The Supreme Court has directed the Brihanmumbai Municipal Corporation (BMC) to rework the capital value of all properties in Mumbai and refund citizens who paid property tax for the years 2010 to 2012 as per the Capital Valuation System (CVS). The high court had set aside certain rules framed by the BMC for retrospective tax assessment and directed them to frame new rules and issue fresh bills. This decision will have significant implications for the BMC and the citizens of Mumbai as property tax is the second largest source of revenue for the civic agency.
The Brihanmumbai Municipal Corporation (BMC) has been directed by the Supreme Court to rework the capital value of all properties in Mumbai for the years 2010 to 2012 as per the Capital Valuation System (CVS). This decision comes after the Supreme Court rejected a review petition filed by the BMC challenging a Bombay High Court order from 2019.
The High Court had set aside certain rules framed by the BMC for retrospective tax assessment and directed them to frame new rules and issue fresh bills. Asif Zakaria, a former Congress corporator, had repeatedly raised the issue of faulty implementation of tax assessment, stating that property tax is the second largest source of revenue for the civic agency. Therefore, the Supreme Court's decision will have significant implications for the BMC and the citizens of Mumbai.
The BMC is now obligated to reassess the properties and determine their capital value for the purpose of property tax assessment. The corporation is also required to refund citizens who have paid property tax for these years based on the previous rules that have now been set aside. The court has directed the BMC to frame new rules and issue fresh bills for property tax assessment.
However, the Bombay High Court, in its order from 2019, had directed that the assessment as per the CVS must be done prospectively from 2012 when the rules came into being, and not with retrospective effect. The high court had quashed the special assessment order and bills raised under the CVS from 2010 onwards.
The Supreme Court's decision and the high court's order have significant implications for the BMC and the citizens of Mumbai. The refund of property tax for the years 2010 to 2012 will likely result in a substantial financial burden on the BMC, as they will have to reimburse the taxpayers who have already paid property tax based on the now set-aside rules.
Furthermore, the requirement to rework the capital value of properties and issue fresh bills will involve administrative and logistical challenges for the BMC. This case highlights the importance of following due process and complying with the rules and regulations while levying and assessing property taxes.
The decision is significant because property tax is the second largest source of revenue for the BMC. The BMC collects property tax from residential and commercial properties based on the capital value of the property. The capital value is determined by the CVS, which takes into account factors such as location, type of construction, and age of the building.
In conclusion, the Supreme Court's decision to rework the capital value of all properties in Mumbai for the years 2010 to 2012 as per the CVS will have significant implications for the BMC and the citizens of Mumbai. The refund of property tax and the requirement to reassess the properties will result in a financial burden on the BMC, and administrative and logistical challenges. This case highlights the importance of following due process and complying with the rules and regulations while levying and assessing property taxes.
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