Appeal Petition/Administrative Claim 8183/03 Israel Electric Company Ltd. v. Golan Regional Council

Judgment

Justice M.  Naor:

1. The question that needs to be decided in this administrative appeal is whether the Respondent, the Golan Regional Council, could have been "released" (partially) from an agreement regarding property tax signed on December 31, 1996 between it and the appellant, the Israel Electric Company Ltd. If the answer to the said question is no, no additional questions arise; If the answer is in the affirmative, there are additional disputes: what is the classification of property tax or the property tax classifications that apply in the area of the IEC station within the Respondent's jurisdiction, and whether the Appellant is entitled, as she claims, to exemptions.  In my opinion, the respondent was not entitled to be released from the agreement, all as will be detailed.  In light of this conclusion, there is no need for me to examine the additional arguments raised by the parties.
2. After the judgment in the first instance was rendered, this court issued a judgment on the question of the "release" from an agreement regarding property taxes: Civil Appeal 2064/02 Complex H. Aloni in Tax Appeal v.  Nesher Municipality, IsrSC 59(1) 111 (2004) (hereinafter: the Aloni Complex).  The question before us in this appeal is the question of Application The rulings of the judgment in the matter Aloni Complex.  My opinion is that according to the tests set out in this matter, the respondent did not show sufficient grounds to justify, in the circumstances of the case, the partial release that is under discussion.  Needless to say, the aforesaid does not decide the question of the respondent's release from the agreement at a later date, if the circumstances justify it.
3. The financial dispute that remains between the parties in this proceeding is small - approximately ILS 26,000 (for 2002). This is the discrepancy that arises between the respondent's method of calculation (which was formulated, as we shall see, during the tax year), and the appellant's method of calculation, which is based on the agreement made in 1996.  Despite the negligible financial gap, the appellant is appealing out of concern that the judgment of the first instance will set a precedent that will also allow other local authorities to "be free" from agreements with the IEC.
4. The IEC owns in the Respondent's jurisdiction the Transformer Station, called the "Kursi Site", in a 30-dunam parcel of land. The station contains what can be called, in non-technical terms, various electrical installations.  Of the total area, the "command building" is 165 square meters; And 502 square meters are basic areas, electricity poles and tidy.
5. In 1996, after it became aware that the tariffs imposed earlier were "unreasonable and illegal", in the words of the trial court, the Respondent applied to the Minister of the Interior and the Minister of Finance to allow it to change various items in the Arnona Order, including, inter alia, items relating to the Electric Corporation. In the same part of the approval relating to the IEC, it was stated:

6. Six months after the aforementioned approval was given, an agreement was made between the parties (hereinafter - The Agreement). It was agreed between them to pay the entire site according to a rate Uniform of "occupied land".  It was stipulated in the agreement that as of 1997, the payment would be based on ILS 8 per square meter according to an area of 30 dunams; From this year onwards, the rate will be updated according to the rate of increase that applies to occupied land.  In the years 1997-2001, the respondent's property tax requirements were in accordance with the agreement.  However, in 2002 there was a change: at first the respondent requested to be completely released from the agreement; However, following another judgment given by Judge N.  Maman, which also heard the case that is the subject of the appeal, the Respondent changed its mind and announced only a partial release from the agreement.  We will go through and see the details of the matter.
7. Published in 2002 The General Arnona Law of 2002 [Temporary Order], 5762-2002. By virtue of this law, a minimum amount of ILS 49.99 per square meter must be imposed by a local authority in its jurisdiction with regard to "offices, services and commerce".  Following this law, and following a legal opinion by the respondent's new legal advisors (Rokach Law Office), the respondent first sent an increased property tax demand (hereinafter referred to as the first demand) as follows:

According to the first demand, the IEC was supposed to pay about ILS 1,500,000 for 2002.

8. Against the first arnona demand for 2002, the appellant filed its original administrative petition, and at the same time she also filed an objection.
9. At that time, as noted, a similar proceeding was underway between the IEC and another regional council - the Mevo'ot Hermon Regional Council (Administrative Petition (Nazareth) 124/02) [Published in Nevo] (Hereinafter: Parashat Mevo'ot Hermon). Also in Parashat Mevo'ot Hermon, following legal advice from the same firm, Rokach Law Firm, the Council requested that he be released From a similar agreement regarding municipal taxes that the IEC entered into with the Mevo'ot Hermon Regional Council.  In Parashat Mevo'ot Hermon It was ruled that the entire land division of the electrical facilities site should not be treated in the category of "offices, services and commerce".  On the other hand, it was determined, the council will be entitled to charge the area of land occupied by each of the pillars, parades or other installations on the site as a "building".  In other words, the court allowed in the Mevo'ot Hermon The local council has the right to be released from an agreement that was made in that case only partially.
10. The two sides did not appeal the judgment in the Mevo'ot Hermon. Following it, and again following legal advice from the Rokach Law Office, an amended arnona demand was issued in our case as follows: