Supreme Court Verdict: Municipal Revenue Crucial for City Welfare

The Supreme Court ruled that municipal bodies must generate revenue to fulfill their statutory duties, citing the necessity for regular property tax revisions to support urban planning, health, sanitation, and infrastructure. It overturned a lower court's decision blocking a tax increase in Nagpur, emphasizing financial autonomy for effective governance.

The Supreme Court on Monday emphasized the crucial need for municipal bodies to generate revenue to maintain their statutory duties. It highlighted that failure in these areas could lead to chaos, disease, and a diminished quality of life for citizens. The ruling follows a dispute where the Bombay High Court's Nagpur bench had invalidated a property tax hike by the Akola Municipal Corporation after 16 years.

A bench headed by Justices Vikram Nath and Sandeep Mehta overturned this lower court decision, asserting that municipal bodies need regular tax revisions to cope with rising infrastructure and human resource costs. Without such adjustments, the court warned, these bodies could become nonfunctional, compromising their essential responsibilities like urban planning, public health, sanitation, and waste management.

The court underscored that municipal bodies, as autonomous entities, must have stable financial resources. Reliance on state grants could weaken their efficiency and hamper timely service delivery. The ruling advocates for financial autonomy, allowing these bodies to revise taxes and charges as necessary to uphold their primary functions.