Supreme Court Upholds NMMC's Authority to Levy Property Tax in Thane-Belapur Industrial Corridor

In a significant ruling affecting one of Maharashtra’s largest industrial corridors, the Supreme Court has upheld the Navi Mumbai Municipal Corporation’s (NMMC) authority to levy and collect property tax from industries located in the Thane Trans Creek (TTC)-MIDC area, commonly known as the Thane-Belapur industrial belt. The judgment brings closure to a long-running jurisdictional dispute involving industrial associations, MIDC, and the civic body.

The dispute dates back to 2001, when the Small Scale Entrepreneurs Association (SSEA) challenged NMMC’s move to collect property tax in the TTC-MIDC area. The association argued that since MIDC was providing infrastructure and civic services within the industrial zone and collecting service charges, the municipal corporation did not have the authority to levy property tax. After the Bombay High Court ruled in favour of NMMC, the matter was challenged before the Supreme Court in 2010.

A bench comprising Justices Pankaj Mithal and Prasanna B. Varale held that the TTC-MIDC area falls within the territorial jurisdiction of NMMC under the Maharashtra Municipal Corporation Act, the Maharashtra Industrial Development Act, 1961, and the Maharashtra Regional and Town Planning Act, 1966. The court observed that the power to levy property tax is a sovereign function vested in municipal authorities, whereas MIDC is authorised to recover fees and service charges for amenities provided within industrial estates.

The judgment also clarified the distinction between taxes and fees, noting that taxes are imposed by local self-government bodies to support civic administration and public infrastructure, while fees are charged for specific services rendered. Accordingly, the court ruled that MIDC cannot levy property tax and that the authority to do so rests exclusively with NMMC under Sections 127 and 128A of the Maharashtra Municipal Corporation Act.

At the same time, the Supreme Court partly allowed the appeals by holding that industrial units in the TTC-MIDC area were entitled to exemption from municipal property tax for the period during which MIDC itself provided civic infrastructure such as roads, drainage, water supply, sewerage systems, and street lighting. The court held that this exemption ceased once these services were transferred to NMMC under an agreement executed in December 2005. From that date onward, NMMC became entitled to levy and recover property tax on the transferred areas and properties.

The ruling is expected to have significant financial implications for the civic body. According to officials, pending property tax dues in the TTC-MIDC belt exceed INR 800 crore and involve more than 3,000 industrial units operating along the corridor. The verdict clears the way for NMMC to proceed with tax recovery while providing legal clarity on the respective roles of municipal corporations and industrial development authorities in Maharashtra’s industrial regions.