Cracking the whip against property tax defaulters, the cash-strapped Chandigarh municipal corporation (MC) has issued attachment notices to several autonomous institutions in the city, including Panjab University (PU), Postgraduate Institute of Medical Education and Research (PGIMER) and Punjab Engineering College (PEC).
The MC has also directed these institutions to declare their movable and immovable assets so that legal action, including sealing of properties, can be initiated.
The civic body had earlier put these institutions on notice till December 31 but neither did these institutions clear their dues nor did they opt for reconciliation (review) of the amount.
“The MC Act gives powers to the municipal commissioners to attach immovable properties of defaulters to recover the pending tax dues. As part of the legal action, notices have been sent to several autonomous buildings. After they declare their assets, we will assess properties that can be sold or sealed till the dues are cleared,” said an MC official.
As per Section 138 of the Punjab Municipal Corporation Act (Extension to Chandigarh) Act, 1994, any sum due on account of tax payable under this Act may be recovered, together with costs of recovery, by the manner prescribed including seizure and sale of the defaulter’s movable property, attachment and sale of immovable property, seizure and sale of goods and vehicles in the case of octori and toll, attachment of lands and buildings, and by suit.
Whopping ₹250 crore pending
The civic body had started levying property tax annually on government and commercial buildings from November 22, 2004. There are around 30,000 commercial units (non-residential properties) in Chandigarh, including government buildings, falling within MC limits. A total of 1,08,372 residential properties in the city are charged property tax at a fixed rate.
Commercial and government buildings alone owe the corporation a whopping ₹250 crore in property tax/ service tax, which is a major source of its annual revenue. Out of this amount, ₹187 crore remains under litigation or is disputed. The list of defaulters runs long, with around 650 buildings of the Punjab, Haryana, Himachal Pradesh and central governments in Chandigarh. Even the UT administration is yet to clear their tax dues. Other major defaulters include autonomous institutes such as Panjab University, Post Graduate Institute of Medical Education and Research, and Punjab Engineering College (see box).
Why recovery remains a challenge
As per MC officials, property tax recovery always remains a challenge as the civic body has only two remedies under tax bylaws – it can either issue notice to defaulters or seal the property if the dues remain unpaid, a provision hard to implement on ground as properties of PU, PGI or PEC would be difficult to be seal.
The MC has been working on enforcing stricter property tax bylaws for over a year but the draft is yet to be framed and approved by the House.
As per MC officials, notices were also sent to other commercial buildings but the MC could recover only ₹2 crore in around two months.
Notably, the MC has been grappling with a severe financial crunch, forcing it to halt all development works since May and even putting long-pending road carpeting projects on hold. Such is the crisis that the corporation may not be able to even pay out staff salaries in the coming months.
