Calcutta High Court Upholds KMC's Power To Revise Property Valuation For Levying Property Tax In ₹11.24 Crore Dispute

The Calcutta High Court has upheld the constitutional validity of Section 3 of the Kolkata Municipal Corporation (Amendment) Act, 2022, which expanded and retrospectively validated the Corporation's power to revise annual property valuation.

Justice Gaurang Kanth held that the amendment—introduced to cure defects noticed in earlier litigation—falls squarely within the State Legislature's competence and does not amount to an impermissible legislative override of judicial decisions.

The dispute arose after Sahujain Charitable Society received a fresh demand from KMC in July 2024 for over ₹11.24 crore, including interest and penalty, for alleged arrears relating to various floors of its Camac Street property. The Society challenged both the demand and the 2022 amendment, arguing that the law was designed solely to nullify the 2018 Division Bench ruling in Sahujain Charitable Society v. KMC, which had restricted retrospective valuation to a period of three years. The petitioner contended that the amendment was a colourable exercise, violated Articles 14 and 19, resurrected previously invalid assessments, and impermissibly overrode final judicial determinations.

The State and KMC defended the law, asserting that property tax is a continuing levy inherent in the property and that the Legislature has full power to retrospectively cure statutory gaps. They argued that the amendment clarified the permissible temporal scope of revisions, validated past assessments, and protected municipal revenue. The State further contended that hardship or administrative difficulty could not form the basis for striking down a fiscal statute.

The Court agreed with the State's position and refused to invalidate the amendment. It held that the 2022 Act did not create any new levy but merely regulated the mechanism for assessment and recovery. Justice Kanth reiterated that legislatures are constitutionally empowered to enact retrospective fiscal legislation, provided it removes the basis of earlier judicial findings. The Court concluded that the amended Section 179(2)(d) was a valid legislative response and did not breach Articles 14, 19, or 300A.

Holding that the challenge lacked substance, the Court dismissed the writ petition and upheld the KMC's authority to revise annual property valuations within the statutory framework created by the 2022 amendment. The petitioner's attempt to resist retrospective valuation on the strength of the earlier Division Bench judgment was rejected, with the Court emphasising that judicial interpretations do not bind the Legislature from amending the law itself.

Case: SAHUJAIN CHARITABLE SOCIETY AND ANR. VERSUS THE KOLKATA MUNICIPAL CORPORATION AND ORS.

Case No: WPO 1220 of 2024

Click here to read order