New Delhi, August 1
In a major financial relief to the Punjab government, the Supreme Court today upheld the validity of its amended laws on collection of house tax, which would percolate in the savings of crores of rupees to the state.
The Punjab and Haryana High Court, in its judgement of August 27, 2001, had struck down the 1994 amendment in the Punjab Municipal Act aimed at streamlining the tax collection and the municipalities were directed to refund the house tax so collected to the property owners.
The amendment in the house tax laws was brought by the government by inserting Sections 3 (1)(b) 3(8aa) in the Municipal Act for the purpose of calculating annual house tax by making a distinction between the house owners and tenants.
The high court had struck it down by allowing a bunch of petitions by property owners holding that the amended Act was discriminatory and violated Article 14 (equality before law) of the Constitution.
The apex court Bench of Justices S.H. Kapadia and B. Sudershan Reddy, however, set aside the high court order allowing the appeal of the Punjab government and various municipalities against the impugned judgement.
As per the amended law, for the purpose of calculating the house tax, annual value shall be 5 per cent on the sum obtained by adding the present market value of land and estimated cost of the building with less 10 per cent as depreciation.It further provided to make reasonable classification quo the annual value of building which were rented out, which were to be governed as per the actual rent for which land and building was let out.
The apex court accepted the stand of the Punjab government that the provision of making a distinction between house owners and tenants for calculating the house tax as laid in Sections 3(1)(b) and 3(8aa) of the amended Act, was aimed at rationalising the calculation of house tax quo property owners and tenants, state’s standing counsel in the Supreme Court Kuldip
Singh said.
Singh said the court was convinced with the arguments of the state that such a classification was necessary and reasonable to streamline the collection of the house tax.
Since the government was collecting the tax as per the amended law after it was notified by the Punjab government in 1994, any adverse order from the apex court would have upset the tax collection worth several hundred crores by the municipalities.
