No coercive steps against DIAL for Rs 2,600 cr tax demand: Delhi HC to DCB

The Delhi High Court Thursday directed Delhi Cantonment Board (DCB) not to take any coercive action against DIAL, which operates the IGI Airport, in connection with the Rs 2,600 crore property tax demand by the authority for the 2016-19 period.

A bench of Chief Justice D N Patel and Justice Prateek Jalan issued the direction after the DCB sought one more week to file its response to DIAL's plea challenging the property tax demand.

The court noted that both the Centre and the DCB are yet to file their replies and are seeking more time to do so.

"Time as sought is granted to file the replies. Meanwhile, no coercive action be taken against the petitioner (DIAL) till the next date of hearing," the bench said and listed the matter on September 14.

Issuing notice to the Centre and the DCB on July 22, the court had refused to pass any interim order on the plea seeking stay on the June 15 decision of the board or protecting the Delhi International Airport Ltd (DIAL) from any coercive action for non-payment of the amount which had to be paid within 30 days of raising of the demand.

Besides seeking quashing of the June 15 order demanding over Rs 2,589 crore, the plea has sought a declaration that the land on which Indira Gandhi International Airport is located is not a cantonment and therefore, does not fall in DCB jurisdiction.

The petition has also sought setting aside of the past letters of DCB seeking payment of varying amounts of property tax in respect of a certain portion of the airport land which was purchased in 1940 by the International Airport Authority of India from the Defence Estate Authorities (presently DCB) for a consideration of Rs 4.61 crore.

According to the petition, part of the airport land falls in jurisdiction of the South Delhi Municipal Corporation for which DIAL pays property tax to the civic body.

For the remaining portion, DCB has been demanding property tax.

The petition has said that in 2016 DCB first raised a demand of Rs 9.01 crore which was disputed by DIAL.

Thereafter, DCB sought to revive the assessment in 2019 and under the revised assessment it demanded Rs 39.51 crore as property tax, DIAL said in its petition.

It has said that the 2019 demand was challenged in the high court which asked DCB to hear DIAL and also provide it a reasoned order explaining the calculations on how the amount had been arrived at.

However, after hearing DIAL, DCB issued a fresh demand of nearly Rs 2,600 crore.

DIAL has contended that instead of explaining how it arrived at the earlier amount, DCB "completely revised the amount and sought to impose a completely arbitrary and exorbitant amount".

DIAL has also contended that if such a huge amount is levied on it, it would be constrained to recover it through the tariff charged at the airport which would ultimately be transferred to the passengers as an undue financial burden.