New Delhi, Dec 8 (PTI) The Supreme Court on Monday said the writ jurisdiction of high courts cannot be exercised in public interest for questioning the economic policy or reforms sought to be undertaken by the government or its functionaries.

A bench of Justices Vikram Nath and Sandeep Mehta said judicial interference by way of public interest litigation is available only if there is injury to the public because of the dereliction of constitutional obligations on the part of the government.

It set aside orders of the Nagpur bench of the Bombay High Court setting aside an order of the Akola Municipal Corporation raising the property tax in its jurisdiction after 16 years.

"This court has also held that judicial interference by way of public interest litigation is available only if there is injury to the public because of dereliction of constitutional obligations on the part of the government. The writ jurisdiction of the high court cannot be exercised in public interest for questioning the economic/fiscal policy or reforms sought to be undertaken by the government or its functionaries," it said.

Finding fault with the October 9, 2019 and January 24, 2020 orders of the high court, the bench said the high court was not justified in invoking powers of judicial review in a public interest litigation so as to interfere in the economic policy decision taken by the corporation to increase the rates of the property taxes and particularly when such revision was made after a considerable gap of about 16 years.

It said that the court has gone through the reasoning assigned by the high court for quashing and setting aside the resolution dated April 3, 2017 as modified by the subsequent resolution dated August 19, 2017 passed by the Corporation determining the mode and manner in which the property taxes are to be imposed for a period of five years from 2017-18 to 2021-22, thereby increasing the tax rates in respect of properties situated within the jurisdictional limits of Corporation.

"Ex facie, we are of the opinion that the aforesaid exercise was not permissible to be undertaken in the extraordinary writ jurisdiction of the court and the decision of the appellant-Corporation regarding economic policies was beyond the scope of power of judicial review. There is no finding by the high court that the decision to increase the tax rates was perverse or unconstitutional," it said.

The top court said the public interest litigation before the high court did not call into question the authority or competence of the corporation to revise municipal taxes, and that the grievance was confined exclusively to the procedure and manner adopted in effectuating such revision.

"...We are of the considered view that the high court ought not to have embarked upon a roving inquiry into the merits or wisdom of the decision to revise the tax rates unless it was demonstrated that the procedure adopted by the appellant-Corporation was ex-facie arbitrary, perverse, unreasonable or in blatant derogation of the governing statutory provisions," it said, while pointing out that no such material was placed before the court, nor does the record disclose any such infirmity.

It said the high court transgressed the permissible limits of judicial review in interfering with the decision of the appellant-Corporation to revise the rate of property taxes.

"We are of the firm view that the appellant-Corporation having kept the taxes at a stagnant rate for almost 16 years was indeed justified and rather under a statutory obligation to revise the tax rates. Had the exercise been taken on a regular basis, perhaps the cumulative increase of tax rates by the appellant-Corporation in the year 2017 would have been much higher than 40 per cent done under the subject exercise and the abrupt shock could have been avoided," it said, while setting aside both the orders.

The top court said that for a municipal corporation, the property tax is the main source of revenue to undertake its welfare and developmental activities. PTI MNL MNL KSS KSS