While rejecting the petition of Tata Motors, a bench of justices R V Raveendran and A K Patnaik said the local authority has the right to impose non-agricultural cess on the company.
The apex court also upheld the orders of the Bombay High Court, which had rejected the claims of Tata Motors that the cess did not apply to company's plant as it was located on a land on government lease and a government lessee or a tenant of the Development Authority was not liable to pay the non-agricultural assessment.
Tata Motors had taken plots on lease from Maharashtra Industrial Development Corporation and Pimpri-Chinchwad New Town Development Authority for construction of its factory in 1997 and started production in 1999 from the same.
However, on February 26, 2002, the company was served notices by the local village panchayat of the Gar Kamgar Talathi, Chikhali, where the project is based and was asked to pay Rs 45 lakhs as non-agricultural cess from 1996.
This was challenged by the company before high court, which on July 2007 rejected its plea and held that the land in question was not a government lessee and, therefore, the company was liable to pay the non-agricultural assessment.
However, the high court added that the cess would be applicable from 1999 when production from the plant started and not 1996, when the lease was executed.
This was again challenged by the company before the Supreme Court, which also rejected its petition. However, the apex court asked Tata Motors to approach the revenue authority over quantum of cess.
"We find no error in the order of the High Court. Consequently this appeal is dismissed, reserving liberty however to the appellant to file objections before concerned Revenue Authority, if it has any objection or grievance in regard to the quantum of non-agricultural assessment claimed in regard to the property leased to it," the apex court said.