Delhi High Court Upholds Higher Property Tax on 3-Star and Above Hotels

The Delhi High Court has upheld that the Municipal Corporation of Delhi’s decision to double property tax rates from 10% to 20% for luxury hotels is not arbitrary or capricious. 

Justice Purushaindra Kumar Kaurav ruled that classifying hotels based on star-ratings is a valid legislative measure under the Delhi Municipal Corporation Act, 1957.

Petitioner hotels had challenged the hike, arguing it was arbitrary and unconstitutional.

The Court, however, found the star-rating system to be a reasonable classification, directly connected with the objective of raising revenue from establishments serving affluent clientele.

[M/S Eros Resorts & Hotel Ltd & Anr v. Municipal Corporation Of Delhi and other connected matters]