Today pearls april 2 by mhc adv sekarreporter1: *PEARLS OF WISDOM* *[Hon’ble Justices Uday U. Lalit, C.J. and Ajay Rastogi, J.]* The Hon’ble Supreme Court in the case of *Municipal Corporation of Greater Mumbai & others vs. Property Owners’ Association & others [(2023) 3 SCC 258]* has held that Article 243-X of the Constitution of India states

[4/1, 09:23] sekarreporter1: https://twitter.com/sekarreporter1/status/1642012098791358464?t=4u2XEfPic4qwxq_RZKo3rw&s=08
[4/1, 09:23] sekarreporter1: [4/1, 09:20] sekarreporter1: Today April 2
[4/1, 09:21] sekarreporter1: *PEARLS OF WISDOM*

*[Hon’ble Justices Uday U. Lalit, C.J. and Ajay Rastogi, J.]*

The Hon’ble Supreme Court in the case of *Municipal Corporation of Greater Mumbai & others vs. Property Owners’ Association & others [(2023) 3 SCC 258]* has held that Article 243-X of the Constitution of India states april 2 that the Legislature of a State may by law authorize a Municipality to levy, collect and appropriate such taxes etc. in accordance with such procedure and subject to such limits as maybe specified in law. The exercise undertaken by the Maharashtra Legislature in the instant case is completely consistent with the empowerment relatable to Article 243-X of the Constitution and does not, in any way go counter to the said empowerment and there is no necessity that the exercise should be initiated through the finance commission alone as per Article 243-Y of the Constitution.

It is further held that the Mumbai Municipal Corporation Act, 1888 was amended by the Maharashtra Act, XI of 2009. The amendment incorporated an option and empowered the corporation to levy property tax on basis of capital values as an alternative to the earlier method of levying property tax on the basis of rateable value, that is the annual rent for which such buildings or lands might reasonably be expected to be let from year to year.

1) As per the impugned provisions, the capital value of lands and buildings is adopted only as a measure to determine the tax on lands and buildings.

2) There is no attempt to levy tax on capital value of assets. Therefore, the amended legislation providing for the levy of property tax by a Municipality on the basis of capital values will be covered by Entry 49 of List II and not Entry 86 of List I of the Schedule VII.

3) The provisions of Sub-Section (1-A) & (1-B) of the amended Section 154 provide that for the purpose of determining capital value, only the present physical attributes and the status of the land and building can be considered and not the future prospects of the land.

4) The Capital Value Rules, 2010, having come into force on 20.03.2012, the levy and computation of property tax on capital value would be available and possible on land with effect from 20.03.2012 and not with any retrospective operation. The capital value of land and building must be based on situation _“in praesenti”_.

5) Since Rule 20 of the Capital Value Rules, 2010 and the Capital Value Rules, 2015, is intended on proposed utilization of transfer of development right which has been approved under the building plan submitted for approval, this component is the intended use or exploitation in future and not something which is available _”in praesenti”_.

6) Therefore, the said provision of the Rule 20 is _ultravires_ of the provisions of Sub-Section (1-A) and (1-B) of Section 154 of the Mumbai Municipal Corporation Act, 1888.