Reduction in Property Tax Letter

Asif Zakaria
Ex Municipal Councillor
Ward No. 101 - Bandra (VWest)
6x Member : Standing Committee
Zakaria House, 97, Prof. Almeida Road, Bandra (West), Mumbai - 400 050.
Tel.: 2642 5070" Mobile : 9820125638 " E-mail :email@abzak. com
5th April 2023

Dr. Iqbal Singh Chahal,
Municipal Commissioner,
BrihanmumbaiMahnagaraplaika,
Mumbai.
Sub: Reduction in Property Tax and re-working of Capital Value system

subsequent to dismissal of Special Review Petition in Hon'ble Supreme Court.
The above issue has been raised by me for the past decade at various meetings of
Standing Committee, Budget and Corporation since the Capital Valuation system was
implemented by the BMC in 2012.
The Capital Valuation Rules 2010 implemented in March 2012 were defective, faulty and
not in consonance with the Amendment Act were repeatedly highlighted in the past in
several meetings of the Standing Committee, Budget Meetings and Corporation.
Eventually, Hon'ble High Court by its order dated 24 th April 2019 had set aside certain
rules more particularly Rule no. 20, 21 and 22. Further the Hon'ble Supreme Court by its
order dated 7th November 2022 has upheld the decision of the Hon'ble High Court and
have further dismissed the Review Petition.
Salient points of the Orders as are under :

1. Assessment to be from the date of implementation of the Rules i.e. from 2012 onwards
2. Rule 20,21 and 22 of the CVS Rules 2010 and 2015 have been struck.
3. Corporation has been directed to reframe the said rules.
4. Special Assessment order and final bills raised/issued under CVS w.e.f. 2010 are
quashed and set aside.
5. Corporation to re-determine the Capital Value of Property for assessment of taxes and
followthe process as provided in the Act.
6. Assessment of vacant land / open land on FSI 1 and not on potential FSI.
As aresult, following changes will have to be made :

1) Property tax for the year 2010 to 2012 to be taxed as per the Rateable Value system.
2) Assessment of Capital Valuation on the basis of carpet area instead of Built up area.
Further the rate under the Stamp Duty Ready Reckoner is a BUA rate which has a
component of 1.2 factor.
3) Open/ Vacant land to assessed on FSI 1and not on potential FSI. The Corporation
was charging tax as per the potential of the plot or approved plan with 2.5 FSI/ 4 FSI
as per the project.
Asif Zakaria
Ex Municipal Councillor
Ward No. 101 - Bandra (West)
Member :Standing Committee
Zakaria House,97, Prof. Almeida Road, Bandra (West), Mumbai - 400 050.
Tel.: 2642 5070 " Mobile : 9820125638" E-mail : [email protected]
4)As regards to the Old building assessment/arriving on the capital value the
depreciation factor was adopted from rules and not from the Ready Reckoner. To
consider the depreciation from Ready Recknor as building rates are taken from Ready
Reckoner which has been fixed considering the guideline of ready reckoner.
Allthe above will need a major reworking of the Capital Value System and a refund will
need to be given to the citizen who has paid the full amount along with interest as per
section 140A(2) as in the majority of the cases the Corporation has wrongfully forced the
citizens in paying the full amounts.
The same being further justified as the Corporation in terms of the Hon'ble High Court
interim order while accepting the payment of 100% (RV) and incremental 50% (CVS),
had taken the affidavit from the tax payers stating that they in case the court negatives
the challenge raised by the Petitioner, the tax payers shall pay the balance amount along
with the interest.
As per theinformation provided by the Corporation at the StandingCommittee meeting of

7th February 2020, there was an outstanding of Rs. 16,167.78 Crores out of which Rs.
2218.72 Crores was of the old Rateable Value system and Rs.13949.06 Crores was of the
New Capital Value System post 2010. The amount might have further increased upto
2023.
The same clearly highlights that due to faulty implementation and despite raising and
highlighting the issue repeatedly for 10 years, Corporation has failed in the proper
execution of the Capital Value System and the same has resulted in amajor predicament
that will have a severe financial implications on the working of the BMC as the property
tax is the 2nd largest revenue source to the Corporation.
Please find attached herewith all previous correspondence which is self-explanatory.

Irequest you to kindly look into the matter urgently and resolve the long pending issue to
its logical end as per the decision and order of the Hon'ble High Court and Supreme
Court.
Asif Zakaria
C.c. Shri. P. Velrasu, Additional Municipal Commissioner, Projects

Shri. Sunil Dhamane, Jt Mun. Commissioner, 6th Floor
The Assessor & Collector,Assessment &Collection Department,BMC
IN THE SUPREME COURT OF INDIA
INHERENT JURISDICTION
Review Petition (Civil) No 298 of 2023

in
Civil Appeal No 8241 of 2022
...Petitioner(s)
Property Owner's Association and Ors
Versus
State of Maharashtra and Ors ...Respondent(s)
WITH
Review Petition (Civil) No of 2023

(D No 415 of 2023)
in
Civil Appeal No 8239 f 2022
ORDER
1 Applicationfor listing the review petition in open Court is rejected.

2 Delay condoned.
Having perused the review petitions, there is no error apparent on the face of the
record. No case for review under Order XLVII Rule 1 of the Supreme Court Rules
2013. The review petitions are, therefore, dismissed.
...cjl.
[Dr Dhananjaya Y Chandrachud]
Validity wekpown
Digitally spy
Sanjay Ku .J.
Reason:
[Ajay Rastogi]
NewDelhi;
March 14, 2023
-S
ITEM NO.1006 SECTION III
SUP RE ME CO URT 0 F IND I A

RECORD OF PROCEEDINGS
R.P.(C) No. 298/2023 in C.A. No. 8241/2022
PROPERTY OWNER'S ASsocIATION & ORS. Petitioner (s)

VERSUS
STATE OF MAHARASHTRA & ORS. Respondent (s)

(FOR ADMISSION)
WITH
Diary No(s). 415/2023 (III)
(WITH IA No. 1126/2023 - APPLICATION FOR LISTING REVIEW PETITION IN
OPEN COURT, IA No. 37768/2023 CONDONATION OF DELAY IN FILING
REVIEW PETITION, IA No. 1128/2023 - STAY APPLICATION)
Date : 14-03-2023 These petitions were circulated today.
cORAM
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE AJAY RAST0GI
By Circulation
UPON perusing papers the Court made the following

0RD ER
1 Applicationfor listing the review petition in open Court is rejected.
2 Delay condoned.
The review petitions are dismissed in terms of the signed order.
(SANJAY KUMAR-I) (SARO J KUMARI GAUR)

DEPUTY REGISTRAR ASSISTANT REGISTRAR
(Signed order is placed on the file)

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Asif Zakaria

5th April 2023

Sub: Reduction in Property Tax and re-working of Capital Value system

Salient points of the Orders as are under :

As aresult, following changes will have to be made :

As per theinformation provided by the Corporation at the StandingCommittee meeting of

Please find attached herewith all previous correspondence which is self-explanatory.

C.c. Shri. P. Velrasu, Additional Municipal Commissioner, Projects

Review Petition (Civil) No 298 of 2023

State of Maharashtra and Ors ...Respondent(s)

Review Petition (Civil) No of 2023

1 Applicationfor listing the review petition in open Court is rejected.

SUP RE ME CO URT 0 F IND I A

R.P.(C) No. 298/2023 in C.A. No. 8241/2022

PROPERTY OWNER'S ASsocIATION & ORS. Petitioner (s)

STATE OF MAHARASHTRA & ORS. Respondent (s)

UPON perusing papers the Court made the following

1 Applicationfor listing the review petition in open Court is rejected.

The review petitions are dismissed in terms of the signed order.

(SANJAY KUMAR-I) (SARO J KUMARI GAUR)

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