Delhi High Court To Hear Plea Challenging Commercial Property Tax On Lawyers’ Offices Next Week

The Delhi High Court on Friday said it will hear on Sept. 30 a plea by lawyers association challenging charging of commercial property tax on advocates' offices by municipal corporations.

Justice Najmi Waziri said the issue raised in the petition is in the nature of Public Interest Litigation and it be listed before an appropriate bench, subject to the order of Chief Justice, next Wednesday.

The petition challenged the municipal authorities' decision to treat the use of premises by an advocate as commercial activity' and impose taxes accordingly.

The plea filed by Delhi High Court Bar Association, through President Mohit Mathur and Secretary Abhijat, challenged an assessment order passed by SDMC in November 2018 and any other notice issued thereafter by the three MCDs -- South, East and North -- for self assessment of property tax returns of lawyers offices under provisions of the Delhi Municipal Corporation Act.

It said that under the DMC Act, use factor' system was introduced in the new method of assessment of property tax and for advocates, there is no specific category but they are being charged on the basis of methods applicable on commercial properties which attract the highest tax.

All the professionals form one class but the legal profession has been treated as part of commercial activity, which is illegal, arbitrary and contrary to the law laid down by this court, the plea said, adding that the office of legal professionals should be use factor' 1 which is for residential and public purpose.

It said the Bar Council of Delhi sent a representation to the municipal corporations on July 21 for reduction of the use factor' 4 to 1 for levy of property tax in respect of offices of advocates in Delhi. Use factor' 4 is for business buildings which attracts the highest tax.

Lawyers appear before the court to represent their clients but in effect assist the court to dispense justice and this cannot be a business or any commercial activity, the plea, filed through advocate Nikhil Mehta, said.

As an interim relief, the plea sought to stay the operation of november 2018 notice issued by the authorities for self assessment property tax return of the lawyers office.

The plea has arrayed the three municipal corporations as parties.