Summary
The High Court, in a PIL brought by a corporator, had set aside the Akola Municipal Corporation's 2017 resolutions revising property tax for 2017-18 to 2021-22. The Supreme Court held that the PIL was really an individual grievance used to bypass the statutory appeal under Section 406 of the Maharashtra Municipal Corporations Act, 1949, and that the High Court exceeded the limits of judicial review by reassessing a fiscal policy decision without any finding of perversity or illegality. The High Court's judgment and review order were set aside.
Issues
- Whether a corporator could maintain a public interest litigation against the Municipal Corporation's revision of property tax when a statutory remedy existed.
- Whether the High Court, under Article 226, could examine the merits of the Corporation's decision to revise property tax rates.
- Whether the revision of property tax after a long period without revision was open to interference.
Provisions considered
- Section 406, Maharashtra Municipal Corporations Act, 1949The Act provides a statutory remedy against the Corporation's decisions. The PIL was treated as a subterfuge to avoid filing appeals against the proposed increase in property tax. (¶ 16)
- Article 226, Constitution of IndiaWrit jurisdiction in public interest cannot be used to question economic or fiscal policy unless the policy is shown to be illegal, unconstitutional, perverse or in clear breach of statute. The High Court exceeded these limits by substituting its view for the Corporation's on tax revision. (¶¶ 12, 19, 20, 21, 22, 23, 24, 26)
Held
- Municipal bodies need adequate and independent sources of revenue to perform functions vital to public health and dignified living; financial autonomy accompanies administrative autonomy, and periodic revision of taxes to meet rising costs is unexceptionable. Failure to revise the tax structure or verify properties for many years showed gross laxity by the authorities. (¶¶ 5, 6, 7, 8, 9)
- The writ petitioner, himself a corporator, did not claim to represent the citizens of Akola. He was pursuing an individual grievance in the garb of a PIL, as a subterfuge to avoid the statutory remedy under Section 406 of the Maharashtra Municipal Corporations Act, 1949. Because he also challenged the tender for the property survey, a business conflict as the motive could not be ruled out. (¶¶ 12, 13, 14, 15, 16, 18)
- Judicial review does not extend to the merits or wisdom of economic and fiscal policy. Interference through a PIL is warranted only for a clear breach of constitutional or statutory obligations; courts cannot substitute their judgment for that of the legislature or its agents, and trivial errors in the revision process do not vitiate the whole tax revision. (¶¶ 19, 20, 21, 22, 23)
- As the petitioner admitted that the Corporation's power to revise taxes was not under challenge and only the procedure was questioned, the High Court's scrutiny was confined to statutory compliance. It could not hold a roving inquiry into the merits without showing that the procedure was ex facie arbitrary, perverse or in blatant breach of statute. No such material existed and the High Court made no finding of perversity or unconstitutionality. (¶¶ 24, 25, 26)
- Having kept property tax rates stagnant for a long period, the Corporation was justified in, and under a statutory obligation to, revise them; regular revision would have avoided the abrupt increase. (¶ 27)
Result
Appeals allowed; the High Court's judgment dated 09.10.2019 in the PIL and its review order dated 24.01.2020 set aside; no order as to costs.