Supreme Court ruling halts BMC's plans to auction 67 attached properties in Mumbai

Supreme Court ruling halts BMC's plans to auction 67 attached properties in Mumbai

The Supreme Court rejected its review petition and upheld the Bombay High Court's order fixing capital values.

Shefali Parab-PanditUpdated: Friday, April 21, 2023, 10:00 PM IST
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Mumbai: The BMC's plans to auction 67 attached properties have been put on hold after the Supreme Court rejected its review petition and upheld the Bombay High Court's order fixing capital values. The civic body has attached 3,945 properties worth over ₹2,237 crore since 2010. The assessor and collection department had started the process of appointing the auctioneer, and it would have been a second auction after 2012.

Property tax is the second-highest source of income for BMC

After the abolition of Octroi, property tax is the second-highest source of income for the municipal corporation. It also contributes 24% of revenue to the BMC's kitty. So after facing a severe cash crunch during the pandemic, the civic body started cracking down on property tax defaulters. In the first phase, 67 attached properties were planned to be auctioned. For which, the BMC started the process of appointing three professional agencies, one for the valuation of the properties and one for searching for other investments of the defaulters. The third agency will have to search for immovable properties registered in the names of the defaulters, collecting documentary evidence of ownership of those properties and the interests and directorships of the defaulters.

BMC will now have to rework capital value of properties

The appointment of the agencies was underway, and the auction was to be held in the next two months. However, following the court's direction, the BMC will now have to rework the capital value of all properties in Mumbai and refund citizens who have paid property tax for 2010 to 2012 as per the Capital Valuation System. "We cannot auction the attached properties now since we have to first fix their capital values and would also have to calculate the actual outstanding amount of the defaulters. It is also difficult to refund thousands of crores of rupees, so we are taking a legal opinion," said a civic official.

In a major setback to the civic body, the SC rejected in March a review petition filed by the BMC challenging a HC order of 2019 that set aside certain rules framed by the BMC for retrospective tax assessment. As per the SC direction, the civic body has to frame new rules and issue fresh bills to the taxpayers. The court has also quashed the special assessment order and bills raised under the new system from 2010 onward. So the BMC will have to refund or adjust the excess amount collected from the citizens in future bills.

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