[Cites 1, Cited by 0]
Bombay High Court
Flint Group India Private Limited vs Navi Mumbai Municipal Corporation And ... on 11 March, 2026
Author: Amit Borkar
Bench: Amit Borkar
2026:BHC-AS:11930
20-WP-5751-13-final.doc
Sayali
SAYALI IN THE HIGH COURT OF JUDICATURE AT BOMBAY
DEEPAK CIVIL APPELLATE JURISDICTION
UPASANI
Digitally signed
by SAYALI
DEEPAK
UPASANI WRIT PETITION NO.5751 OF 2013
Date: 2026.03.11
17:57:04 +0530
Flint Group India Private Ltd ... Petitioner
V/s.
Navi Mumbai Municipal Corporation
and Others ... Respondents
Ms. Armin Wandrewala with Ms. Niyati Shah i/b MLS
Vani and Associates, for Petitioner.
Mr. Sandip D. Ghaterao, for Respondent nos. 1, 2, and
3.
CORAM : AMIT BORKAR, J.
DATED : MARCH 11, 2026
P.C.:
1. The present petition calls in question the legality and
correctness of the orders dated 17 June 2013, produced at
Exhibits F1, F2 and F3, as well as the demand notices dated 19
June 2013 placed on record at Exhibits G1, G2 and G3. These
orders and demand notices form the subject matter of challenge
in the present proceedings. The circumstances and events which
have given rise to the filing of the present petition are set out
hereinafter.
1
::: Uploaded on - 11/03/2026 ::: Downloaded on - 11/03/2026 21:16:18 :::
20-WP-5751-13-final.doc
2. Acccording to petitioner, on 19 April 2010 a Leave and
License Agreement came to be executed in respect of premises
situated at Rabale, Navi Mumbai. The said premises were
thereafter utilised by the petitioner for the purpose of operating a
warehouse. In pursuance thereof, the petitioner established a
warehouse at premises bearing No. R-411, TTC Industrial Area,
MIDC, Rabale, Navi Mumbai, for storing the products
manufactured by it. Subsequently, on 8 January 2013, a warrant
of search and seizure under Section 152J of the Bombay
Provincial Municipal Corporation Act, 1949 was issued by the
Cess Department of the Navi Mumbai Municipal Corporation.
Acting upon the said warrant, the Cess Officers of Respondent
No. 1 conducted a search at the warehouse premises of the
petitioner on the same day. During the course of the search,
various goods, documents and records belonging to the petitioner
were seized. Thereafter, on 10 January 2013, upon realising the
requirement of registration under the provisions of the BPMC
(Amendment) Act, 2008, the petitioner obtained registration
bearing Certificate No. 06/02158, which was made effective from
10 January 2013.
3. Acoording to petitioner on 14 January 2013 the petitioner
deposited the entire amount of cess together with interest,
without raising any protest or dispute in that regard. Consequent
upon such payment, Respondent No. 3 passed an order directing
release of the goods which had been seized during the search
conducted on 8 January 2013. However, the documents and
2
::: Uploaded on - 11/03/2026 ::: Downloaded on - 11/03/2026 21:16:18 :::
20-WP-5751-13-final.doc
records seized during the said search have not yet been released.
On the same date, Respondent No. 3 issued a show cause notice
to the petitioner calling upon it to explain certain aspects
pertaining to the cess liability. In response to the said notice, Shri
Omkar Bulbule, Regional Manager (South and West), along with
Shri Lamkhade, Sales Coordinator, appeared before the authority
and produced the relevant books of accounts and supporting
documents. After considering the material placed before him,
Respondent No. 3 passed three separate Assessment Orders dated
28 February 2013 bearing Nos. 985/2013, 986/2013 and
987/2013. By the said orders, demands of Rs. 20,05,411/-, Rs.
42,65,639/- and Rs. 46,90,814/- respectively were raised against
the petitioner. These demands comprised interest under Rule
41(3)(a) as well as penalty imposed under Rule 41(2)(a)(i).
Being aggrieved by the said assessment orders, the petitioner
preferred appeals before Respondent No. 2 on 14 March 2013,
being Appeal Nos. 5(A)/2013, 5(B)/2013 and 5(C)/2013
respectively, thereby challenging Assessment Order Nos.
985/2013, 986/2013 and 987/2013 dated 28 February 2013.
4. Thereafter, on 16 April 2013, the petitioner, through its
Chartered Accountant Mr. Ajay Bhagat, submitted summaries of
the appeals before Respondent No. 2. In the said appeals, the
petitioner specifically challenged the order of the learned
Assessing Officer insofar as it imposed a penalty calculated at
seven times the cess amount on the ground that the petitioner
had continued its business as an unregistered dealer during the
3
::: Uploaded on - 11/03/2026 ::: Downloaded on - 11/03/2026 21:16:18 :::
20-WP-5751-13-final.doc
periods April 2010 to March 2011, April 2011 to March 2012 and
April 2012 to December 2012. Upon consideration of the appeals,
Respondent No. 2 passed orders dated 17 June 2013 bearing Nos.
DMC (Cess)/NMMC/1116/2013, DMC (Cess)/ NMMC/
1117/2013 and DMC (Cess)/NMMC/1118/2013. By the said
orders, the appeals were partly allowed. The Appellate Authority
reduced the quantum of penalty from seven times to five times.
Consequently, the penalty amount in Appeal No. 1116/2013 was
reduced from Rs. 19,47,701/- to Rs. 13,91,215/-, in Appeal No.
1117/2013 from Rs. 42,64,687/- to Rs. 30,46,205/-, and in
Appeal No. 1118/2013 from Rs. 46,85,940/- to Rs. 33,47,100/-.
However, the cess liability as well as the assessment otherwise
came to be confirmed. Following these orders, Respondent No. 3
issued Demand E-Notices dated 19 June 2013 bearing Order Nos.
062, 063 and 064 directing the petitioner to make payment on or
before 4 July 2013, failing which further coercive action was
indicated. Being aggrieved by the said orders and the
consequential demand notices, the petitioner has instituted the
present petition.
5. Learned Advocate appearing on behalf of the petitioner has
placed reliance upon the judgment of this Court in ISE Securities
and Services Ltd. v. Navi Mumbai Municipal Corporation and
Another, reported in 2012 SCC OnLine Bom 57 . It is submitted
that in circumstances of a similar nature, the coordinate Bench of
this Court, particularly in paragraph 14 of the judgment, held
that where the petitioner had carried on business without
4
::: Uploaded on - 11/03/2026 ::: Downloaded on - 11/03/2026 21:16:18 :::
20-WP-5751-13-final.doc
registration only for a short duration of two years, the imposition
of penalty equivalent to 25 percent of the total cess amount
would constitute an adequate and reasonable consequence. The
learned Advocate further submitted that in the said case the
Court also took into consideration the fact that a substantial
amount of interest had already been paid by the petitioner. It is
further submitted that in the present case the period during
which the warehouse was in operation prior to registration is
approximately two years and four months. In addition, the
petitioner has already paid interest amounts of Rs.1,79,467/-,
Rs.2,11,711/- and Rs.65,454/- respectively towards the cess
liability determined against it. According to the petitioner, these
circumstances bring the present case substantially within the
same factual scheme as the case considered in the aforesaid
reported judgment.
6. On the other hand, the learned Advocate appearing for the
Respondent Corporation has opposed the petition. It is contended
that mere payment of interest cannot operate to absolve the
petitioner from its statutory liability to pay the penalty as
prescribed under the applicable provisions. It is further submitted
that the period of default, when calculated from the date of
commencement of business until the date of registration, appears
to exceed two years and four months. In these circumstances,
according to the Respondent Corporation, the penalty imposed
cannot be said to be excessive and, in fact, having regard to the
facts of the case, there is justification for maintaining or even
5
::: Uploaded on - 11/03/2026 ::: Downloaded on - 11/03/2026 21:16:18 :::
20-WP-5751-13-final.doc
enhancing the penalty.
7. Having carefully considered the submissions advanced on
behalf of the petitioner as well as the Respondent Corporation,
and after examining the judgment delivered by the co-ordinate
Bench of this Court in ISE Securities and Services Pvt. Ltd., it
becomes necessary to determine the proper approach while
assessing the liability for penalty in the present matter. The
question which arises is regarding the relevant date from which
the period of carrying on business without registration is to be
computed. In the present case, the material on record clearly
shows that the petitioner had commenced its warehouse activities
upon taking the premises on leave and license. Therefore, in my
view, the date on which the warehouse operations actually began
must be treated as the relevant date for determining the
commencement of business for the purpose of assessing liability
under the cess provisions.
8. When the factual position is examined from this
perspective, it appears that the petitioner carried on business
without obtaining the required registration for a period which
broadly comes to about two years and four months. The
Respondent Corporation has attempted to distinguish the present
case from the case considered by the co-ordinate Bench.
However, the difference in duration, being only a four months
beyond the period considered in that case, does not appear to be
of such significance as to justify taking a materially different
6
::: Uploaded on - 11/03/2026 ::: Downloaded on - 11/03/2026 21:16:18 :::
20-WP-5751-13-final.doc
view. The principle which guided the co-ordinate Bench was that
where the period of default is relatively short and where the
assessee has already discharged the cess and interest liability, the
penalty imposed must remain proportionate and reasonable. The
purpose of penalty is to ensure compliance with statutory
obligations and not to impose a burden which becomes excessive
in relation to the nature of the default.
9. In the present case also, it is not in dispute that the
petitioner has already paid the cess together with interest. The
default essentially relates to the delay in obtaining registration.
When the duration of such delay and the conduct of the
petitioner are considered together, the facts of the present case
appear substantially similar to those which were examined in the
judgment relied upon by the petitioner. Therefore, following the
reasoning adopted by the co-ordinate Bench and in order to
maintain consistency in judicial approach, it would be
appropriate to apply a similar standard while determining the
quantum of penalty. In that view of the matter, a penalty
equivalent to twenty-five percent of the total cess amount would
meet the ends of justice. Accordingly, the present petition can be
disposed of by modifying the impugned demand in the above
terms.
10. In view of the aforesaid discussion and for the reasons
recorded hereinabove, the following order is passed:-
7
::: Uploaded on - 11/03/2026 ::: Downloaded on - 11/03/2026 21:16:18 :::
20-WP-5751-13-final.doc
ORDER
I) The bills raised by the Respondent Corporation for the
period from 1 August 2010 till 31 December 2012,
amounting to Rs. 77,84,520/-, shall stand substituted by
imposition of penalty calculated at twenty-five percent of
the total cess amount. Accordingly, the penalty payable
shall be Rs. 3,89,226/-, together with interest of Rs.
63,536/-. The petitioner shall deposit the said amount with
the Municipal Corporation within a period of four weeks
from today. Thus, the total amount payable by the
petitioner shall be Rs. 4,52,762/-.
II) Rule is made partly absolute in terms of prayer clause
(a) in the above terms.
III) Prayer clause (c) shall operate in the event the
documents seized from the petitioner have not already
been returned.
(AMIT BORKAR, J.)
