Punjab News 5,000% hike in house tax on Nestle unit, HC slam Punjab


*FrOzEn TeARs*
Punjab and Haryana High Court has stayed a massive 5,000 per cent increase in house tax levied on multinational company Nestle by the Punjab government. The court slammed the government for its “unreasonable” demand on the company, and remarked that if such policies continued, no industry would invest in Punjab.
Nestle, which has had a large factory in Moga for over 50 years, went to court after the Moga municipal council issued a notice to the company on March 5, 2008, raising the annual property tax on its premises by around 50 times to Rs 2 crore from the less than Rs 4 lakh that it was paying then.
Nestle challenged the order, and obtained a stay from the additional deputy commissioner cum collector, Moga. After the municipal council challenged the order successfully, the company went to the high court.
The council has imposed the tax retrospectively from 2001-02, and demanded Rs 17 crore in arrears.
The company pleaded before the high court that it had made no substantial alterations to the premises since 2001, and that the demand for tax and arrears was “arbitrary, illegal, unjust and unconstitutional”. Senior lawyer M L Sarin, assisted by advocate Rohit Khanna, argued that as per rules, the most a state can raise tax on account of a rise in market price was 10 per cent.
Staying the recovery, Justice Ranjit Singh asked the Punjab law officer whether the state wanted that no industry should remain in Punjab. With such notices, the court said, no industry would like to invest in Punjab.
The judge asked the Punjab government to be reasonable, and directed Nestle to pay the tax at a 10 per cent rate of increase. The court gave the Punjab government and the Moga municipal council two months to respond.

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