In Brief
The Uttar Pradesh Jal Sansthan (a water supply authority) levied water and sewerage taxes on a building owner within its jurisdiction. The High Court, relying on Union of India v. State of U.P., ruled the levy was a fee (not a tax) and unconstitutional under Article 265. The Supreme Court reversed this, holding the levy is a tax on lands and buildings under Entry 49 of List II, not a fee. The Court emphasised that the taxing event is the presence of premises in the Jal Sansthan's area; the measure is assessed annual value; and the rate is a prescribed percentage. Restrictions on levy and distinction between owners/occupiers do not change this character. The Court overruled the prior two-judge judgment as per incuriam for conflating the chapter title with Section 52's substance. The water and sewerage taxes were upheld as constitutionally valid.
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