HC directs star hotel to pay Rs 10 cr towards property tax Chennai

The Madras High Court today restrained the city corporation from taking coercive measures against a star hotel here over property tax dues on the condition that it pay Rs 10 crore in three instalments, pending its appeal in a civil court.

Justice M Duraiswamy was allowing a plea by the Crowne Plaza Hotel, which has been slapped with a property tax demand of Rs 24.39 crore.

It moved the court after civic officials, on March 21, allegedly arranged for beating of drums and parked conservancy trucks in front of the hotel, which was hosting guests, including those from overseas and IPL cricket players, in a bid to collect the dues.

The hotel management had alleged that the corporation staff arranged for the drums to garner its attention to the tax dues, besides parking conservancy trucks in front of the hotel gate obstructing entry and exit.

When the petition came up for hearing today, Justice Duraiswamy, granted injunction against the corporation with the condition that the first instalment of Rs three crore be paid by March 30.

And the balance shall be paid in two instalments-Rs 3.5 crore each by April 30and May 30, the judge ordered.

Earlier when the petition was heard on March 23, the judge had refused any interim relief unless the hotel agreed to pay Rs 10 crore.

He had observed that it was only due to such defaults, the corporation was struggling even to pay salaries to its staff.

The counsel for the hotel had contended that the management never said it would not pay the tax. The assessment had been challenged in a civil court and they would comply with the court's direction.

The petitioner had described as unfair the method adopted by the corporation in the guise of collecting tax dues by bringing drum beaters and parking conservancy trucks.

During today's hearing, the hotel's counsel submitted they could pay Rs two crore in a couple of days, and another Rs three crore in a week and Rs six crore within two months.

Refusing to accept it, Additional Advocate General Narmadha Sampath said, "If the hotel is allowed to pay the tax dues in instalments, it would set a bad precedent to other such defaulters."