In Brief
The Supreme Court upheld the Delhi High Court's judgment striking down the NDMC's (Determination of Annual Rent) Bye-laws, 2009, which introduced the Unit Area Method (UAM) for calculating property tax rateable value. The Court held that Section 63(1) of the NDMC Act mandates rateable value be determined based on annual rent the property might reasonably fetch if let out—the landlord's potential rental income. The UAM, by contrast, calculates value using property characteristics (age, location, occupancy factors), fundamentally departing from statutory methodology. The Court ruled the Bye-laws ultra vires the NDMC Act and beyond delegated rule-making power. To avoid disruption, the Court directed that the 95% of assessees who had voluntarily paid tax under the invalidated Bye-laws would not face reopened assessments, but relief would be granted to the writ petitioners who had challenged them.
The lawyer headnote and full judgment text are available to registered users.