| Court: | Supreme Court of India |
| Head Notes: | Municipal Corporation of Greater Mumbai & Ors Vs Property Owners’ Association & Ors(Supreme Court) The CJI bench of Supreme Court in this case was dealing with the levy of property tax in Greater Mumbai which had been changed from rateable value to capital value system by virtue of amendments made to the Municipal Corporation Act. The capital value system effected several property owners particularly Indian Hotels Co Ltd whose tax for a property went up from Rs 6.29 crores to Rs17.78 crores. Multiple challenges were made including on account of the law being ultra vires. In a cross appeal arising out of decision of Bombay High Court, the Supreme Court while dismissing the SLP of the Municipal Corporation regarding the levy of tax based on the future or intended use of land held that the tax can be levied only on the basis of present position and until an occupancy certificate is issued, the tax can be collected only as land and not as a building. The SLP of the property owners interalia challenging the vires of the act was also dismissed. This judgement deals with the capital value system of assessment of taxes in Mumbai and will thus have limited scope but will have repercussions in times to come for all Real Estate developers in the entire country as a precedent whenever the other municipalities adopt the same system. Ramesh Patodia |
| Law: | Other Laws |
| Section(s): | The Mumbai Municipal Corporation Act 1888 and its rules |
| Counsel(s): | Counsels |
| Dowload Pdf File | Click here to download the file in pdf format |
| Uploaded By | Ramesh Patodia |
| Date of upload: | November 8, 2022 |
“…..Multiple challenges were made including on account of the law being ultra vires. In a cross appeal arising out of decision of Bombay High Court, the Supreme Court while dismissing the SLP of the Municipal Corporation regarding the levy of tax based on the future or intended use of land HELD THAT THE TAX CAN BE LEVIED ONLY ON THE BASIS OF PRESENT POSITION AND UNTIL AN OCCUPANCY CERTIFICATE IS ISSUED, THE TAX CAN BE COLLECTED ONLY AS LAND AND NOT AS A BUILDING. The SLP of the property owners interalia challenging the vires of the act was also dismissed.”
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^contd. The opinion of the Apex Court, in essence,- it could be very validly urged,- is seen to provide further support / lends sustainable credence to the proposition that levy of GST on ‘under-construction’ building project (‘ongoing project’ per RERA), by DEEMING it as a “WORKS CONTRACT” is ‘unconstitutional’ hence should be struck down !
Premised so, the subject Judgment ought to be validly cited and strongly relied upon in all proceedings, with eventual success, at whatever level, the stated proposition is pending in dispute and / or remaining to be adjudicated !!
Any eminent experts’ thoughts to spare and share ?!
With this judgment stating – the tax can be levied only on the basis of present position and until an occupancy certificate is issued, the tax can be collected only as land and not as a building. What is the position of LUC (Land Under Construction).
A very Penal Property Tax is being currently levied. Is it now the case that LUC cannot be levied.