Bombay HC rejects Plea of Housing Society against Retrospective Property Tax Levy by Panvel Municipal Corporation [Read Order]

The Bombay High Court had recently upheld the levy of property tax by Panvel Municipal Corporation (PMC), while the plea against the retrospective levy was raised by the Kharghar Co-Operative Housing Society, Kharghar was dismissed.

This petition concerns levy of municipal taxes in relation to only one area of the PMC called Kharghar Node. The infrastructure of the Kharghar Node was developed and maintained by the City Industrial Development Corporation (for short ‘CIDCO’) which was constituted as a “New Town Development Authority”, for the area constituting the twin city, Navi Mumbai.

The PMC, making the assessment, issued bills to all the properties including to the properties situated in the Kharghar Node. Property Tax bills were also issued to members of petitioner, the co-operative societies in the Kharghar Node.

The petitioners drew the Court’s attention to a bill issued to one of its members-Satyam Heights Cooperative Housing Society Ltd. which is for the period 1 October 2016 upto 2021-22 of an amount of Rs.1,69,151/-.

The bench noted that, “only substantive prayer in the present petition is for issuance of a writ of mandamus to cancel the bills and demand notices issued for levying retrospective tax since October, 2016 to 2021 – 2022 to individual members and societies of petitioner No.1.”

The Counsel for the PMC, Kumbhakoni submitted that, he challenge is merely to the bills issued by the PMC demanding property taxes, from the members of petitioner No.1, they have an effective and efficacious alternative remedy of filing an appeal as provided under the statute, namely, under the provisions of Section 406 of the MMC Act.

He further submitted that none of the grounds as raised by the petitioners are such that they cannot be gone into by the appellate forum, namely, the Court of Civil Judge, Senior Division.

He also urged that the petition be dismissed, having no cause of action and the petitioners having suffered no injury.

Mr. Joshi, learned counsel for the petitioners has vehemently opposed the preliminary objection as urged on behalf of the PMC. He further argued that the petition is not only maintainable but it also needs to be entertained. His first contention is that levy of tax itself is illegal for the reason that there is a breach of principles of natural justice in the PMC levying taxes, subject matter of demand under the impugned bills.

He also contended that there is no basis in law for such retrospective demand.

The Division Bench observed that, “availability of an alternate remedy does not operate as an absolute bar to the maintainability of the writ petition, and the rule which requires the party to pursue an alternate remedy provided by a statute, is a rule of policy, convenience and discretion rather than a rule of law. However, the High Court in exercise of its writ jurisdiction has a discretion whether to entertain a writ petition or not, and it would not normally entertain a writ petition, where an effective and efficacious alternative remedy is available, as also held in M/s.Godrej Sara Lee Ltd.”

It was also observed that, “the relevant provisions of MMC Act read with the Rules, creates a robust statutory mechanism not only in respect of everything leading to the levy and collection of taxes but also providing for a specific statutory remedy of an appeal under Section 406 of the MMC Act.”

The Bombay High Court Bench went on to note that, “A public body like the respondent-PMC cannot be placed in a cloud of such uncertainty when it comes to levy and recovery of municipal taxes. Thus, entertaining this petition would open floodgates of litigation before this Court. This more particularly, as none of the grounds as raised in the petition impresses us, so as to exercise our extraordinary writ jurisdiction by permitting these assessees to bypass the remedy of a statutory appeal.”

The Division Bench of Justice R N Laddha and Justice G S Kulkarni thereby dismissed the petition, exercising their discretion not to entertain the same.

Following the decision of the Bombay High Court, the Kharghar Federation had held a meeting  and the majority of the members decided to appeal against the decision to the Supreme Court. It means that the battle between citizens and the PMC on the property tax issue is now not going to end anytime soon.

On the other hand, the Municipal Commissioner Mr. Ganesh Deshmukh has appealed to all the property owners in the PMC area to cooperate with the corporation by paying their property tax through online or offline whichever is easy for them. The Panvel Municipal Corporation (PMC) has also made available an online facility for paying taxes for the financial year 2023-2024.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates