Appointment of agency to trace assets of property tax defaulters

by Ana Lopez

(from our representative)
MUMBAI: The Mumbai Municipal Corporation is going to take strict action against those who refuse to pay property tax, which is the main source of revenue. Even after sending notices from time to time, the property of those who do not pay property tax will now be searched and auctioned anywhere in the country. The municipality has decided to appoint an agency to trace the properties of defaulters.
The municipality has started action against property tax defaulters, under which the properties of 67 defaulters have been confiscated. A total amount of Rs 355 crore 19 lakh is yet to be collected from all these property holders including basic tax of Rs 267 crore 88 lakh and penalty of Rs 87 crore 31 lakh. Therefore, the Municipal Corporation has initiated the process of appointing a commercial agency to explore other immovable properties and investments of the 67 defaulters for recovery of this full amount.
After the cessation of zakat, property tax is the main source of municipal revenue. Property tax must be deposited with the municipality within 90 days of receipt of the property tax bill. During this time, tax defaulters are dealt with step by step by the municipality.
According to the assessment account of the municipality, 67 defaulters belonging to various categories like residential, industrial, commercial, open space have not paid the amount. In order to recover Rs 355 crore 19 lakh from all these people, the process of appointing a commercial agency has been started to trace other immovable properties and investments in the name of 67 defaulters.

This is how the procedure is done
Officials of the tax and assessment department of the municipality appeal to them to pay the tax through direct contact and communication, but still ‘demand letters’ are sent to the people who do not pay the tax. After that a 21 days final notice is sent to the property tax holders. Finally actions like disconnection of water connection of defaulters, confiscation of property, auction are done by the municipality.

Change in rule
Municipal rules have been amended, according to which land and buildings can be auctioned for recovery of tax. Pursuant to that, an independent working mechanism has been allowed for efficient execution of the public auction process.
What will the agency do?
This agency has to do the work of finding the immovable property registered in the name of the defaulters, collecting proof of ownership documents of the registered property, finding the commercial organization in which the defaulters are the management, the investment of the defaulters in that organization and their financial interests etc.

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