Indian Express 27.07.2010
Civic body to issue fresh notice to DMRC on property tax
Ayesha Arvind Tags : MCD notice to DMRC, delhi Posted: Tue Jul 27 2010, 01:10 hrs
New Delhi: Even as the Delhi Metro Rail Corporation (DMRC) seems to be standing its ground on the issue of property tax, the Municipal Corporation of Delhi (MCD) is all set to issue a fresh notice to the DMRC, asking for around Rs 252 crore that it owes the civic body as “property tax and service charge”.According to the MCD, the order is based on the recent relevant High Court and Supreme Court judgments that make DMRC liable to pay for commercial development of Metro properties in the form of property tax or service charge as applicable.
The Corporation says that DMRC is liable to pay tax against commercial development of Metro properties as it uses municipal resources. The MCD further denies the DMRC claim of seeking exemption under the Railways Act, saying that the properties concerned do not fall within the ambit of the definition of “Railway” as occurring in the Railway Act, 1989.
Mayor Prithvi Raj Sawhney said the MCD had recently met Lieutenant Governor Tejendra Khanna over the issue.
Khanna “granted his assent to the order, thus saying that the DMRC will have to pay the due amount within the 30 days once the notice is served”.
The MCD had recently sought a list from DMRC of all such properties developed commercially, the location and use of the same and the details of lease/rent agreements of all such Metro properties to assess the due amount. The list included properties such as the Delhi Information Technology Park, two properties spread over 2,000 sq metres and 7704 sq metres leased to M/s Parsvnath Developers near Pratap Nagar Metro Station and Shahdara Metro Station respectively, among other properties.
The tussle began with MCD’s first demand notice to DMRC in 1999, asking for Rs 66,83,300 as property tax. After this, the Corporation sent another demand note in 2000. The DMRC then filed a case in the High Court, saying it was not liable to pay property tax to the MCD as it is a part of the Indian Railways.On February 26, 2003, the High Court said that the MCD consider DMRC’s contention on merit on whether it was liable to pay property tax or not.
After this, say MCD officials, DMRC’s case was heard by Assessor and Collector of MCD Sangeeta Kampani. The Corporation contended that DMRC was not part of the Indian Railways, but “an independent corporation with the Centre and the Delhi Government as shareholders”.
The order equates the DMRC with organisations such as Scheduled Banks, Airport Authority of India, LIC and similar government corporations, which pay the respective due “service charge” to municipalities concerned.
The Corporation is now formulating a fresh detailed order to the same effect after assessing the due tax amount on all Metro properties that have been commercially developed.
