Published on: 27 November 2022 at 16:21 IST
Court – Supreme Court of India
Citation – Municipal Corpn. of Greater Mumbai v. Property Owners’ Assn. (2022)
Hon’ble Supreme Court of India has held that Finance Commission recommendations are subject to the legislative body of the State. Hence, it is upon the wisdom of the Legislature of the State to accept the recommendations of the made by the Finance Commission.
It is held that if the legislature on Sou Moto takes an action, then it cannot then be said that the action would have emanated from the Finance Commission.
Para – 30.
It is true that certain functions are entrusted to the Finance Commission and the recommendations made by the Finance Commission must carry great weightage. However, the matter has to be seen from the perspective : whether any “measures needed to improve the financial position of the municipalities” must necessarily emanate from the recommendations of the Finance Commission.
Sub-Article (2) contemplates that the recommendations made by the Finance Commission along with the explanatory memorandum as to the action taken thereon must be laid before the Legislature of the State. Thus, it is the Legislature of the State which will ultimately take an appropriate action with respect to the recommendations made by the Finance Commission and the papers placed before it.
If the Legislature itself has taken into account certain prevailing situation, which according to the Legislature is causing some prejudice to the financial health and condition of the municipalities.
Therefore, the method of imposition of property tax ought to be changed, it cannot then be said that the matter must necessarily and ought to have emanated from the Finance Commission or that in the absence of such recommendations by the Finance Commission, no steps could have been taken by the Legislature.
Drafted By Abhijit Mishra
Key Words – Finance Commissioner, Property Tax, Legislative Body.