The Madras High Court has upheld the levy of infrastructure and amenity charges on multi-storeyed constructions, commercial buildings and group developments.
In a common judgment on a batch of appeals and writ petitions, a Division Bench, consisting of Justices R. Banumathi and T.S. Sivagnanam, said the levy was to meet the impact of development and for ensuring sustainable growth of urban and rural areas by providing adequate infrastructure and basic amenities.
The levy was on change of use of land or building and such levy was only for multi-storeyed, commercial, information technology, industrial, institutional and special buildings and group developments.
By an order of June 1, 2007, the government decided to collect infrastructure and basic amenity charges giving powers to the Director of Town and Country Planning to fix different rates for each of the categories of buildings for different areas considering various aspects of development, including infrastructural needs. Later, the government amended the Tamil Nadu Town and Country Planning Act inserting two new sections 63 B and 63 C which dealt with the levy of infrastructure and amenity charges. In January 2008, rules were framed.
In the batch of cases before the court by promoters and property developers, the newly inserted provisions were challenged.
A few petitioners challenged the levy. On June 30, 2011, a single Judge dismissed the writ petitions challenging the validity of the new sections in the law and the rules.
Counsel submitted that the fixation of the infrastructure and amenity charges bore no rational nexus to the developmental impact or with the legislation’s object. It was also not known as to how much money was allotted for sustainable development of the area.
The Additional Advocate-General, P.H. Arvindh Pandian, submitted that the levy of charges was to ensure sustainable development leading to the formation of well planned urban areas with all facilities. The government decided collection of these charges for different categories at the rates not exceeding a limit.
The Bench held that the State had power to levy a fee in the nature of infrastructural and amenities charges for creating infrastructure and to provide basic amenities. More particularly when the levy was on the nature of use of the land or building. It also held that the charges did not amount to a multiple levy, but a levy with a distinct purpose, object and intent.
The scheme of the rules provided for clear guidance as to how the charges should be assessed, levied and collected. The provisions had sufficient in-built guidelines.
It was clear that the charges collected had been utilised for providing adequate infrastructure and basic amenities to meet the impact on development and ensuring sustained development of not only urban, but also rural areas.
From facts, it was evident that the levy was for special benefits conferred on the development of a distinct category of buildings having special burden on the services to be extended consequent on such benefits and could not be negatived by stating that such services were a statutory obligation, the Bench said and dismissed the writ petitions and appeals.