PIL Cannot Be a Tool for Personal Grievances: Supreme Court Upholds Municipal Body’s Power to Revise Property Tax After 16 Years

“Courts Cannot Sit in Appeal Over Economic Policy Decisions of Local Bodies Unless Perverse or Unconstitutional”, Supreme Court of India delivered a strong-worded judgment upholding the financial autonomy of municipal bodies and setting aside the Bombay High Court's order that had quashed Akola Municipal Corporation’s decision to revise property tax rates after 16 years. The Court held that the High Court had exceeded the scope of judicial review under Article 226 by interfering in a purely economic policy matter, without any demonstration of arbitrariness, perversity, or constitutional breach.

"Judicial Review Cannot Be Used to Substitute Economic Wisdom of Elected Bodies": SC Reiterates Limited Scope of Article 226 in Policy Matters

A Bench comprising Justices Vikram Nath and Sandeep Mehta observed:
“The High Court exceeded the well-settled tenets of judicial review by substituting its own opinion for that of the appellant-Corporation. Matters of tax revision fell squarely within the domain of the Corporation… Trivial errors in the process of revision would not vitiate the entire regime of tax revision and collection.” [Para 19]

In strong terms, the Court emphasized that the revision of property tax was not only justified but necessary, given that it had not been done since 2001. It also questioned the maintainability of the PIL filed by a sitting corporator who did not demonstrate any public mandate but appeared to pursue private and possibly business interests.

Corporation’s Attempt to Revive Revenue Halted by High Court

The case arose out of a public interest litigation (PIL No. 42 of 2018) filed before the Nagpur Bench of the Bombay High Court by Dr. Zishan Hussain, a corporator of the Akola Municipal Corporation. He challenged the Corporation’s resolution dated April 3, 2017 (modified on August 19, 2017), which sought to revise property tax rates for the years 2017–2022 — a step taken after a 16-year gap.

The High Court, by its order dated October 9, 2019, quashed the tax revision primarily on the grounds of procedural lapses, including the process of engaging a private contractor for surveying properties. A review petition was also dismissed in January 2020. Aggrieved, the Corporation approached the Supreme Court.

SC Reprimands High Court: “Courts Are Not Chartered Accountants or Policy Advisors”

Referring to its Constitution Bench ruling in Shri Sitaram Sugar Co. Ltd. v. Union of India, the Supreme Court reminded that:

“Judicial review is not concerned with matters of economic policy. The court does not substitute its judgment for that of the legislature or its agents… The court does not act like a chartered accountant nor acts like an income tax officer.” [Para 20]

It held that the High Court had improperly evaluated the procedural aspects of the tax revision exercise, ignoring that even if some technical lapses occurred, they did not render the decision void unless the entire process was perverse or arbitrary — which was not demonstrated.

PIL Filed by Sitting Corporator Was Misuse of Forum: “Disguised Private Interest”

The Court strongly questioned the locus standi of the petitioner, noting:

“The PIL was in fact, nothing but an action taken as a subterfuge to avoid filing of appeals against the proposal to increase the property tax.” [Para 16]

Noting that the respondent-writ petitioner was himself a corporator and failed to disclose that he was acting on behalf of the larger public, the Court suspected the PIL to be a proxy for personal or business conflict:

“Possibility of the writ petition having been filed to agitate a conflict of business interest cannot be ruled out.” [Para 18]

The Court held that PILs should not be entertained when statutory remedies exist — here, under Section 406 of the Maharashtra Municipal Corporations Act, 1949.

Tax Revision is a Statutory Obligation, Not an Option

The Court acknowledged that the Corporation had not revised property tax since 2001 and took note of its submissions regarding the increasing demand for funds to meet urban infrastructure and sanitation needs:

“Without the generation of revenue, the municipal bodies cannot be expected to sustain all these functions… the fact that the tax structure had not been revised since 2001 by itself depicts gross laxity.” [Paras 7–9]

It affirmed that municipal bodies possess both administrative and financial autonomy, and such independence is vital for efficient local governance:

“A municipal administration compelled to depend upon State grants would be structurally weakened and rendered incapable of performing its duties.” [Para 8]

No Challenge to Corporation’s Power—Only to Procedure

Interestingly, even the respondent-writ petitioner, in his counter-affidavit before the Supreme Court, conceded that he was not challenging the Corporation’s power to revise taxes, but only its manner and procedure:

“The Public Interest Litigation did not pertain to the power or the decision of the Corporation to revise the rate of Municipal Taxes, but to the mode and manner of revision.” [Para 25]

The Supreme Court emphasized that in the absence of any claim of perversion or unconstitutionality in the decision itself, the High Court had no jurisdiction to interfere.

Judicial Review and Economic Policy: Role of Courts is Not to Govern

The judgment draws strength from previous rulings like BALCO Employees’ Union v. Union of India and Kirloskar Ferrous Industries Ltd. v. Union of India, reinforcing that courts must show judicial restraint in matters involving economic and fiscal policy:

“Policy decisions often require the expertise of professionals… Courts, lacking economic expertise, should not second-guess these kinds of decisions.” [Kirloskar Ferrous Industries, Para 55]

The Supreme Court concluded that the decision to revise property tax was not only within the authority of the Corporation but also a necessity delayed for too long:

“Had the exercise been taken on regular basis, perhaps the cumulative increase of tax rates in the year 2017 would have been much higher… the abrupt shock could have been avoided.” [Para 27]

SC Affirms Autonomy of Local Bodies, Restricts PIL Misuse

Allowing the appeals, the Supreme Court set aside the High Court’s order and reinstated the Akola Municipal Corporation’s resolution revising property taxes. The Court has once again affirmed that economic decisions, unless shown to be patently illegal, are best left to elected bodies and experts, and courts should not overstep their constitutional boundaries.

“The impugned judgment dated 9th October, 2019 and order dated 24th January, 2020… are unsustainable in the eyes of law. Hence, the same are hereby set aside.” [Para 28]

Date of Decision: December 8, 2025