Case Note & Summary
The petitioners, occupants of premises in a building in Dahisar, Mumbai, challenged a warrant of attachment dated 30-3-1999 issued by the Municipal Corporation of Greater Mumbai for non-payment of property tax. The property tax arrears pertained to two periods: 1-4-1978 to 30-9-1978 and 1-4-1986 to 30-9-1998. The petitioners claimed that their ancestors were original owners, but the property was redeveloped by M/s. Jay Vijay under an agreement. The CC and IOD were issued in 1981 and 1982, part occupancy certificate in 1986, and full occupancy certificate in 1987. The petitioners contended they had paid property tax on a pro rata basis for their premises up to 2011, including the period anterior to the warrant. They relied on Section 209 of the Bombay Municipal Corporation Act, 1888, which allows recovery of tax on a pro rata basis from occupants. The court held that for the period up to the full occupancy certificate (16-5-1987), the liability was of the erstwhile owners. The petitioners had paid their share for the subsequent period. The court quashed the warrant of attachment insofar as it related to the petitioners' premises and directed the Corporation to issue separate bills to the petitioners and other occupants for their respective shares. The petition was allowed in those terms.
Headnote
A) Municipal Law - Property Tax Recovery - Pro Rata Liability of Occupants - Section 209 Bombay Municipal Corporation Act, 1888 - The court considered whether the Municipal Corporation could attach the entire building for arrears of property tax when the petitioners had paid their proportionate share. The court held that under Section 209, the Corporation is obliged to recover property tax on a pro rata basis from each occupant and issue separate bills. The warrant of attachment was quashed in respect of the petitioners' premises, and the Corporation was directed to issue separate bills to the petitioners and other occupants. (Paras 1-7) B) Municipal Law - Property Tax - Liability for Period Prior to Occupancy Certificate - The court held that the liability for property tax for the period up to the issuance of the full occupancy certificate (16-5-1987) is that of the erstwhile owners, not the occupants. The petitioners' liability for tax after that date was discharged by payment. (Paras 6-7)
Issue of Consideration
Whether the Municipal Corporation can attach the entire property for non-payment of property tax when the petitioners have paid their pro rata share, and whether the Corporation is obliged under Section 209 of the Bombay Municipal Corporation Act, 1888 to recover tax from each occupant separately.
Final Decision
The court allowed the petition in part. The warrant of attachment dated 30-3-1999 was quashed insofar as it related to the premises in occupation of the petitioners. The Municipal Corporation was directed to issue separate bills to the petitioners and other occupants for their respective shares of property tax on pro rata basis. The Corporation was also directed to recover the tax for the period up to 16-5-1987 from the erstwhile owners.
Law Points
- Property tax recovery on pro rata basis from occupants
- Section 209 Bombay Municipal Corporation Act
- 1888
- Liability of erstwhile owners for period prior to occupancy certificate
- Municipal Corporation's obligation to issue separate bills
