NAGPUR: In a decision along expected lines, the Nagpur bench of Bombay high court on Tuesday declined to grant stay on the Local Body Tax
(LBT) as demanded by traders. A division bench comprising Justices
Bhushan Dharmadhikari and Arun Chaudhari cited principal bench’s
directives while hearing similar pleas in Mumbai.

However, the
court issued notices to respondents – Urban Development Department and
Nagpur Municipal Corporation (NMC) – before admitting the petition.
Government pleader Nitin Sambre and senior counsel Chandrashekhar Kaptan
waived notices for urban development department ( UDD) and Nagpur Municipal Corporation (NMC) respectively.

The court was hearing five petitions, which were later clubbed. The
petitioners include mayor Anil Sole and 11 other corporators and
traders, Vidarbha Taxpayers Association (VTA) with Tejinder Singh Renu,
Nagpur Chamber of Commerce Limited ( NCCL), Nag-Vidarbha Chamber of Commerce (NVCC), and BSP leader in NMC Murlidhar Meshram with corporator Kishor Gajbhiye. Deven Chauhan and Harnish Gadhia were counsels for the petitioners.

Last week, the principal seat vacated its interim stay while hearing 19
pleas, thus paving the way for implementation of LBT in place of the
150-year-old octroi across the state. Nonetheless, Municipal Mazdoor
Union (MMU) is planning to approach the Supreme Court in this regard.
The LBT, imposed to check massive corrupt practices and ease traffic
congestion at octroi posts, came into effect from Monday at Nagpur,
Mumbai, Pune, Pimpri-Chinchwad, Thane, and Navi Mumbai municipal
corporations.

The petitioners contended that octroi is the
major source of income for NMC to meet its regular expenditure and there
was no need for LBT since VAT already existed. However, on February 25,
2010, the government framed rules for LBT in the name of Bombay
Provincial Municipal Corporation (Local Body Tax) Rules 2010. Exactly
two years later, the government issued a notification directing the
civic body to commence LBT collection from April 1. In the intervening
period, other benches of this court stayed the government action and
permitted various municipal corporations to levy octroi. Even the
petitioners had approached the government demanding similar relief, but
all their efforts went in vain, prompting them to approach the
judiciary.

The petitioners said the limit for registration for
LBT is turnover of sales/purchase of Rs5,000 or more during a year.
However, format of LBT is far more cumbersome than octroi. They
explained that while levying octroi, no special record keeping is
required as once the material enters city limits, octroi is paid on its
cost and the issue ends there itself. But in LBT, separate book keeping,
compilation of data, filling up of forms and timely returns is needed,
followed by assessment, which may also attract chances of penalty,
interest, and payment of fees to professionals.