Deposit under MCD's Amnesty Scheme cannot be made 'subject to' outcome of writ petition: Delhi HC [Read Order]

The Delhi High Court in its ruling held that a taxpayer cannot deposit property tax under the Municipal Corporation of Delhi's (MCD) Amnesty Scheme "subject to the outcome" of a pending writ petition challenging the tax calculation.

P.P. International School, the appellant, approached the court seeking permission to deposit its property tax as calculated by the MCD under the One Time Property Tax Amnesty Scheme 2025-26 (SUNIYO). The request was urgent as the Amnesty Scheme was set to expire on September 30, 2025. The school wanted to make this deposit without prejudice to its rights and contentions in a separate writ petition (W.P.(C) 14836/2025) that challenged the MCD's tax calculation.

The appellant's counsel argued that the MCD's calculated tax under the scheme was three times higher than their own calculation. They contended that if they were forced to accept the MCD's calculation and withdraw all related litigations (a condition of the scheme), they would suffer irreparable financial loss and lose their right to challenge the tax assessment. They proposed a middle ground: allowing the deposit would secure the funds for the MCD, while preserving the school's right to have the underlying tax dispute decided by the court, thus causing prejudice to neither party.

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The MCD's counsel vehemently opposed the request, raising two key arguments. First, he pointed to a previous order from February 2023 concerning a similar MCD amnesty scheme, which was later challenged and restrained by the Supreme Court in August 2023.

It was argued that this Supreme Court injunction prevented the High Court from passing a similar interim order. Second, he asserted that the Amnesty Scheme is a policy decision and a voluntary offer from the MCD. He relied on a Supreme Court judgment to argue that the terms of such a policy cannot be interfered with by the court.

The Division Bench, comprising the Chief Justice and Justice Tushar Rao Gedela, noted that while it was initially inclined to grant the school's request, it was bound by the Supreme Court's earlier order. The court agreed that the Supreme Court's injunction on a similar matter was a binding precedent and that it would not be appropriate to pass the directions sought by the appellant.

Consequently, the court found no merit in the appeal and dismissed it, along with the pending applications. Crucially, the court clarified that it had made no observations on the merits of the underlying tax dispute and that the parties were free to raise all their contentions before the Single Judge in the original writ petition.

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