The Calcutta High Court struck down parts of the Kolkata Municipal Corporation Amendment Act, 2022, invalidating retrospective property tax provisions. Justice Gaurang Kanth held such validation clauses unlawful, protecting petitioners from revived liabilities of Rs 11.24 crore demands.
KOLKATA: The Calcutta High Court has partially struck down provisions of the Kolkata Municipal Corporation (Amendment) Act, 2022 that sought to revive retrospective property tax assessments. In WPO 1220 of 2024 (Sahujain Charitable Society and Anr. v. Kolkata Municipal Corporation and Ors.), Justice Gaurang Kanth invalidated the Act’s non-obstante clause and a validating sub-clause that attempted to retrospectively validate extensive tax revisions. The decision came in the context of an Rs 11.24 crore demand, protecting the petitioners from liabilities that earlier courts had treated as final.
The matter traces back to Sahujain Charitable Society, registered in 1981, which owned parts of a high-rise on Camac Street. From 1984, property taxes were paid on an annual valuation of Rs 4.74 lakh. In 1999, KMC issued notices proposing substantial upward revisions dating back 15 years to 1985.
Subsequent bills sought an additional Rs 1.93 crore, triggering appeals, disconnections of water supply, coerced payments, and multiple writ petitions. A 2018 Division Bench ruling (Sahujain Charitable Society v. KMC, 2018 SCC OnLine Cal 4793) “read down” Section 179(2)(d) of the 1980 KMC Act, restricting the Municipal Commissioner’s unlimited revision power to a three-year limit to avoid arbitrariness under Article 14.
Special Leave Petitions to the Supreme Court were dismissed (2019, 2024), making that outcome final. After the 2022 amendment, however, KMC issued a July 23, 2024 letter relying on the new law to demand Rs 11.24 crore (plus penalty), asserting six-year revision power and validating earlier assessments directly affecting the society’s floors.
Senior Advocate Abhratosh Majumdar, representing the petitioners, argued the amendment was a transparent legislative attempt to circumvent the 2018 judgment. Counsel said the law did not fix the underlying defect unguided retrospective power but only declared past invalid hikes valid through a non-obstante override, contravening Articles 14, 19 and 300A.
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Relying on precedents such as Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality (1969) and Jayam & Co. v. Asst. Commissioner (2016), they contended a legislature cannot revive invalid levies without remedying legal defects, calling the enactment a breach of separation of powers (citing Madras Bar Association v. UOI, 2025). They highlighted practical hardships, including difficulties tracing past tenants.
KMC’s Senior Advocate Jaydip Kar and West Bengal’s Advocate General Kishore Dutta defended the amendment as a curative fiscal measure within the municipal government’s authority (Entry 5, List II). They argued it was not a prohibited retrospective levy but a clarification of the revision window (citing D.G. Gose & Co. v. State of Kerala, 1980), specifying a six-year limit and validating pre-UAA regime assessments (pre-2017), excluding taxes barred by Section 573’s three-year recovery limit. They maintained that hardship does not invalidate tax laws and relied on decisions allowing retrospective fiscal measures (Vatika Township Pvt. Ltd., 2015).
Justice Kanth compared the unamended and amended versions of Section 179(2)(d). The court noted that the 2018 ruling had already curtailed “at any time” powers to a three-year window for Article 14 compliance. The 2022 amendment introduced a non-obstante clause, a six-year cap (sub-clause i), and a blanket validation (sub-clause ii). Drawing on Municipal Corpn. of Ahmedabad v. New Shrock Spinning (1970), the court observed that while legislatures may cure statutory defects, they cannot nullify binding judicial decisions without providing remedies.
The non-obstante clause and validating sub-clause (ii) were found to unsettle finality and revive barred claims, infringing equality, property rights and judicial independence. By contrast, sub-clause (i)’s finite six-year limit was permissible prospectively. The court severed the unconstitutional parts while preserving the remainder of the amendment; for the petitioners, the earlier three-year limitation remains applicable.
The order shows,
“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))
The writ petition succeeded in part: the offending portions of the amendment were struck down, and KMC’s demand of Rs 11.24 crore (with interest of Rs 8.22 crore and penalty of Rs 39 lakh) was quashed. KMC must recompute tax liabilities within the limits established by the 2018 decision and refund any excess collected.
Prospectively, the six-year revision window may apply from 2023 onward, but finalized matters cannot be disturbed. The ruling reinforces the finality of judicial pronouncements in fiscal disputes, limits legislative attempts to resurrect concluded liabilities, and nonetheless leaves room for legitimate legislative reform of municipal tax regimes.
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