The non-responsive approach of Delhi Government has been causing monetary loss to the North Delhi Municipal Corporation (NMC) towards payment of property tax by private power distribution companies in the Capital. The Reliance and Tata owned discoms have refused to pay property tax to the tune of Rs30 crore despite the Delhi Government asking them to clear the dues. However, the discoms backtracked and the Government too developed cold feet. Having been restricted by the Delhi High Court from taking coercive action against the companies, the North Delhi Corporation is planning to take up the matter with Delhi’s lieutenant-Governor Najeeb Jung.
Assessor and Collector of North Delhi Corporation, MSA Khan said nearly Rs20 crore is due on the Tata-owned TPDDl (previously NDPl) while the Reliance-owned BRPl and BYPl owe Rs4 crore each to the civic body for the properties in their possession. In a meeting with the then Delhi Chief Secretary Rakesh Mehta, the discoms had agreed to pay tax to the local body but only to backtrack a few months later. With pressure mounting, the discoms went to litigation following which the Delhi High Court stayed the recovery process. The matter was then taken up with the subsequent Chief Secretaries and Power Department officials but in vain.
The discoms have been arguing that it is a licencee and not the owner or lessee of the property and hence, they are not liable to pay tax on the property under their control. Officials said in case a government organisation or an entity is exempted from property tax, it has to pay service tax which is 75 per cent of the property tax amount. Hence, in the present case, the discoms will have to collectively pay nearly Rs21 crore to the corporation.
A senior official said the Delhi High Court has in a recent order allowed the civic body to collect tax on a property owned by TPDDl. However, the court has left it to the corporation to decide whether the tax would be collected from TPDDl or the Delhi Power Company limited, which was formed consequent to the privatisation of the power sector in Delhi. The Delhi Government has 49 per cent share in it. Khan said the same order can be applied in other cases for
recovery of property tax.