In a major relief to HCL Technologies Ltd, the Madras High Court has held that the Company is liable to pay property tax at the tax rates applicable to commercial units from the year 2018 only and has directed the authorities not to lock the premises.
The petitioner, M/s HCL Technologies Limited, has contended that they cannot be saddled with property tax liability at rates applicable to Commercial units as the petitioner is a software industry and therefore, cannot saddled with excess tax liability.
It was contended that the respective levy of tax from 2011 retrospectively is arbitrary, illegal, and contrary to the provisions of the Chennai City Municipal Corporation Act, 1919. It is further submitted that the impugned order dated 28.09.2022, was served on the petitioner at 3.00 p.m on 29.09.2022 and on 30.09.2022, two Officers from the respondent Corporationthreatened to seal the premises. On the same day, all the staffs were asked to leave the premises and at about 5.45 p.m. the premises were locked though the petitioner paid a sum of Rs.50,00,000/- under protest and handed over a protest letter to the respondents.
Justice C. Saravanan observed that “Prima facie, it appears that the imposition enhanced tax on the petitioner appears to be contrary to the provisions of Chennai City Municipal Corporation Act, 1919 and G.Os. A similar issue relating to levy of privilege fee under the provisions of the Tamil Nadu Prohibition Act, 1937 and the relevant Government Order came to be considered by this Court in W.P.No.31057 of 2017 and an order was passed on 11.06.2021.”
Granting relief to the petitioner, the Court held that “the petitioner is prima facie liable to pay tax on commercial rates only from 2018 and since the petitioner has already deposited a sum of Rs.50,00,000/- ( Rupees Fifty lakhs only) on 30.09.2022, I direct the petitioner to deposit another sum of Rs.25,00,000/- ( Rupees Twenty Five Lakhs only) within a period of two weeks from today. The second respondent Corporation Deputy Commissioner is directed to not to lock the premises of the petitioner HCL Technologies Limited pending disposal of the appeal.”
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