, transmission and distribution

activities which were separated for increasing efficiency. Private

participation in the Electricity industry was also envisaged.

Broadly understood, the scheme contemplated by the Delhi

Electricity Reforms Act and the Rules framed therein is that the

assets of the erstwhile Delhi Vidyut Board initially stood

transferred and vested absolutely in the Government. The

undertakings were transferred to generation, transmission and

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distribution companies. The shares of these companies were

allotted to the Holding Company which is Delhi Power Company

Ltd. which is a wholly owned Government company. Land and

land rights also were transferred to the Holding Company.

Thereafter the process of privatization takes place by divesting

shares in the distribution companies. It is clear that the transfer

of all the assets including land to the Government is a transitory

step as the Holding Company is to be in total control. In the

above background, the question is whether the land belongs to

the Government and exempt from tax. No doubt, all the assets of

Delhi Vidyut Board stood transferred and vested in the

Government. It is also clear that the distribution undertaking

with assets mentioned in Items I, II & III of Part I of Schedule F

were transferred to the Distribution Company. The proviso to

Items I, II & III of Part I of Schedule F to the Transfer Scheme

Rules contemplates that land which was exclusively and

primarily being used for business purpose by the transferee

before the transfer does not form part of the assets transferred

and the transferee would be a licensee of the Government for the

said land on payment of a nominal amount. Schedule ‘G’ deals

19

with transfer in favour of the Holding Company and land and

land rights is one of the entities therein. Mr. Mehta submits that

the transfer of assets and liabilities are dealt with in Schedule F

and it is clear from the said Schedule that the Distribution

Company is a licensee of the Government. He further submitted

that Government continues to be the owner of land and the entry

land and land rights is vague and has to be ignored as it is not

applicable to the land already covered by Schedule F. Whereas,

the case of the Corporation is that there is no ambiguity in

Schedule G. Land was transferred to the Holding Company and

Section 119 of the Delhi Municipal Corporation Act is not

applicable. The High Court held that the initial transfer and

vesting of land is in the Government, then Distribution Company

becomes licensee of the Government qua land and finally there is

a transfer of land to the Holding Company. In view of the fact

that Government was not to hold any asset and the vesting of

land in the Government was only transitory in nature, we uphold

the findings of the High Court that Holding Company is the

owner of land.

13.We proceed to deal with the point as to whether there is any

20

contradiction in Schedule ‘F’ and ‘G’ pertaining to the ownership

of land. We see no conflict in the two Schedules. The proviso to

items I to III in Part I of Schedule ‘F’ refers to land which was

exclusively and primarily being used for the purpose of business

by the transferee on the date of transfer not forming part of the

assets transferred to Distribution Company. Such land would be

subject matter of a license by the Government in favour of the

transferee. Only such land which satisfies the condition as stated

above will be treated as licensed to transferee. All other lands

would be part of land transferred to the Holding Company as

contemplated in Schedule ‘G’. Hence, we see no conflict in the

Schedules.

14.Another issue connected to the ownership of the land is the

stand of the Government that the land continues to be vested in

the Government. Reference was made to the Cabinet decision

dated 06.01.2001. M/s SBI Capital Market Limited (referred to as

‘SBI Caps’ hereinafter) was appointed by Delhi Vidyut Board for

restructuring of the Board. A report was submitted by the SBI

Caps by which they recommended that the land in possession of

Delhi Vidyut Board which were earmarked for the purpose of

21

electricity generation, transmission and distribution cannot be

used for any other purpose without bringing about a change in

land use by the Competent Authority. The SBI Caps further

recommended that the ownership of the land should be retained

by the State Government and land should be provided on licence

to the successor entities. This recommendation made by the

Consultant i.e. SBI Caps was approved in the Cabinet decision

on 06.01.2001. Apart from the said Cabinet decision, we were

also shown some material which indicated that the Government

was maintaining its stand that the land belongs to them. As we

have interpreted the provisions of the Act, Rules and the Transfer

Scheme to conclude that the land transferred and vested in the

Holding Company, the Cabinet decision dated 06.01.2001 which

was much prior to the Statutory Scheme cannot be taken into

consideration to reach a different conclusion.

15.Another issue that calls for consideration is relating to the

scope of Rule 12 (1) of the Transfer Scheme Rules. Rule 12(1) of

the Rules reads as under:-

“Decision of Government final:- (1) If any doubt, dispute,

difference or issue shall arise in regard to the transfers

under these rules, subject to the provisions of the Act, the

22

decision of the Government thereon, shall be final and

binding on all parties.”

The stand of the Government that the land continues to

vest in it would not amount to a decision by the Government in

resolving a dispute between the parties to the Transfer Scheme.

Rule 12(1) will not be applicable in the instant case as the

interpretation of the provisions of the statute and the rules is

involved in adjudication of the dispute.

16.A similar provision fell for consideration before this Court in

Municipal Commissioner of Dum Dum and Ors. Vs. Indian

Tourism Corporation and ors., reported in (1995) 5 SCC 251 .

The issue in that case was whether the properties vested in the

International Airport Authority of India could be called as

properties of the Union, within the meaning of Article 285 of the

Constitution of India and exempted from tax. The Government of

India asserted that the properties of the Authority are the

properties of the Union and reliance was placed on certain letters

of the Government for the above assertion. Section 12(3) of the

International Airport Authority of India Act, 1971 provided that

decision of the Central Government shall be final, if any dispute

23

or doubt arises, as to which of the properties, rights or liabilities

of the Central Government have been transferred to the

Authority. Interpreting the said provision, this Court held that a

dispute under Section 12(3) should be between the Union of

India and the Authority. It was also held that the decision would

not bind the Municipal Corporation. In addition to the points

mentioned above, Ms. Madhu Tewatia submitted that there was

no opportunity given to the Municipal Corporation by the

Government before taking such stand. In view of the above

discussion, we uphold the findings recorded by the Division

Bench in the impugned judgment that the Government is not the

owner of the land.

17.Having answered the point about the exigibility of tax, the

point which remains to be decided is the incidence of tax.

Section 120(1) of the Delhi Municipal Corporation Act reads as

follows:-

“120. Incidence of property taxes

(1) The property taxes shall be primarily leviable as

follows:—

(a) if the land or building is let, upon the lessor;

(b) if the land or building is sub-let, upon the superior

24

lessor;

(c) if the land or building is unlet, upon the person in

whom the right to let the same vests:

Provided that the property taxes in respect of land or

building, being property of the Union, possession of which

has been delivered in pursuance of section 20 of the

Displaced Persons (Compensation and Rehabilitation) Act,

1954 (44 of 1954), shall be primarily leviable upon the

transferee.”

18.The High Court remanded the matter back to the

Deputy Assessor and Collector of Municipal Corporation of

Delhi for determination as to whether the Distribution

Company or the Holding Company i.e. Delhi Power Company

Ltd. is liable to pay the property tax. The High Court also

said that Holding Company was not a party to the case and

in view of the findings recorded in the judgment that the

Holding Company is the owner of the land, the matter has to

be decided by the Assessing Authority after giving an

opportunity to the Holding Company.

19.According to Section 120 (1) (c), the person who has a

right to let would be liable to pay tax for un-let land.

Admittedly, this land is un-let. Incidence of tax has to be

25

decided by the Authority after taking into consideration the

provisions of the Act, rules and the licences, including the

distribution licence. The High Court held that the licence

pertaining to land as per the Transfer Scheme would show

that the Distribution Company is only a licensee and not a

lessee. The High Court further held that the distribution

licence under Section 20 of the Delhi Electricity Reforms Act,

2000 is distinct and separate from the licence for land. It

was further held by the High Court that the distribution

licence can neither govern nor be used as a tool to interpret

the licence for land. We do not agree with the said findings

of the High Court. Section 120 (1) (c) contemplates that a

person who has the right to let out un-let land is liable to

pay tax. His status as a lessor or licensee is irrelevant. If

the distribution licence empowers the Distribution Company

to let out the land, notwithstanding the fact that the

Distribution Company is a licensee as per Schedule ‘F’ of the

Transfer Scheme Rules, it would still have to pay the tax.

For the reasons afore-stated, we confirm the order of remand

passed by the High Court in the impugned judgment with a

26

direction to the Deputy Assessor and Collector of Municipal

Corporation of Delhi to consider the provisions of Delhi

Municipal Corporation Act, Delhi Electricity Reforms Act,

Transfer Scheme Rules and the Distribution licence issued

under Section 20 of the Delhi Electricity Reforms Act for

deciding the matter pertaining to the incidence of tax.

The appeals are disposed of in terms of the above

directions.

................................J.

[ANIL R. DAVE]

................................J.

[L. NAGESWARA RAO]

New Delhi;

August 10, 2016

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