Ruling on October 4, 2013 BHC chief justice Mohit Shah and justice M. S. Sanklecha permitted the AARIWS members to "deposit without prejudice to the rights and contentions of the parties, 25 percent of the next bill for the period from October 1, 2013 onwards."
(From left) Dinshaw Mehta, Burjor Antia, Homiar Vakil: New valuation system "unconstitutional"
The justices noted that the petitioners "have already paid the property tax as per the impugned bill under protest for the period up to September 30, 2013 but interim relief may be granted for the period from October 1, 2013 onwards." The method for calculating the property tax has been changed by the Bombay Municipal Corporation (BMC) from a ratable value — the amount the property would realize if it were rented — to a capital value, the amount the property would fetch if sold. One or the other system is used by municipal corporations throughout the world.
According to a report on the court hearing published in the Hindustan Times (HT, October 5, 2013), their lordships suggested the BMC "consider a scientific mechanism for calculating property tax along the lines of Ahmedabad where the area of the premises, the type and age of the building is taken into consideration while determining the tax."
HT states the new Bombay system considers the "basic value of the property, user category, ready reckoner rate, built up area among others to derive the tax. The judges opined (the method) is complicated and not citizen friendly." The Ahmedabad system considers age, location and carpet area.
Rajendra Mehta, chairman of the Property Lessors Association, told the Economic Times (October 7, 2013): "Under the earlier system, charitable organizations were offered certain concessions and those are not available in the new capital value system. These are charitable trusts and have nothing to do with capital value as there is no commercial interest involved here."
Aside from AARIWS the other petitioners are the trustees of the Zarthoshti Anjumanna Atash Bahram, The Zoroastrian Radih Fund, The Parsi Zoroastrian Mazgaon Anjuman’s Dar-E-Meher Trust Fund and the Dadysett Charity Trust. The AARIWS has around 25 to 30 members, all of whom can avail of the relief. The new levies would have increased, for example, the annual tax burden on the Dadysett Charity Trust from Rs 1,89,680 in 2010 to Rs 29,45,740, in 2011, an increase of 1,553 percent! The Trust receives income from shops on the premises but the revenue is utilized "solely for the purpose of maintaining the place of worship," states the AARIWS writ petition.
The suit was filed in mid-2013 against the State of Maharashtra, the Municipal Corporation of Greater Bombay (BMC), the Municipal Commissioner and the BMC Assessor and Collector.
The Maharashtra Property Tax Board Act was passed by the State legislative assembly on March 10, 2011 to do amongst other things, "review the property tax system and to suggest the suitable basis for valuation of properties and assessment of property taxes," notes the writ petition. The new taxes were then levied with retrospective effect from the year 2010-2011 resulting in substantial amounts having to be paid out.
According to a report in The Indian Express (IE) of October 10, 2013, after delaying issuance of "new property tax bills for the second time, the BMC finally sent out bills in January 2013." The deadline for payment was September 30, 2013. A two percent monthly penal interest is charged on outstanding amounts after the due dates. Observes the AARIWS writ petition, "The assessees who have already paid the tax based on (the) old regime are now required to pay any further differential amount which may arise."
Mehta faced flak from some trustees of religious institutions who alleged his motives to forge the alliance was a ploy by the BPP to gain control of the community’s religious assets. Mehta refrained from heading AARIWS partly for that reason and also as he explained he had enough BPP responsibilities that required his presence in the trust’s office till 9 p.m. on most days.
A note on the court proceedings prepared by Antia and Vakil for Parsiana explains the points put forth by the petitioners before the court.
"The agiaries are on lands which are specifically designated for religious purpose(s) and hence the same cannot be sold or disposed of and do not have any market value...
"The petitioners submit that the levy of tax on capital value is unconstitutional, exorbitant and confiscatory in nature. The rules for fixing capital value of lands and buildings have come into force from March 2, 2012 and hence they have retrospective effect. The rules cannot have retrospective effect and hence they are illegal and special notices issued on that basis are bad in law...
"The Stamp Duty Ready Reckoner is a guide for framing stamp duty for the purposes of valuation of property in the matter of transfer. The said basis is unsatisfactory… for the purpose of levy and collection of the property taxes…
"Senior counsel Rafiq Dada informed the court that the petitioners have already paid the property tax till today under protest and without prejudice to their rights so that no penal interest is payable in future. Their lordships have directed the petitioners to deposit only 25 percent for the period from October 1, 2013. In the meantime, the respondents are directed not to take coercive action against the petitioners.
"Their lordships have directed the Municipal Corporation of Greater Mumbai to file affidavit in reply on or before November 11, 2013. The affidavit in rejoinder is to be filed by the petitioners on or before November 22, 2013. The writ petition is fixed for hearing on November 25, 2013. Dada, Cherag Balsara, Burjor H. Antia with Homiar Vakil appeared for the petitioners. Sharmila Modle appeared on behalf of (the) BMC.
"In view of the aforesaid development, the agiaries and religious institutions should immediately become members of AARIWS so that they get the benefit of this order and have to pay less property tax," stated the note. Bomi H. Hansotia, the secretary of the Society thanked the lawyers, Dinshaw Mehta and architects Bomi Mistry and S. S. Rahalkar for their efforts. While Dada charged a third of his usual fees, Antia, Vakil and Balsara gave their services pro bono.
The office bearers of AARIWS are Kaizad Hazari, president (Mazgaon Anjuman Agiary), Nasha Jussawalla, vice president (R. N. Rustom Faramna Agiary), Hansotia, (Karani Agiary), Mehli Colah, treasurer (J. D. Amaria Sodawaterwalla Agiary), Dinshaw Mehta (BPP), Percy Dalal (Kappawala Agiary), Behram Ardeshir (Dadysett Agiary and Atash Behram), Godrej Fanibanda (Langrana Godiwala Agiary) and Dr Aspi Mehta (Mevawala Agiary).