The Supreme Court, in an order issued on Wednesday, declared that the Navi Mumbai Municipal Corporation (NMMC) is the competent authority to collect property tax in the Thane Trans Creek-MIDC (TTC-MIDC) area, commonly known as the Thane-Belapur industrial corridor. This verdict resolves a prolonged legal dispute and paves the way for NMMC to collect property tax from over 3,000 industries along the corridor.
Background of the Case
The case originated from a petition filed by the Small Scale Entrepreneurs Association (SSEA), Thane Trans Creek-MIDC area, in the Bombay High Court in 2001. The SSEA challenged NMMC's order to collect property tax, citing a jurisdictional issue as the Maharashtra Industrial Development Corporation (MIDC) was also levying service charges in the same area. The High Court ruled in favor of NMMC, prompting the SSEA to appeal to the Supreme Court in 2010.
Supreme Court's Ruling
The Supreme Court examined the jurisdictional question and determined that the entire TTC-MIDC area falls under NMMC's jurisdiction based on provisions of the Maharashtra Municipal Corporation (MMC) Act, the Maharashtra Industrial Development Act of 1961, and the Maharashtra Regional and Town Planning Act of 1966. The Court clarified that tax and fee are distinct concepts. The sovereign right to levy tax lies with the municipal corporation as a local self-government body, while fees are levied as a surcharge or remuneration for services rendered and are not considered taxes.
The Court further stated that MIDC can only levy fees, not taxes, and affirmed NMMC's right to levy taxes under Sections 127 and 128A of the MMC Act. Officials noted that the argument of double taxation has been proven incorrect, as the apex court distinguished between tax and duty while establishing NMMC's tax-levying authority for this area.
Impact and Reactions
Municipal Commissioner Kailas Shinde expressed satisfaction with the verdict, stating that the issue of property tax levy in the TTC-MIDC area, pending for many years, has been settled. He emphasized that city development works are funded through tax revenue collected by the civic body, and the additional revenue will give new impetus to development. He appealed to small entrepreneurs to contribute to the city's growth by paying property tax in compliance with the Supreme Court order. The pending property tax dues amount to over Rs 800 crore.
However, K R Gopi, former president of SSEA and president of the TTC-MIDC Industries Association, announced plans to challenge the decision by filing a review petition. He stated, "We will present our case once again. We are fighting against dual taxation from both MIDC and NMMC." The dispute highlights ongoing tensions between industrial associations and municipal authorities over taxation.
