Shocked over Chennai Corporation having lost revenue to the tune of ₹ 1,841.48 crore due to non revision of property tax since 2002, the Madras High Court has directed the Municipal Administration Secretary and Corporation Commissioner to spell out the date by which the tax rates would be revised.
Justice N. Kirubakaran warned both the officials of being summoned to the court if they failed to comply with the direction by Monday. He also pointed out that the Commissioner, in his capacity as Special Officer, had all the authority to revise the rate of tax in the absence of an elected council.
The judge came to know of the Corporation not having revised the property tax rates for the last 15 years during the hearing of a writ petition filed by two shop owners from Koyambedu market challenging a demand to pay property tax from 1996 to 2008. He was told that the last revision took place in 1998 though it was supposed to be carried out once in four years.
As per law, the tax should be increased by 25% for residential buildings and 100% for commercial buildings during every revision. However, the successive Corporation Councils failed to revise the tax rates between 2002 and 2014 despite the officials having submitted a proposal through a standing committee in 2010. “It is seen that only elected representatives were reluctant to revise the property tax obviously for political considerations… If revisions had been made periodically, more income would have been generated and more infrastructure, amenities and facilities would have been provided by the Corporation,” the judge said.
Expanded limits
Also referring to the territorial limits of the Corporation having been expanded in the recent years by annexing parts of Tiruvallur and Kancheepuram districts, the judge said that the revenue would have increased manifold if tax had been collected from all IT companies, multinational corporations and other multi-storey buildings.
Rejecting the Corporation’s contention that tax revision was a policy decision which required approval of the council, the judge said: “In the absence of the elected council whose period had already expired on October 24, 2016, the Commissioner cannot keep quiet and avoid revision citing absence of elected council.”
On the submission that a fresh proposal for revision would be submitted to the council after it is elected, he said: “It is not known as to when the local body elections would be held. Citing the absence of the council, the revision cannot be postponed endlessly causing huge revenue loss to the Corporation.”
Mr. Justice Kirubakaran also said that the revenue from property tax collection would have jumped from the current receipt of around ₹260 crore to nearly ₹2,000 crore if the revisions had taken place in 2002, 2006, 2010 and 2014 and all buildings in the Greater Chennai Corporation limits had been brought into the tax net.
