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Informist, Tuesday, Aug 27, 2024

 

NEW DELHI – The Bombay High Court has held that the Municipal Corporation of Greater Mumbai can levy water tax and water benefit tax irrespective of whether the owner or occupier of a property actually uses any water from the civic supply.

 

"The Municipal Corporation can levy 'water tax' under Section 140(1)(a)(i) of the Mumbai Municipal Corporation Act, 1888, once the facility of water supply is made available to the owner/occupier of a property and whether he actually consumes water or not becomes immaterial," the court said.

 

Similarly, a mere difference in the purpose behind the levy of the 'water benefit tax', which is to meet the expenditure to lay, operate, and maintain pipelines, would make no difference as it is also a component of property tax and would be leviable on the same pedestal as (the) 'water tax', the court held.

 

Further, the court said it was not necessary for an owner to pay both the charges for actual water consumption and the water and water benefit taxes. "Once (the) owner/occupier avails of water supply facility and becomes liable to pay water charges under the provisions of Section 169(1)(ii) of the Act, payment of such water charges would be in lieu of water tax and water benefit tax," the court noted.

 

A bench of Justice A.S. Chandurkar, Justice Manish Pitale, and Justice Sandeep V. Marne was hearing a reference arising from conflicting views taken by a division bench of the court on the issue of the liability of the owner or occupier not consuming water supplied by the corporation to pay water tax and water benefit tax.

 

One of the petitions before the court was of the Oil and Natural Gas Corp Ltd, which challenged a notice of demand in 2000 by the corporation seeking payment of water tax. ONGC possessed a plot of land at H Block, Bandra Kurla Complex, and was paying property tax to the municipal corporation. The property tax did not include water taxes.

 

In 1998, ONGC submitted to the corporation its plan to construct a building on the plot. In 2000, the civic body raised the demand to levy water tax at 130% of the plot's rateable value. ONGC questioned the levy, arguing that it had not procured a water connection for the plot.

 

However, the high court took note of an order passed by the Supreme Court in 2020, which held that water tax and water benefit tax form part of property tax under the Act. The top court ruled that both taxes became payable as soon as the owner or occupier of a property is in a position to avail of a water connection to the premises, and the liability is inevitable even if the water supply is disconnected.

 

Today, shares of the Oil and Natural Gas Corp ended slightly higher at 328.85 rupees on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

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