Bombay HC
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The Bombay HC recently unapproved three major rules of Maharashtra Municipal Corporation Act, 1988 that worked as a base for the Brihanmumbai Municipal Corporation [BMC] to implicate taxes.

In 2009, the Brihanmumbai Municipal Corporation amended this act and introduced a new method to calculate tax liability. After which in April 2010, the civic body switched to a new assessment rule to make the entire process more transparent.

In its verdict, the Bombay High Court said that, rules 20, 21 and 22 of the Capital Value Rules of 2010 and 2015 stands unapproved they are ultra vires to the Corporation Act. All assessments and bills issued under these rules are repressed.

The High court gave this decision while hearing multiple petitions filed by homeowners’ association, developers’ associations and charitable institutions against both the State Government and the Municipal Corporation. The petitioners opposed property tax assessment rules that showed outstanding tax of worth Rs. 10 crore and also said that the tax accumulated on the basis of ready reckoner rate don’t show the real value of a property.

In the real estate market of Mumbai city, the Ready reckoner rates also known as the circle rates are high in some areas like Bandra, Andheri, Juhu, Girgaum Chowpatty, Mahim and Malabar Hills. The rates vary all over the city as it largely depends on the property type, market value of the area and amenities that are available.

However, the High Court kept the Constitutional validity of the 2009 amendment unchanged. This amendment was introduced to the Corporation Act.