HC asks govt to respond to PIL on property tax

Mumbai: A division bench of Chief Justice Mohit Shah and Justice Anoop Mohta of the Bombay High Court on Monday directed the civic body, joint director of town planning and valuation and the state government to file an affidavit by April 14, giving their response to a PIL challenging the new capital value-based tax system. The new system bases taxes for all buildings (old and new) according to the ready reckoner (RR) rate, the market value of the property fixed by the government. 

    In his PIL, Borivli-based social activist Rajendra Thacker has questioned the basis of computing tax according to the RR. "RR cannot be the basis of property valuation. There are many criteria that govern a property's value. Under Mumbai Stamp (determination of market value of property) Rules 1995, citizens are supposed to be given an opportunity to verify the data and give their objections before market value rates are finalised,'' said Thacker. The PIL pointed out that no such opportunity is however, given to citizens. Instead, the government finalises the statement of rates (RR) and publishes them on January 1 every year. "The preparation of the RR is therefore arbitrary and contrary to principles of natural justice,'' said Thacker. 
    Thacker had filed an application under the Right to Information Act seeking data on which the statement of rate was prepared for the year 2009 to 2012, but has not got a response. "The new property tax system was expected to rationalise property taxes in the island city and suburbs. Instead, taxes are still high in the suburbs. Flats which once paid Rs 1,000 will now have to shell out Rs 3,000 as tax. So, if RR rates are erroneous, citizens will suffer grave financial loss as they would have to pay excess property tax. This is grossly unfair,'' said Thacker, who in his PIL has demanded that the government furnish the data collected for preparing the RR. 
    The PIL is scheduled to come up for hearing in the HC on April 29. 
THE PIL 
Ready reckoner can't be the basis to compute tax 
RR is prepared in arbitrary manner, against the rules of natural justice 
    BMC clubbed 400-500 plots together to arrive at the base value, which includes luxury apartments, semi-permanent bungalows and even slums, while each structure will have different value given its type 
    New system has kept properties up to 500 sq ft out of the increased tax net 
    Property Owners' Association wants the BMC to reconsider the system, which does not offer any cap for buildings that got occupation certificates after April 2010 
    It causes recurring liability on owners and even tenants. Once the cap on the existing levy is removed, the property tax will increase by 40% 
    Tax is levied on the built-up, not on the carpet area