The Hindu 04.05.2013
VMC gears up to collect property tax from Railways
Supreme Court judgment clears the way for civic body on the issue.
Vijayawada Municipal Corporation (VMC) is gearing up to collect
property tax from Railways, fulfilling its long-cherished dream. The
corporation has been making attempts to collect the tax from the
Railways ever since T. Venkateswara Rao became Mayor of the city. The
first demand was raised in 1984 and the accumulated demand touched Rs.10
crore in 2006.
The Railways, citing a Supreme Court judgment, has been claiming exemption from the property tax.
The
Supreme Court upheld the railway contention that it was not required to
pay property tax. Article 285(1) of the Constitution makes it clear
that property of the Union shall be exempt from all taxes imposed by a
State or by any authority within a State.
The Apex Court, however,
in a recent judgment, while hearing a petition filed by Rajkot
Municipal Corporation, has observed that the Railways has to pay 33 per
cent of the property tax demand if it was not dependent on local body
for any services; and 75 per cent of the demand if it depends on the
local body.
Based on the apex court verdict, the VMC authorities
are gearing up to collect the tax from the Railways here. They, however,
are yet to arrive at the exact demand. A joint meeting of the
Corporation and railway officials is required to settle the matter
across the table.
The authorities from both the organisations will have to go for a joint inspection before finalising the demand, sources say.
The
Corporation, however, is yet to decide whether it has to press the
Railways to clear pending dues or not. It is awaiting pronouncement of a
policy from the State government as the issue has State-wide
repercussions, officials say.
The VMC officials stopped short of
seizing the properties of the Roads & Buildings in December 2007
following the latter not paying the tax dues. However, they did not
touch the Railways.
The VMC, for many years now, has stopped generating the demand for the Railways.
