The Calcutta High Court has held that Section 232B of the Kolkata Municipal Corporation Act, 1980 is a transitional and enabling provision meant to preserve and complete proceedings relating to periods prior to the introduction of the Unit Area Assessment (UAA) regime; it does not revive repealed provisions as independent sources of power and does not confer unfettered or unlimited authority to reopen past assessments, and therefore does not violate Articles 14 or 300A of the Constitution.
The Court clarified that the second proviso to Section 180(2) of the KMC Act, effective from June 09, 2023, operates prospectively, prescribes a normative six-year period for revision, and validly carves out an exception in cases of non-filing of returns or suppression of material facts; it is based on rational classification, is not vague or arbitrary, and does not retrospectively impose burdens for past conduct.
Accordingly, the constitutional challenge failed, but the Court set aside the impugned memo and notices, with liberty to the respondents to initiate fresh proceedings strictly in accordance with law and subject to the interpretation and limitations affirmed in the judgment, particularly with respect to Section 179(2)(d) of the KMC Act.
A Single Judge Bench of Justice Gaurang Kanth traced the statutory history and noted that the KMC Act originally operated on the Annual Rateable Value (ARV) system, which was replaced by the UAA system through the 2006 amendment, though transitional amendments in 2008 and 2011 continued the ARV framework until publication of the UAA Scheme, which ultimately came into force on April 01, 2017. The Bench noted that Section 232B was introduced by the 2022 amendment to continue applicability of certain pre-2006 provisions for actions relating to assessment and levy of property tax for periods prior to publication or enforcement of the UAA Scheme, and that a proviso was also inserted in Section 180(2) prescribing that revision of annual valuation would ordinarily be made within six years, except where returns were not filed under Section 182 or circumstances were suppressed.
The Bench observed that the challenge was not to legislative competence, but to the constitutional validity and temporal operation of Section 232B and the proviso to Section 180(2), and reiterated that fiscal legislation carries a strong presumption of constitutionality unless it suffers from manifest arbitrariness or constitutional violation. It held that Section 232B is a transitional and saving provision intended to preserve continuity for pre-UAA assessments and does not revive repealed provisions as independent sources of power or confer indefinite authority to reopen past assessments.
The Bench also observed that the substituted Section 179(2)(d) introduced by the 2022 amendment operates prospectively from June 09, 2023, and that for the period prior thereto, revisions remained governed by the unamended Section 179(2)(d), subject to the limitation imposed in the case of Sahujain Charitable Society vs. The Kolkata Municipal Corporation [WPO No. 1220 of 2024].
As regards the proviso to Section 180(2), the Bench observed that it came into force only from June 09, 2023, and there was nothing in its language indicating retrospective operation. The use of the expression “ordinarily” was not found vague because the exception to the six-year norm was tied to objectively verifiable conditions, namely non-filing of returns or suppression of relevant events. The Bench rejected the petitioner’s argument that the proviso retrospectively converted a directory requirement into a mandatory one, holding that it does not penalise past non-filing but only regulates future exercise of the Corporation’s power of revision after its commencement.
Briefly, the petitioners had challenged the constitutional validity of Section 232B and the proviso to Section 180(2) of the Kolkata Municipal Corporation Act, 1980, and also sought quashing of the memo dated January 08, 2024 and thirteen notices dated January 04, 2024 issued for retrospective revaluation of Premises No. 25, Brabourne Road, Kolkata.
Essentially, the property belonged to petitioner no. 1, had last been assessed with effect from the fourth quarter of 2004–2005 at Rs. 47.48 lakhs, and the petitioner stated that municipal taxes had been regularly paid. On March 29, 2023, KMC sought tenant particulars and rent agreements, which were furnished by the petitioner on June 15, 2023.
Thereafter, by notice dated January 08, 2024 issued under Sections 184 and 185, KMC proposed retrospective revision of annual valuation from the first quarter of 2005–2006 to the third quarter of 2016–2017 through thirteen intermediate revaluations under Section 180(2) applying the ARV system, and also proposed eight further revaluations under the UAA scheme for the period from the first quarter of 2017–2018 to the third quarter of 2022–2023.
Appearances:
Senior Advocate Mr. Arindam Banerjee, along with Advocates Arpita Saha, Asish Kr. Mukherjee, and Saurabh Prasad, for the Petitioner
Senior Advocate Jaydip Kar, along with Advocates Piyali Sengupta and Swapan Kr. Debnath, for the Kolkata Municipal Corporation
A.G., Kishore Datta, along with Advocates Sirsanya Bandyopadhyay, Vivekananda Bose, Anjusri Mukherjee, and Susmita Biswas Chowdhury, for the State
