Mumbai News: Contempt Notices Issued To BMC, MMRCL For Defying HC Orders On Metro Contractors' Tax

A contempt notice has been served to the BMC and Mumbai Metro Rail Corporation (MMRCL) for taking coercive actions to recover property tax from MMRCL-appointed contractors despite a stay order from the Bombay High Court.

The BMC had written to MMRCL on January 31 seeking coercive recovery of tax of more than Rs332 crore from the four contractors who have been allotted Wadala Truck Terminal land for a casting yard. MMRCL also wrote to its contractors asking them to clear the outstanding tax.

The four contractors are CEC-ITD Cementation–Tata Projects Ltd Consortium; Larsen & Toubro–STEC JV; Hindustan Construction Company–MMS JV; and Dogus Soma JV.

The companies had filed a writ petition in the HC against the notice and on April 30, 2024, the court had granted them interim relief.

“The actions of MCGM and MMRCL of forcefully trying to recover property taxes from the contractors’ bills is clearly not justified and against the orders of the court. The HC has granted ad-interim reliefs and contractors have been protected against coercive recovery of property taxes,” said Advocate Prerak Choudhary, who has sent the contempt of court notice to BMC and MMRCL.

As per the letter from BMC’s assistant assessor and collector (F-North) to MMRCL, the property tax to be recovered from the four contractors is: CEC–ITD, Rs98.88 crore; L&T–STEC, Rs83 crore; Dogus Soma, Rs97.71 crore; and HCC-MMS, Rs53.17 crore.

Deputy Municipal Commissioner (Assessor & Collector) Vishwas Shankarwar told The Free Press Journal that he was unaware of any HC stay on recovery of property tax from metro contractors or any contempt notice. However, he promised to get updates from the legal department.

Choudhary, who represents three of the four contractors, said that the municipal corporation has charged property taxes in violation of Section 184 of the Railways Act, 1989, which carves out an exemption for land used in connection with railways (which includes metro railway).