Delhi HC rejects plea seeking uniform method for property tax in NDMC area

New DelhiThe Delhi High Court on Friday rejected a petition seeking directions to the New Delhi Municipal Council (NDMC) to adopt a uniform method to assess property tax in areas under its jurisdiction, with a bench of justices Anil Kshetarpal and Shail Jain observing that the court could not dictate how a statutory authority should formulate and administer the methodology for determining the rateable value of properties

New Delhi

The court delivered the verdict in a petition filed by the Khan Market Welfare Association. (Representative photo)

The Delhi High Court on Friday rejected a petition seeking directions to the New Delhi Municipal Council (NDMC) to adopt a uniform method to assess property tax in areas under its jurisdiction, with a bench of justices Anil Kshetarpal and Shail Jain observing that the court could not dictate how a statutory authority should formulate and administer the methodology for determining the rateable value of properties.

To be sure, rateable value is the annual value that a municipal authority assigns to a property for the purpose of calculating property tax. The NDMC’s jurisdiction extends to the core areas of Lutyens’ Delhi, including Connaught Place, Khan Market, Golf Links, and Pandara Road, among others.

“The determination of the methodology to be adopted for assessment of rateable values, so long as the authority acts within the statutory framework, involves the exercise of statutory and administrative functions entrusted to the authority by the legislature. The court cannot, under the guise of issuing a mandamus, substitute its own formulation for that of the competent statutory authority,” the court said.

The court delivered the verdict in a petition filed by the Khan Market Welfare Association, comprising shopkeepers and property owners at Khan Market. It contended that the existing methodology resulted in arbitrariness, discrimination and hardship, citing different methods adopted by the NDMC for similarly situated properties that resulted in widespread disparities in rateable values and consequent property tax liability.

In its petition, the association had also sought the constitution of an expert committee to inquire into the alleged frauds, irregularities and discrepancies in the fixation of rateable values through the NDMC’s jurisdiction. The court, however, rejected the same, saying that the association had failed to demonstrate a “legal right” for claiming such a relief.

“The prayer does not identify any specific statutory duty requiring the constitution of such a committee, nor does it identify any particular statutory power which the respondents have failed to exercise. A direction of this nature would require the court to create an administrative mechanism, prescribe its composition and remit, and entrust it with functions which have not been shown to have been statutorily vested in such a body. The jurisdiction under Article 226 cannot ordinarily be invoked for creation of such an institutional mechanism merely because the petitioner alleges irregularities in the functioning of a statutory authority,” the court said.