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Owners can pay property tax under old regime: Bombay high court

Providing relief to property tax payers, the Bombay high court, in an interim order, has directed some property owners to go by the old regime and to pay 25% of the differential amount.

A bench of Chief Justice Mohit Shah and Justice M S Sanklecha in October admitted a petition filed by Atash Behrams, Agiaries and Religious Institutions Welfare Society, which challenged the validity of the new property tax structure introduced earlier this year. Under the new system, the tax is calculated on the basis of the capital value of a property, and the age of a building, its location and use are taken into account. Experts contested the new "flawed" system could push up the tax by 300% or more.

The BMC also withdrewexemptions for charitable institutions. Bombay Hospital, a charitable institution, was the first to assail the hike in court, challenging the system and a Rs 2-crore bill for 2010 to 2013.

Property tax under the old regime was calculated according to the rateable value of a building, based on the expected reasonable rent it could attract. The Bombay Hospital and Atash Behrams petitions led to a slew of other petitions being filed in the HC. Property Owners Association, the Parsi Punchayat Funds and Properties, The Foundation for Medical Research, Mota Mandir Trust, the Indian Hotels Co and a huge bunch of almost 40 other pleas flooded the HC. They all challenged the new property tax structure "unconstitutional, exorbitant and confiscatory".

On December 23, the HC directed the state once again to file its reply. The BMC said it would file one by January 16.The HC adjourned the matter to January 29 but directed the petitioners to pay municipal taxes at the pre-amended rates and also the additional tax at 25% of the differential tax between the tax payable under the old and new regime.

Article referred: http://timesofindia.indiatimes.com/city/mumbai/Owners-can-pay-property-tax-under-old-regime-Bombay-high-court/articleshow/28163534.cms

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