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5. Since the demand for payment of development charges were on account of the amended provisions of the Chennai Metropolitan Water Supply and Sewerage Board Act, the petitioner challenged the validity of Section 6(2)(xii-a) and 81(2)(jj) of the said Act.

6. The amended Act was challenged mainly on the ground that the infrastructure development has nothing to do with the individual promoters. It was the further contention of the petitioners that the levy was essentially in the nature of a tax though styled as a "fee". According to the petitioners, there is no quid pro quo for the demand of infrastructure development charges and as such, the levy is arbitrary and is nothing but a colourable exercise of power.

7. The CMWSSB in their counter affidavit filed originally justified the collection of infrastructure development charges. According to CMWSSB, the Board has spent considerable amount for providing infrastructural facilities required by the developers and as such the development charges were rightly levied. It was their further contention that multistoried and special buildings are the structures responsible for the discharge of sewerage at single point to public sewer system in huge quantity and are not in proportion to the capacity of designed sewers. At the same time, the demand for supply of water to such premises at single point has suddenly increased. The Board cannot anticipate any such development so as to provide the infrastructure facilities in advance leading to dead investments. Therefore, considering the total expenditure required for providing infrastructural facilities and to maintain the water supply and sewage system, the Act was amended authorising the Board to collect infrastructure development charges.

11. Subsequent to the remand, the CMWSSB and the State of Tamil Nadu filed separate counter affidavits justifying the imposition of infrastructure development charges. The Board as well as the State in their respective counter affidavits through facts and figures explained the total expenditure incurred towards improvement of the existing water supply and sewage system and to maintain the system. The details of percentage of collection of infrastructure development charges were also given. The State justified the levy by pointing out that less than 2.5% of the actual amount spent by the CMWSSB for providing these facilities alone were collected from the builders.

19. The following table appended to the counter affidavit gives the details of the amount spent by the Board and the amount collected by way of infrastructure development charges.

Sl.No. Year Annual expenditure incurred towards improvements to existing water supply and sewerage infrastructure facilities (Rs. in crores) Infrastructure development charges collected from the developers of Multistoried building and special building (Rs. in corres) Balance amount of expenditure incurred (less infrastructure Development Charges collected ) (Rs.in crores) Source of funds to meet out the balance incurred expendi-ture Percentage on collection of infrastruc-ture Development charges to incurred expenditure on schemes (in %) 1997-1998 142.09 0.21 141.88 World Bank, Commer-cial Banks, L.I.C., Hudco OECF. Govern-ment, TNUDF, JNNURM, etc. 0.15 1998-1999 257.17 3.38 253.79 1.32 1999-2000 278.08 2.92 275.16 1.06 2000-2001 258.57 5.14 253.43 1.99 2001-2002 154.25 4.29 149.96 2.79 2002-2003 126.11 8.21 117.9 6.52 2003-2004 703.53 8.97 694.56 1.28 2004-2005 445.4 7.27 438.13 1.64 2005-2006 154.08 5.92 148.16 3.85 2006-2007 136.29 6.08 130.21 4.47 2007-2008 156.71 6.61 150.1 4.22 2008-2009 173.61 8.62 164.99 4.97 2009-2010 118.53 9.9 108.63 8.36 Total 3104.42 77.52 3026.9 2.5