VALIDITY OF N.A TAX FOR URBAN & SUB-URBAN REGIONS OF MAHARASHTRA CHALLENGED IN BOMBAY HIGH COURT.

Since around past two years, several thousands of land holders including Housing Societies and residential complexes in entire Maharashtra are receiving demand notices from the local Talathi office for collection of N.A Tax (Non-Agricultural Tax). The amounts in several cases are absurdly high and have led to utter shock and desperation for thousands of land holders.
For almost past one decade the State Government was quiet on the subject and suddenly N.A Tax demand notices are issued with huge amounts which also include arrears for past several years. The method of calculation of these tax amounts is also under question.
A few years ago, when the subject had come up, several political leaders and state ministers had promised to look in the matter and amend the Maharashtra Land Revenue Code, but nothing has been done till date.

PROVISIONS OF MAHARASHTRA LAND REVENUE CODE 1966
The N. A Tax has a history since British Era when the irrigation and cultivation activity was taxed. Historically there was also a need to contain the conversion of land from Agricultural use to Non-Agricultural use as India faced scarcity of food grains during those days. This is no longer the scenario.
The Maharashtra Land Revenue Code 1966 (MLRC) regulates the provisions related with N.A Tax. According to the provisions of MLRC the residential sites which were originally the Villages or ' Gaothans' are exempt from levy & collection of N.A tax as they were considered as predominantly residential sites, and no agricultural activity was ever carried on such lands.
Ironically, such ' Gaothans' for example Shivajinagar in Pune, South Mumbai District in Mumbai and many such locations in the heart of urban and sub-urban cities continue to be exempted from levy & collection of N.A Tax even today.
But the lands of residential sites surrounding such ' Gaothans' are charged the N.A Tax. Historically these surrounding lands were cultivated. With the growth of population and increasing need for land for residential purposes such lands were converted to Non-Agricultural use or more specifically for residential use. One-time Non-Agricultural use
conversion tax, and premium ' Nazrana' was paid by the land holders to the State Government at the time of conversion of the use of their land. There is no possibility of agricultural activity now or in future on these residential sites in urban & sub-urban regions in the entire state of Maharashtra. Then why such landholders be charged the N.A Tax again and again?

N.A TAX FOR URBAN & SUB-URBAN REGIONS OF MAHARASHTRA IS UNJUSTIFIED.
Mr. Suhas Patwardhan, Chairman of the Pune District Co-operative Housing Societies and Apartments Federation said: " The levy of N.A Tax on residential lands situated in urban & sub-urban regions of Maharashtra is completely unjustified. Several landholders including housing societies and apartment complexes are surprised to receive such high and absurd demand of N.A Tax. Most of them don' t know what this tax is about. When contacted, the local talathi offices are not able to give policy or any other information. Therefore, we decided to move the Hon' ble Bombay High Court to seek scrapping of the N.A Tax for residential sites within the urban & sub-urban regions of Maharashtra"

PROVISIONS OF MLRC ARE OUTDATED. DISCRIMINATION CAN NOT BE ALLOWED:
On behalf of Petitioner, Adv. Satya Muley said: " Such residential lands fall within the jurisdiction of Municipal Corporations and Municipal councils and are already being levied with several other taxes such as property tax, water cess etc. The provisions of the MLRC are also resulting in mechanical classification/discrimination for the purpose of levying and collecting N.A Tax between lands of residential sites situated in proximity of each other or within same village, town, or a city. Such discrimination is affecting the fundamental right of equality guaranteed under the Constitution of India. The N.A Tax is originating from British era and has no relevance in current time for the urban and sub-urban areas within the State of Maharashtra and must be scrapped for such urban and sub-urban areas, as these lands are permanently converted to residential use.
The outdated provisions of the MLRC require an urgent review and the provisions resulting in injustice must be struck off, or the urban & sub-urban residential lands be exempted from the N.A tax. As the State Government has not responded to representations made several affected landholders, the Petitioner has rightly decided to move the Bombay High court'

Satya Muley
Satya is a leading Civil & Criminal Law lawyer from Western India.
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