Non-payment of property tax a serious issue: Madras High Court directs constitution of district Taxation Committees, publication of defaulters

Expressing concern that there is large-scale non-collection of property tax across the State, the Madras High Court recently directed the constitution of District-level taxation committees, the verification of property tax assessments and the publication of defaulters who fail to pay property tax. (SSM College of Engineering v. The Government of Tamil Nadu and anr).Justice SM Subramaniam observed that the non-payment of property tax has become a serious issue, adding that the High Court is not expected to close its eyes to the same.."'Judgment in rem' is imminent in extraordinary circumstances, where it is brought to the notice of the High Court that large scale tax evasions are traced, affecting the Revenue, resulting denial of developmental activities for the citizen as enunciated under the Constitution of India. Tax and its collection are backbone of the development of our great Nation", he said..He added that there are private eductional institutions collecting exorbitant amounts in fees and making huge profits, but which are reluctant in paying property tax to village panchayats. The power of panchayats to impose taxes has been Constitutionally recognised under Article 243-H of the Indian Constitution, the Court emphasised, further noting that such tax payment is important to "improve the infrastructure and basic amenities in Village Panchayats on par with the urban areas.".While so, the Court also expressed anguish that people residing in villages do not enjoy the kind of facilities and infrastructure as is enjoyed in urban areas. ."Sadly even after a lapse of 75 years of independence of our great Nation, many Villages are lacking such basic amenities and infrastructures", the Court said..It went on to emphasise that prompt and punctual property tax collection is possible only if the administrative skill to do the same exists.."Due to large scale corrupt activities in Village Panchayats and in Revenue Department, there is a laxity in the matter of collection of property taxes. Even in assessing the property tax, there are large scale corruptions. Officials of the Revenue Department and Village Panchayats are being bribed for assessment of the property tax in a lower rate and so also, there are lapses in the matter of collection of property tax by such Bill Collectors and other employees", the Judge went on to observe..In this backdrop, he commented that stringent and drastic action is warranted and that there cannot be any leniency when it comes to tax collection. With these observations, the Court issued the following directions:.1. The Rural Development and Panchayat Raj Department, government of Tamil Nadu is directed to constitute a Taxation Committee in each District under the leadership of District Collectors.2. The District Collectors are to be instructed to review the property tax assessments already made to verify the correctness or otherwise of the assessments done by the subordinate authorities.3. The State Rural Development and Panchayat Raj Department is directed to publish the list of property tax defaulters in the Collectorate. The details of the defaulters and the amount of arrears to be collected must also be published in the official website of the Department.4. All District Collectors are to be instructed to conduct monthly review meetings. Progress in the verification of property tax assessment and its collection should also be furnished.5. All the District Collectors should be instructed to ensure that appropriate action under the Service rules and criminal law would be taken against lapses, dereliction of duty, negligence, corrupt activities etc., in assessment of property tax or its collection..The order was passed while rejecting a plea made by SSM College of Engineering against a demand for surcharge raised by the Thattankutti Village Panchayat..[Read Judgment]