Prospective six-year limitation for property tax revisions under KMC Act is constitutionally valid.

The Petitioners, owners of a commercial building at 25, Brabourne Road, Kolkata, challenged the constitutional validity of Section 232B and the second proviso to Section 180(2) of the Kolkata Municipal Corporation (KMC) Act, 1980

Historically, Kolkata followed the Annual Rateable Value (ARV) system for tax assessment, which was replaced by the Unit Area Assessment (UAA) system via a 2006 amendment, effective from 01.04.2017

A 2022 amendment introduced Section 232B to preserve ARV provisions for periods prior to the UAA scheme and added a proviso to Section 180(2) allowing revisions within six years, or indefinitely in cases of suppression or non-filing of returns

In January 2024, the KMC issued notices seeking retrospective revaluation of the Petitioner’s premises dating back to 2005-2006

The Petitioners argued these provisions conferred unfettered retrospective power, violating Articles 14 and 300A

1. Whether Section 232B of the KMC Act, 1980 is unconstitutional for reviving repealed provisions and conferring unbounded retrospective powers

2. Whether the second proviso to Section 180(2) of the KMC Act, 1980 is unconstitutional due to vagueness and retrospective imposition of liabilities

3. Whether the impugned notices for retrospective revaluation from 2005-2006 are legally sustainable

The Court relied on Entry 5, List II of the Seventh Schedule and Part IX-A of the Constitution regarding municipal legislative competence

It applied the principle from Commissioner of Income Tax v. Vatika Township Pvt. Ltd. that fiscal statutes are presumed to be prospective unless the legislature provides otherwise

The "manifest arbitrariness" test under Article 14 was considered alongside State of Rajasthan v. Ashok Khetoliya

It further integrated the judicial limitation established in Sahujain Charitable Society & Anr. v. KMC, which restricted retrospective revisions under the ARV system to three years

Finally, it upheld the legislature's power to enact curative or validating laws to remove the basis of judicial invalidity as per Amarendra Kumar Mohapatra v. State of Orissa

Regarding Section 232B, the Court determined it is a transitional saving provision intended to bridge the gap between the ARV and UAA regimes, rather than a source of "unfettered" new power

It held that 232B does not override the Sahujain precedent; rather, revisions for the interregnum period remain subject to the three-year limit previously read into the Act

Regarding the proviso to Section 180(2), the Court held it operates prospectively from 09.06.2023

It rejected the "vagueness" argument, noting that the exception to the six-year limitation is anchored in objective criteria: non-filing of returns or suppression

The Court reasoned that linking limitation benefits to statutory compliance (filing returns under Section 182) is a rational classification and not a retrospective penalty for past conduct

Thus, the provisions were found to be within legislative competence and not "manifestly arbitrary"

It held that Section 232B is a valid transitional provision and the proviso to Section 180(2) is prospective, effective from 09.06.2023

However, the Court quashed the specific memo dated 08.01.2024 and the thirteen notices dated 04.01.2024, as they sought retrospective revaluation exceeding the permissible legal limits

The Respondents were granted liberty to initiate fresh proceedings strictly in accordance with the law and the time limitations clarified in the judgment

The writ petition was disposed of accordingly