The corporation has been making attempts to collect the tax from the railways ever since T. Venkateswara Rao became the Mayor. The first demand was raised in 1984, and the accumulated demand touched Rs. 10 crore in 2006.
The VMC has been asking the railways to pay at least 50 percent of the property tax demand. But, the railways have said it will pay 33 per cent. And, the dues will be Rs. 5.5 crore if 33 per cent is to considered, sources say.
The Supreme Court, while hearing a petition filed by Rajkot Municipal Corporation, observed that the railways have to pay 33 per cent of the property tax demand if it was not dependent on local body for any services; and 75 per cent of the demand if it depends on the local body.