Court slams KMC for arbitrary enhancement of property valuation without notice, orders refund or adjustment of excess tax.
In a significant judgment, the Calcutta High Court has quashed the retrospective enhancement of property valuation by the Kolkata Municipal Corporation (KMC) concerning the premises owned by M/s. Popat and Kotecha Property. The Court, presided over by Justice Rai Chattopadhyay, held that the enhancement of the Annual Valuation from Rs. 20,13,900 to Rs. 22,15,290, with retrospective effect from the 4th quarter of 2016-17, was unsustainable in law. The Court found that the KMC's action violated principles of natural justice and lacked statutory foundation.
The petitioner, M/s. Popat and Kotecha Property, challenged the tax demands and supplementary bills issued by KMC, alleging that the enhancement was carried out without proper notice or hearing, and without any statutory basis. The petitioners were represented by Senior Advocate Mr. Mainak Bose, who argued that the enhancement was discovered only through the KMC's website and was made in violation of the Kolkata Municipal Corporation Act, 1980.
Justice Rai Chattopadhyay criticized KMC for acting on an undisclosed policy that attempted to impose fiscal burdens arbitrarily, violating Article 14 of the Constitution. The Court emphasized that any tax levy must have a clear statutory foundation and cannot be based on administrative convenience or internal decisions.
The Court ordered KMC to refund the excess amount of Rs. 1,97,092 retained from the petitioners or adjust it against future lawful demands with the petitioner's consent. Furthermore, KMC was directed to follow proper statutory procedures, including issuing notices and granting hearings, before undertaking any fresh assessments.
This ruling reiterates the need for municipal authorities to adhere strictly to statutory provisions and maintain transparency and fairness in taxation matters. The judgment serves as a reminder that administrative actions affecting citizens' fiscal liabilities must be backed by clear legal authority and procedural fairness.
Bottom line:-
Municipal authorities must adhere strictly to statutory provisions while enhancing property valuation or imposing taxes. Retrospective enhancement of property valuation without proper notice, hearing, or statutory basis is unsustainable in law.
Statutory provision(s):
Kolkata Municipal Corporation Act, 1980, Sections 174, 179, 184, 193, 196, 214, 216, Constitution of India - Article 265, Article 14
