Mumbai:The Bombay High Court yesterday restrained Brihanmumbai Municipal Corporation from taking any coercive action against Bombay Hospital Trust, which runs the Bombay Hospital, over Rs 1.95 crore property tax bills.
A division bench of Chief Justice Mohit Shah and Justice M S Sanklecha, however, directed the Trust to pay 25 per cent of the property tax demand by September 30.
The court was hearing a petition filed by the hospital challenging property tax bills issued to it by the BMC levying Rs 1.95 crore from April 2010.
According to the Trust, the demand notice with retrospective effect was unconstitutional and ultra vires to the Bombay Municipal Corporation Act.
Additional Government Pleader Sharmila Modale, appearing for BMC, sought time to file affidavit and assured the court that if the Trust deposits some amount pending hearing of the petition, the corporation will not take any action.
According to the petition filed by the Trust, which was registered in June 1953, it was exempted from paying property tax as its premises were being exclusively used for charitable and philanthropic activities.
However, in 1995, the corporation unilaterall withdrew the exemption without any lawful cause. Based on rateable value method of computation, the BMC demanded property tax, states the petition.
The HC in 2002 had stayed the property tax subject on the Trust's plea subject to the Trust paying 50 per cent of demand then. The BMC has not challenged that order.
In 2010, the state legislature amended the Brihanmumbai Municipal Corporation Act, 1888, by an ordinance.
"BMC, under the guise of rationalising property tax structure prevalent in Mumbai, totally abused the scheme to frame the Factors and Categorises of Users of Buildings or Lands (Assignment of Weightages by multiplication) Fixation of Capital Values Rules, 2010," the petition said.
After receiving bills in December last year, which would have an retrospective effect from April 2010, the hospital approached the high court seeking to quash it.
The matter will be heard on October 23.
