‘Too harsh’: Bombay High Court to Panvel Municipal Corporation on levying taxes retrospectively

The Bombay High Court on Tuesday decided to wait for the outcome of petitions pending before the Supreme Court before making judgment over a petition filed by a trust called Kharghar Forum. The trust, run by former BJP corporator, Leena Garad, has challenged the process adopted by the Panvel Municipal Corporation in calculating and levying taxes on residents.

The bench, while adjourning the case, said, “This is too harsh.”

The bench of Chief Justice DK Upadhyaya and Justice Arif Doctor expressed astonishment at the objection raised about the maintainability by advocate Ashutosh Kumbhakoni, who was representing the municipal corporation.

Kumbhakoni’s submission was that those who have grievances against the imposition of tax can file an appeal and not a Public Interest Litigation (PIL).

The Chief Justice, however, said, “So, you are saying that class action cannot be taken in such cases? For example, you impose tax on drinking water from river, and you provide an appeal also. The villagers living along the river cannot challenge the tax as a group? It is not affecting 1, 2, 3 but a large portion of the population even then class action cannot be taken?”

Kumbhakoni submitted that the issue of maintainability of such petitions was before the Supreme Court. He also mentioned that approximately “Rs 1,200 crore recovery is due from the public.”

Responding to Kumbakoni, the bench said, “You must have imposed tax suddenly and there must not have been any work done proportional to the tax imposed.”

The petition filed by Garad mentioned that Panvel was governed by a municipal council until 2016. After it became a corporation, it brought in taxes for the colony areas of Kharghar, Kalamboli, Kamothe, Roadpali, Taloja, Khanda Colony and New Panvel etc.

The plea pointed out that an order was passed by the corporation in 2019 specifying the ratable value for different areas and also specified the nature of taxes to be levied by the corporation.

The plea submitted, was that the commissioner of the corporation, without any authority of law, directed that all such taxes are to be recovered retrospectively from 2016.

The plea stated that though objections were raised to such special notices, no effective hearing was assigned to all such assesses and as such the hearing conducted was a farce. Following the order, demand notices for the taxes have also been issued by the corporation.

The plea argued by advocate Anil Sakhre submitted that the whole approach of the municipal corporation in charging/levying of property tax is completely illegal and that the recovery of property tax on retrospective basis itself is illegal and contrary to the provisions of the Maharashtra Municipal Corporation Act.

Published By:

Vadapalli Nithin Kumar

Published On:

Mar 27, 2024

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