{"id":208621,"date":"2019-01-23T00:57:25","date_gmt":"2019-01-22T19:27:25","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=208621"},"modified":"2019-02-04T18:11:52","modified_gmt":"2019-02-04T12:41:52","slug":"sc-ndmc-bye-laws-introducing-unit-area-method-for-determining-rateable-value-violative-of-the-ndmc-act","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2019\/01\/23\/sc-ndmc-bye-laws-introducing-unit-area-method-for-determining-rateable-value-violative-of-the-ndmc-act\/","title":{"rendered":"SC| NDMC Bye-laws introducing \u2018Unit Area Method\u2019 for determining \u2018rateable value\u2019, violative of the NDMC Act"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Supreme Court<\/strong>: The Bench of Dr. AK Sikri and Ashok Bhushan, JJ has declared the New Delhi Municipal Council (Determination of Annual Rent) Bye-laws, 2009 (NDMC Bye-Laws) violative of the New Delhi Municipal Act, 1944 (NDMC Act). The NDMC Bye-Laws were challenged on the ground that by introducing the Unit Area Method (UAM), these Bye-laws sought to alter the earlier system of determining the rateable value on the basis of the annual rent at which the land or buildings may reasonably be expected to be let from year to year.<\/p>\n<h5 style=\"text-align: justify;\"><strong>Unit Area Method:<\/strong><\/h5>\n<p style=\"text-align: justify;\">As per this method Unique Area Value (UAV) per sq. ft\/meter of a property is fixed with reference to the characteristics of the property such as location, occupancy, age, structure of the said property. This UAV is then multiplied by the area of the vacant land or covered space to arrive at its annual value. <em>When the annual value is determined on the basis of such a formula, property tax thereupon is to be paid by the assessees.<\/em><\/p>\n<h5 style=\"text-align: justify;\"><strong>Determination of \u2018Rateable value\u2019 as per NDMC Act:<\/strong><\/h5>\n<p style=\"text-align: justify;\">The \u2018rateable value\u2019, as per Section 2(42) of the NDMC Act is to be fixed in accordance with the provisions of the Act <strong>and<\/strong> the Bye-laws made thereunder. Section 63(1) deals with determination of annual rent of a property. <em>This annual rent has to be the one which the land or the property \u2018might reasonably be expected to let from year to year\u2019. It is, thus, based on the letting yearly value of the property.<\/em> Based on various judgments of this Court, it was noticed that the only basis for fixation of rateable value is the annual rent at which the land or building might reasonably be expected to let from year to year, subject to the deductions provided under the NDMC Act.<\/p>\n<h5 style=\"text-align: justify;\"><strong>Annual rent vis-\u00e0-vis annual value of the property:<\/strong><\/h5>\n<p style=\"text-align: justify;\">Only the annual letting value fixed in the aforesaid manner can be the annual rent and not the value of the property in question. <em>The expression \u2018annual rent\u2019 is to be read in contradistinction to \u2018annual value\u2019.<\/em> Two concepts are altogether different. Inasmuch as the latter expression relates to annual value of the property which may be based on parameters different from fixing the annual rent of the property.<\/p>\n<h5 style=\"text-align: justify;\"><strong>Ruling:<\/strong><\/h5>\n<p style=\"text-align: justify;\"><em>The Impugned Bye-laws that provide UAM, which is based on the annual value of the property, are foreign to the methodology provided in Section 63 of the NDMC Act. Such Bye-laws are, thus, ultra vires the provisions of NDMC Act.<\/em><\/p>\n<h5 style=\"text-align: justify;\"><strong>Effect on assessees that have already paid tax under the bye-laws:<\/strong><\/h5>\n<p style=\"text-align: justify;\">Taking note of the fact that the Bye-Laws were applicable from 2009 till the Delhi High Court struck them down in 2017, the Court said that <em>it would not be appropriate to upset the applecart completely<\/em> in such circumstances. Hence, it directed that those assessees who have paid the tax as per Bye-Laws, 2009, their assessments shall not be reopened.<\/p>\n<p style=\"text-align: justify;\">[New Delhi Municipal Council v. Association of Concerned Citizens of New Delhi,\u00a0<a href=\"http:\/\/scconline.com\/DocumentLink\/mu24zR7O\"><b>2019 SCC OnLine SC 60<\/b><\/a>, decided on 22.01.2019]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court: The Bench of Dr. AK Sikri and Ashok Bhushan, JJ has declared the New Delhi Municipal Council (Determination of Annual <\/p>\n","protected":false},"author":121,"featured_media":154914,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,9],"tags":[33378,33381,33380,33377,33379],"class_list":["post-208621","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-supremecourt","tag-annual-rent","tag-anuual-value","tag-bye-laws","tag-ndmc","tag-rateable-value"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - 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