In Brief
A frozen-food company stopped consuming water after factory closure in 1983, and the municipal corporation disconnected its water supply in 1993. In 1997, the corporation issued demand notices for water benefit tax for the prior years despite no water consumption. The High Court quashed the demand, treating it as a water charge recoverable only for actual consumption. The Supreme Court allowed the appeal, holding that water benefit tax is a property tax—a compulsory imposition based on rateable value—distinct from consumption-based water charges. Liability persists so long as communication pipes connect the premises to municipal works, regardless of actual supply or usage. The Court imposed interest at 18% per annum (or the statutory rate, whichever is lower) for litigation-pendency periods.
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