Non-agricultural tax on Navi Mumbai societies arbitrary, say experts

Almost the entire of Navi Mumbai is built on leasehold land, however, the NA tax bills are still issued to over 50-plus housing societies. Representation pic

How can the government levy non-agricultural (NA) tax on properties in Navi Mumbai, which have come up on leasehold land taken from CIDCO? However, the state government has issued a demand notice for NA Tax to the housing societies in Navi Mumbai, with an intimation of coercive steps in case of non-payment, violating the provisions of Maharashtra Land Revenue Code, 1966.

The Maharashtra Land Revenue Code (MLRC), 1966, clearly states that the NA tax cannot be levied on properties that are leased to 'government lessees'. While almost the entirety of Navi Mumbai is built on leasehold land, there was clearly no application of mind while issuing NA tax bills to over 50-plus housing societies, who have now approached the Navi Mumbai Cooperative Housing Federation seeking support. The federation, with no alternate or more efficacious remedy, filed public interest litigation before the Bombay High Court, which mid-day had highlighted in an article on March 24.

Panel was formed

Advocate Shreeprasad Parab, who is also the Expert Director at The Maharashtra State Cooperative Housing Federation Limited and also the lawyer representing the petitioners, who filed the PIL against levying of NA tax, said,

"The government of Maharashtra appointed a study group way back in 1958 under the chairmanship of S.G. Barve, Secretary to Government, to consider the issues with regards to congestion of traffic, deficiency of open space, playfields, shortage of housing and over-concentration of industry in the metropolitan and suburban areas of Mumbai. The government of Maharashtra had accepted the recommendation of the Barve Committee."

"Another committee under the chairmanship of Prof. D.R. Gadgil was constituted to formulate broad principles of regional planning and to make recommendations for the establishment of metropolitan authorities for preparation and execution of the plans to establish a twin city in the name of 'New Bombay'. The state government acquired land covering 86 villages and another 9 villages during 1970 and 1973 respectively. The major part of the land was marshy and consisted of saltpans. No major agricultural activities existed there," he added.

"CIDCO is the new town development authority declared for the area designated as a site for Navi Mumbai by the government of Maharashtra in the exercise of its powers under sub-section (1) and (3-A) of section 113 of the MRTP Act, 1966," explained Advocate Parab.

Lease land owned by CIDCO

B R Mhatre, General Secretary, of the Navi Mumbai Federation, said, "One of the residential societies in Navi Mumbai, who approached us had already paid their NA tax, but to their surprise, they received another revised bill a few months ago. It was almost double the previous bill. And the worst, the revised bill even stated that they (revenue department) have observed that the premises were being used for non-agriculture purposes, and therefore the NA tax. We (the federation) have objected to the very arbitrary stand of such exploitation of the common public, by levying unconstitutional and arbitrary NA tax."

Mhatre added, "Firstly, the entire Navi Mumbai, which was earlier a marshy land, was converted to non-agriculture usage by CIDCO, the government-appointed planning authority and almost every land in entire Navi Mumbai is a leasehold land, thereby making CIDCO the landowner."

Earlier judgment against CIDCO

A K Bhattacharyya, Founder Chairman of Navi Mumbai Co-operative Housing Federation Limited said, "Almost three decades ago, a similar NA tax was levied on residential/commercial societies by CIDCO and we had challenged the same before the Bombay High Court. The court observed that CIDCO does not have any authority to levy such tax and since then no NA tax was levied by CIDCO."