"Non-levy of Property Tax and licence fee on windmill: There were 196 windmills in Panagudi TP of Tirunelveli District. Windmills and transformers were embedded on earth and power rooms constructed separately. Though the TP worked out Property Tax for the windmills, it failed to raise demand to collect the tax. The Property Tax thus foregone worked out to Rs 82.78 lakh since installation of mills upto March 2008. Section 344 of TNDM Act, 1920 provides for distraint action against defaulters under rule 30 of Taxation Rules. The failure of the Town Panchayat to invoke the above provisions resulted in non-realisation of Property Tax of Rs 82.78 lakh.
The TP through a resolution dated 28 January 2004 fixed rates of licence fee for windmill with reference to horsepower rating and also a half yearly fee of Rs 1,250 per windmill. However, these fees were neither got approved by Government nor notified in the District Gazette. The licence fee and half yearly fee recoverable from 196 windmills installed up to 2007-08 worked out to Rs 2.09 crore and Rs 17.66 lakh respectively up to March 2008.
The TP stated (May 2008) that letters were issued in January 2006 to 30 windmill owners to pay the dues but as there was no response from the owners, demands were not raised. Failure of the Town Panchayat to notify the above fees resulted in non-realisation of revenue of Rs 2.27 crore.
The Commissioner of Town Panchayats (February 2009) stated that the Assistant Director of Town Panchayats, Tirunelveli and Executive Officer, Panagudi Town Panchayat have been instructed to raise demand for arrears."
(Audit Report (Local Bodies), Tamil Nadu For the Year 2007-2008 http://www.cag.gov.in/html/LB/TN07_08TL/ulb-chap_2.pdf p. 6)