Legislature's Bold Override Meets Judicial Check: Calcutta HC Trims KMC's Tax Revival Powers

In a nuanced ruling that balances legislative ambition with constitutional safeguards, the High Court at Calcutta has partially dismantled key provisions of the Kolkata Municipal Corporation (Amendment) Act, 2022. Justice Gaurang Kanth, in WPO 1220 of 2024 ( Sahujain Charitable Society and Anr. v. Kolkata Municipal Corporation and Ors. ), quashed the amendment's non-obstante clause and a validating subclause that sought to retrospectively legitimize expansive property tax revisions. This came amid a heated ₹11.24 crore demand battle, shielding the petitioners from revived liabilities deemed final by prior courts.

From 1999 Notices to 2024 Demands: A 25-Year Tax Odyssey

The saga began in 1984 when Sahujain Charitable Society, a registered entity since 1981, owned portions of a Camac Street high-rise in Kolkata. Routine property tax payments at an annual valuation of ₹4.74 lakh flowed smoothly until 1999, when the Kolkata Municipal Corporation (KMC) issued notices proposing steep upward revisions dating back 15 years—to 1985. Bills followed in 1999 demanding ₹1.93 crore extra, sparking appeals, water disconnections, coerced payments, and a cascade of writs.

A pivotal 2018 Division Bench decision ( Sahujain Charitable Society v. KMC , 2018 SCC OnLine Cal 4793) "read down" Section 179(2)(d) of the 1980 KMC Act, curbing the Municipal Commissioner's "at any time" revision power to a constitutional three-year limit to avoid Article 14 arbitrariness. Supreme Court SLPs were dismissed (2019, 2024), cementing finality. Yet, post-2022 amendment, KMC's July 23, 2024 letter invoked the new law to demand ₹11.24 crore (plus penalty), claiming six-year revisions and validating all prior ones—directly targeting the society's floors.

Petitioners Cry Foul: 'Colorable Legislation to Dodge Judgment'

Sahujain's counsel, led by Sr. Adv. Abhratosh Majumdar, lambasted the amendment as a blatant legislative end-run around the 2018 ruling. They argued it failed to cure the core defect—unguided retrospective power—merely declaring past illegal hikes valid via a non-obstante override, violating Articles 14, 19, and 300A. Citing Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality (1969) 2 SCC 283 and Jayam & Co. v. Asst. Commissioner (2016) 15 SCC 125, they stressed legislatures can't revive invalid levies without fixing flaws, calling it a separation-of-powers assault per Madras Bar Association v. UOI (2025 SCC OnLine SC 2498). Hardships like untraceable tenants underscored unreasonableness.

KMC and State Push Back: 'Sovereign Tax Power, No New Levy'

KMC's Sr. Adv. Jaydip Kar and West Bengal's Advocate General Kishore Dutta defended vigorously. Rooted in Entry 5, List II, the amendment was a curative fiscal tool for ongoing property charges, not retrospective in the forbidden sense ( D.G. Gose & Co. v. State of Kerala , 1980 2 SCC 410). It clarified six-year limits and validated pre-UAA regime assessments (pre-2017), excluding taxes from Section 573's three-year recovery bar. Hardship doesn't invalidate fiscal laws, they insisted, dismissing judicial legislation claims and upholding wide retrospective latitude ( Vatika Township Pvt. Ltd. , 2015 1 SCC 1).

Parsing Provisions, Precedents, and Power Plays

Justice Kanth dissected the unamended vs. amended Section 179(2)(d): the original's "at any time" was read down to three years for Article 14 compliance; the 2022 substitute added a non-obstante override, six-year cap (subcl i), and blanket validation of excess revisions (subcl ii). Echoing Municipal Corpn. of Ahmedabad v. New Shrock Spinning (1970) 2 SCC 280, the court held legislatures can cure defects but not nullify final judgments sans remedy.

The non-obstante clause and subclause (ii) crossed lines by unsettling finality and resurrecting barred claims, offending equality, property rights, and judicial independence. Subclause (i)'s six-year window survived prospectively, as finite limits are competent. Severability preserved the scheme, with prior three-year bindings intact for this petitioner.

Media reports initially hailed full upholding (as in some summaries), but the judgment's scalpel-like precision clarified: no blanket revival.

Key Observations

"The opening non-obstante clause... insofar as it purports to override or nullify binding judicial pronouncements, is unconstitutional, void, and is accordingly quashed." (Para 77)

"Sub-clause (ii)... is unconstitutional and inoperative, being violative of Articles 14 and 300A of the Constitution and the doctrine of separation of powers." (Para 79)

"In consequence, the letter dated 23.07.2024... is quashed and set aside." (Para 90(ii))

Relief Granted: Demands Dead, Refunds Due, Future Revisions Ringfenced

The writ succeeded partly: amendment operates sans offending parts; KMC's ₹11.24 crore demand (interest ₹8.22 crore, penalty ₹39 lakh) quashed. KMC must recompute per 2018 limits, refund excesses. Prospectively, six-year revisions apply post-2023, but not to finalized matters. This fortifies judicial finality in fiscal disputes, curbing opportunistic overrides while affirming legislative reform space— a blueprint for municipal tax battles ahead.