Bombay High Court – Liability to pay water tax even if Corporation water was not consumed.

Water connection of Corporation was provided to the building before its redevelopment.   On the request of the Petitioner, the BMC disconnected water supply on 4.11.1997.

The Petitioner used water tankers for its redevelopment construction and after completion, applied to the Corporation for water connection.

On 6.2.2004, the Corporation issued bill of Rs.21,62,245/- for property tax including of Rs.8,77,042/- as also water benefit tax of Rs.1,68,662/-.

This was challenged on the ground that since there was no actual water supply, the Corporation could not levy water tax and sewerage tax.  The property taxes are compulsory levy and liability to pay water & water benefit tax accrues even if there is no consumption of water.  The Corporation can levy water tax under section 140(1)(a)(i) of the MMC Act once the water supply is made available to the owner / occupier of a property.

The question no.3 before the Full Bench was whether “water tax” and “water benefit tax” are to be levied in addition to payment of water charges or levy of “water charges” is in lieu of water & water benefit tax.  HELD that, interpreting the provisions of Section 169(1)(ii) of the MMC Act it is not necessary for the owner / occupier to pay both water charges for actual consumption of water as well as water tax / water benefit tax.  Water charges paid on the basis of consumption would be in lieu of property tax in the form of water tax or water benefit tax.

HELD that the “water tax” and “water benefit tax” which form part of property tax from that of “water charges” which are levied on actual water supply.

Judgment dated 23.8.2024 of the Full Bench of the Bobay High Court in Writ Petition No.455 of 2005 of MARS Enterprises  Vs. Mumbai Municipal Corporation of Greater Mumbai with connected matter