Managing Committee Members, Residents of Co-Op. Soc. & Friends

Volume - I, Issue No. 9

MANAGING COMMITTEE MEMBERS, RESIDENTS OF CO-OP. SOC. & FRIENDS,

This time I am writing about the exorbitant increase of property tax. For the outstanding work done we see awards being given by various organizations, associations and even the government. If we were to give awards for taxing the patience of the tax payer, abnormal increase in taxes, non utilization of the budgetary allocation than the Draconian Award for the same could go to our Bombay Municipal Corporation which has a huge budget more than the budget of some states of our country.

It is indeed shocking that increase in property tax in some areas is as high as 200% for residential premises and 300% for commercial premises. That too from the year 2010. This increase has been done in the guise of changing the valuation system. I am told that in Calcutta it was found difficult to increase a few paise in tram fare. Here in my opinion the increase has crossed all levels of decency and fair play. I am also informed that BMC spends about 65% of its budget on administrative expenses. No wonder clerks in BMC are financially richer than executives of some company not to mention the fact that for some BMC stands for Bachelor and Master of Corruption.

Very smartly the shift has been done from rateable value system to capital value system from 1/4/2010. Our politician friends had in the earlier years assured the members of the public that the increase would be marginal. On removal of the cap the tax determined today in column no. 18 of the tabular statement is ranging from 16 times to 30 times or more of the existing tax. The sugar coated pill of increase is given in a way whereby relief for five years is given to persons having flat less than 500 sq. feet so that the steam of opposition fizzles out. The ground reality could be that a monster is ready to snatch the hard earned money of the tax payer to the highest possible extent capable of imagination of a law abiding citizen. Very conveniently special notices are being send to the owners/occupants be it legal entities like co-operative societies, owners etc. Many of you must have received such notices informing you that if you have any objections you can submit the same within 21 days. You are informed that for details of the factors and categories of users you can refer the MCGM web site The said Rules which provide details of the factors and categories of users of buildings, nature and type of building, age factor, floor factor and weightage by multiplication to be assigned thereto and also the tax rate are very important for all citizens for calculating the tax payable. Property tax is demanded on built up area by adding 20% to carpet area. Any architect will tell you that built up area cannot be generalized. It can vary from project to project. The rules for fixing the capital value of land and buildings require in depth study and the help of a consultant. The base is the stamp duty ready reckoner for the year 2010. Special Notice under section 162(2) of the Mumbai Municipal Corporation Act 1888 are issued. The said Special Notices are being sent by the MCGM to landlords, housing societies etc. It is possible that the Society officials or the landlords may not circulate copies to the members or tenants respectively and the tax payers would be effected for no fault of theirs. The 21 days time given for response/objections is not at all adequate. The MCGM haswith almost an unlimited budget has takengood 3 years to set the new tax regime in motion but has given only 3 weeks to respond to the Notice and all the property facts and the parameters stated in the attachments.

The BMC it appears have learnt a lesson from the builders and in my opinion are on the verge of misguiding the common man. I ask the Municipal Commissioner and his team of officials? Does your conscious permit you to draft the format of appeal to be filed by the tax payer whereby on filing of the format prescribed by the BMC the right to protest itself is squeezed. Is the format not drafted in a way whereby the impact of increase in capital value is itself admitted by the tax payer? The implications of the same would be as and when the matter comes up for hearing in high court as well as other courts all that the government pleader has to do is to produce the copy of the appeal filed by the tax payer where the capital value itself is admitted by the tax payer. As a government officer bureaucrat has to collect the taxes but perhaps first time such type of appeal format is being prescribed. Look at the ground realities. The common man does not have the time money or energy to fight. If he is misguided by the authorities what is the alternative available to him? Is this not an encroachment of the rights of the common man.

1-2-2013 to 15-2-2013 HOUSING SOCIETY MATTERS Page No. 1

Volume - I, Issue No. 9

I may add that the government authorities have themselves admitted in Contempt Petition that state will not use the ready reckoner for calculating stamp duty. However the software of the stamp duty department itself is such that documents are accepted for registration only if the stamp duty is paid as per ready reckoner.

The complaint of yours under Section 163(1) & (2) of the Mumbai Municipal Corporation Act.1988. must specify

1. That Property Tax is a form of Compensatory Tax is evident from the provisions of the Mumbai Municipal Corporation, 1888 including interalia sections 61 and 140 to 143. It will be seen that even though the tax is termed as Property Tax, it is nothing but a levy for providing services.
2. In AIR 2006 SC 2550 the Hon’ble Supreme Court held that

(i)Tax is levied as a part of common burden. The basis of a tax is the ability or the capacity of the tax payer to pay;

(ii)The principle behind the levy of a tax is the principle of ability or capacity. In the case of a tax, there is no identification of a specific benefit and even if such identification is there, it is not capable of direct measurement. In the case of a tax, a particular advantage, if it exists at all, is incidental to the States' action;

(iii)In the case of a fee or compensatory tax, the "principle of equivalence" applies. The basis of a fee or a compensatory tax is the same. The main basis of a fee or a compensatory tax is the quantifiable and measurable benefit;

(iv)Ability or capacity to pay is measurable by property or rental value. Local rates are often charged according to ability to pay;

(v)The theory of compensatory tax is that it rests upon the principle that if the government by some positive action confers upon individual(s), a particular measurable advantage, it is only fair to the community at large that the beneficiary shall pay for it;

(vi)Compensatory tax is based on the principle of "pay for the value". It is a sub-class of "a fee"

CO-OPERATIVE SOCIETIES RESIDENTS,

USERS & WELFARE ASSOCIATION

(REG NO. MAH/MUM 1360/06 OF 2006 G.B.B.S.D.)

201, “Shrimad Darshan”, Plot No. 92, 2nd Floor, Opp. Tilak Road Lions Garden,

TPS III, Off. Shrimad Rajchandra Lane, Ghatkopar (E), Mumbai - 400 077.

Tel. Nos. 2102 36 32 / 2102 49 51 / 2102 21 95 / 2102 16 89Cell93240 38 095

E-mail:

Dated: 1/2/2013.

To,

SUB.:

(1)IRREGULARITY AS REGARDS ORDERS PASSED BY SOME DISTRICT DEPUTY REGISTRARS PERTAINING TO DEEMED CONVEYANCE.

(2)ALLEGED ILLEGALITY IN THE FORMATION OF THE DISTRICT OFFICES OF DISTRICT DEPUTY REGISTRAR-2, CO-OPERATIVE SOCIETIES, MUMBAI, DISTRICT DEPUTY REGISTRAR-3, COOPERATIVE SOCIETIES, MUMBAI AND DISTRICT DEPUTY REGISTRAR-4, CO-OPERATIVE SOCIETIES, MUMBAI,

Read:-

(I) Issue of standard guidelines pertaining to deemed conveyance.

1. Section 3 of the Maharashtra Land Revenue Code 1966.

2. Section 4 of the Maharashtra Land Revenue Code 1966.

3. List of divisions and districts in Maharashtra State drawn from the website of Government of Maharashtra.

4. Section 3 of Maharashtra Co-operative Societies Act, 1960.

5. Conferment of powers under section 3 of the Maharashtra Co-operative Societies Act, 1960 issued vide order No.CSL. 1493/1162/CR/47/15-C, dated 7th August, 1993.

6. Notification issued by Co-operation, Marketing & Textiles Department vide order No. CSL- 2012/CR-269/15-C, dated 11th September, 2012.

7. Government order issued by Co-operation, Marketing & Textiles Department vide 5/5/2012.

8. Government order issued by Co-operation, Marketing & Textiles Department vide 10/9/2012.

9. Section 5A of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963.

10.Section 10 of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963.

11.The conferment of the powers under section 5A of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 issued by Housing Department on 25th February, 2011 vide Order No. MOF. 2008/C.R. 24(Part II)/RR.2.

Respected Sir/s,

1. The association has received a number of representations from the members of the public pertaining to deemed conveyance. No doubt the intention of deemed conveyance is good for Co-operative Societies and other legal entities. However, some corrections pertaining to the same are required.

1. Sir, you are well aware of the fact that Transfer of Property Act and Indian Registration Act are Central Acts. It is humbly suggested that everyone is in favour of Deemed Conveyance. The only lacuna is people are not confident if Deemed Conveyance will result in the title in the property being transferred in the name of the legal entity.If steps are taken to amend Central Acts like Transfer of Property Act and Indian Registration Act definitely the comfort level of the members of the public will increase.

1. Sir, at times orders are being passed by the Ld. District Deputy Registrar of Co-operative Societies without application of mind. It is submitted with utmost request that there is a need to curb corruption and ensure that timely Orders are passed as per Serial No., and if there are any reasons for deviations from the Serial No., then reasons for the same should be recorded in writing. The association requests the Authorities to take a note of some of the orders which include orders whereby:

(a)Type of property is not clarified, that is if the property is freehold or leasehold.

(b)Sir, in some cases without naming the Societies I would like to point out that the acts of certain District Deputy Registrars are really shocking. In one particular case it is observed that without giving a hearing, the area of the property has been changed by passing a unilateral order, that too, after a span of more than five months from the date of passing of the order on deemed conveyance.

(c)Sir, in some cases it is observed that recreational ground is allotted to one particular Society inspite of the fact that the said Society does not have direct access to the said property. In between the Recreational Ground and the Society applying for Deemed conveyance there is another Society. Why can’t there be policy guidelines on such matters? Very conveniently the property has been allotted to the Society who had applied for Deemed conveyance. These are some examples of miscarriage of justice.

(d)Sir, In spite of there being court cases, applications are being entertained by the Ld. District Deputy Registrars. The need of the day is to immediately suspend such applications being submitted to the District Deputy Registrar of Co-operative Societies. The provisions of Sec. 10 of the Civil Procedure Code are crystal clear. The same are reproduced here as under:

Sec. 10:

Stay of Suit – No Court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties, or between parties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other Court in India having jurisdiction to grant the relief claimed, or in any Court beyond the limits of India established or continued by the Central Government and having like jurisdiction, or beforethe Supreme Court.

Explanation – The pendency of a suit in a foreign Court does not preclude the Courts in India from trying a suit founded on the same cause of action.

Sec. 11:

Res judicata. – No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court.

Explanation I. – The expression “former suit” shall denote a suit which has been decided prior to the suit in question whether or not it was instituted prior thereto.

Explanation II. – For the purposes of this section, the competence of a Court shall be determined irrespective of any provisions as to a right of appeal from the decision of such Court.

Explanation III. – The matter above referred to must in the former suit have been alleged by one party and ether denied or admitted, expressly or impliedly, by the other.

Explanation IV. – Any matter which might and ought to have been made ground of defence or attack in such former suit shall be deemed to have been a matter directly and substantially in issue of such suit.

Explanation V. – Any relief claimed in the plaint, which is not expressly granted by the decree, shall, for the purposes of this section, be deemed to have been refused.

Explanation VI. – Where persons litigate bona fide in respect of a public right or of a private right claimed in common for themselves and others, all persons interested in such right shall, for the purposes of this section, be deemed to claim under the persons so litigation.

Explanation VII. – The provisions of this section shall apply to a proceeding for the execution of a decree and references in this section to any suit, issue or former suit shall be construed as references, respectively, to a proceeding for the execution of the decree, question arising in such proceeding and a former proceeding for the execution of that decree.

Explanation VIII. – An issue heard and finally decided by a Court of limited jurisdiction, competent to decide such issue, shall operate as res judicata in a subsequent suit, notwithstanding that such Court of limited jurisdiction was not competent to try such subsequent suit or the suit in which such issue has been subsequently raised.