Bombay High Court Questions Panvel Municipal Corporation's Retroactive Property Tax Demand

Bombay High Court Questions Panvel Municipal Corporation's Retroactive Property Tax Demand

Residents argue PMC lacks justification for retroactive taxation, citing CIDCO’s previous provision of services; PMC defends its actions, citing SC ruling

Urvi MahajaniUpdated: Wednesday, March 27, 2024, 12:30 AM IST
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Panvel Municipal Corporation | FIle pic

The Bombay High Court on Tuesday questioned the move by the Panvel Municipal Corporation (PMC) demanding over Rs1,200 crore as property tax, with retrospective effect from 2016, from residents of areas in the municipal limits, which were earlier a part of zilla parishad.

A bench of Chief Justice DK Upadhyaya and Justice Arif Doctor was hearing a public interest litigation (PIL) petition filed by Kharghar Forum, a public trust run by a sitting corporator Leena Gharat, challenging two orders passed by the PMC commissioner on November 16, 2019 and May 12, 2021 fixing the rateable value of the properties in these areas and directing them to pay property tax from 2016, when the PMC was incorporated.

Petitioner’s counsel Anil Sakhare and advocate Samadhan Kashid said that earlier, City and Industrial Development Corporation (CIDCO) was the planning authority and it provided facilities like water supply and other essential services and recovered “service charges” for the same. PMC, since the last two years, has only been lifting and carrying garbage.

During the hearing, PMC counsel Ashutosh Kumbhakoni submitted that it was public money which it was trying to recover. Kumbhakoni referred to Supreme Court judgments which said no relief can be given from tax payment. “SC has always said that parties can pay taxes under protest. The same can be adjusted against future tax,” the counsel said.

“They were not in the earlier municipal limits. So all of sudden, all these taxes… In that proportion you (PMC) have done nothing. This is too harsh,” chief justice remarked.

Kumbhakoni pointed out that earlier petitions were filed challenging individual tax notices, which are pending before the SC. The HC, hence, kept the matter for hearing after the pronouncement of judgment by the apex court.

According to the plea, 1,600 objections were sent through written letters, 4,000 through email and 8,300 objections were raised online. “Farce” of a hearing was given to 1,600 persons who had sent letters. It was also resolved in the meeting that service charges levied by CIDCO should be stopped.

The PIL challenges the commissioner’s orders and demand notices sent by the PMC stating that the same are “illegal and bad in law” and that recovery of property tax on retrospective basis itself is contrary to Maharashtra Municipal Corporation Act. PMC seeks to levy taxes like education Tax, water tax, road tax, development charges, tree tax and fire service tax, which are not provided by it and the same are provided by CIDCO, the plea added.  

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