The Madras High Court, while dismissing a bunch of public interest litigations, has upheld the decision of the State Government to increase property tax in the cities of Chennai and Coimbatore.
The State Government has constituted a committee to look into the present rates of property tax, and determine whether they are commensurate with the need of the State and in line with measures taken elsewhere in the Country for the levy and collection of property tax. The said Committee made certain recommendations proposing augmenting of rates of the taxes as well as the Basic Street Rates (BSR). There was also a proposal for adoption of a slab system. The Committee’s report has been accepted by the State and a Notification issued for implementation of general revision of property tax within the limits of Greater Chennai and Coimbatore Corporations, with effect from the current year, i.e., with effect from the first half of 2022-23.
The petitioners challenged the action contending that Article 162 provides for the intervention of the State by means of Executive orders, but only in respect of subjects that are devoid of an enactment which controls or regulates that particular subject. In this particular instance, the levy of property tax by the Corporations is governed by specific enactments. Thus, the petitioners contended that the directions under the impugned G.O. constitute unlawful intervention in an otherwise occupied field.
Upholding the impugned Government Orders, Justice Anita Sumanth held that “the fixation of slab has been done for the first time, the policy has only sought to take into account varying economic strata within the tax base and there is nothing untoward in the same.”
“Property tax General Revision Notices for the period 2022-23 (II), i.e., second half onwards are set aside. The petitioners have been enjoying the benefit of interim protection till date. More importantly, seeing as clarity in regard to the entire process has been obtained only pending Writ Petitions, this Court directs that qua the Writ Petitioners, the amendments will be operative on and from the first half of 2023-24, i.e., 01.04.2023 onwards. The challenge to the property tax demands as aforesaid is accepted. However, pending Writ Petitions, if the petitioners have settled the amounts to be paid, they shall continue to do so in line with the amendments that have now been upheld.”
“The Corporations will ensure that the websites are kept robust and grievance mechanisms are put in place to enable all property tax assesses to seek clarifications in regard to any aspect of property tax assessments,” the Court said.
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