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Levying of property tax on Parsi Atesh- Behram Agiaries and Religious Institutions

Saturday, November 16, 2013

A writ petition filed by the trustees of Atash Behrams, Agiaries and religious institutions comprising of Parsi Zoroastrian faith against state of Maharashtra, Municipal Corporation of Greater Mumbai, the commissioner – Municipal Corporation of Greater Mumbai etc., challenging the levy of increased property tax on the basis of capital value and was admitted by their Lordships the Hon’ble Chief Justice Mr. Mohit Shah and the Hon’ble Mr. Justice M.S. Sanklecha on 4th October 2013.

The Agiaries are on lands which are specifically designated for religious purposes and hence the same cannot be sold or disposed off and do not have any market value. Around December 2012, the Agiaries in Mumbai received heavy property tax Bills from the Bombay Municipal Corporation.

The Petitioners submit that the levy of tax on Capital value is unconstitutional, exhorbitant and confiscatory in nature. The rules for fixing capital value of Lands and Buildings have come into force from 2nd March 2012 & hence they have retrospective effect. The rules cannot have retrospective effect and hence they are illegal and special notices issued on that basis are bad in law. The levy of tax is ultra vires Article 265 of the Constitution of India as the levy is confiscatory in nature. The levy is also hit by Article 14 of the Constitution of India as inter-alia the basis for the levy takes into account irrelevant factors and ignores relevant factors.

The Stamp Duty Ready Reckoner is a guide for framing stamp duty for the purposes of valuation of property in the matter of transfer. The said basis is unsatisfactory basis for the purpose of levy and collection of the property taxes. The provisions of The Maharashtra Act 11 of 2009 and The Maharashtra Act 11 of 2011 as set out in the petition are void and unconstitutional for the reasons set out in the Writ Petition.

Senior Counsel Mr. Rafiq Dada informed the Court that the Petitioners have already paid the property tax till today under protest and without prejudice to their rights, so that no penal interest is payable in future . Their Lordships have directed the Petitioners to deposit only 25% for the period from 1st October 2013. In the meantime, the Respondents are directed not to take coercive action against the Petitioners.

The Writ Petition is fixed for hearing on 25th November 2013. Mr. R. A. Dada, Senior Advocate, Mr. Cherag Balsara, Mr. B. H. Antia with Mr. Homiar N. Vakil i/b Messrs. Mulla & Mulla & Craigie Blunt & Caroe appeared for the Petitioners. Ms. Sharmila Modle appeared on behalf of BMC.

In view of the aforesaid development, the agiaries and Religious Institutions should immediately become the members of Atashbehrams, Agiaries & Religious Institutions Society so that they get the benefit of this Order and has to pay less property tax for period 16th October 2013 onwards. Mr. Bomi H. Hansotia, the Secretary of the Society thanks Senior Counsel Mr. R.A. Dada , Mr. Cherag Balsara, Mr. B. H. Antia, Mr. H. N, Vakil. Mr. Dinshaw Mehta - Chairman of Parsi Punchayet Funds & Properties, Mr. Bomi Mistry - Architect and Mr. S.S. Rahalkar - Architect, for selfless services and co-operation rendered in the above matter.

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