New Delhi, Sept. 17 -- The Delhi High Court has upheld the validity of the Municipal Corporation of Delhi's (MCD) decision to impose higher property tax on hotels classified as three-star and above, rejecting the contention that such classification was arbitrary or violative of Article 14 of the Constitution.

The petitioners, including several hotel associations, had challenged the levy of a uniform Use Factor (UF-10) and the maximum 20 per cent tax rate, arguing that the classification of hotels on the basis of voluntary star ratings lacked statutory backing and unfairly burdened establishments offering similar municipal service usage.

The Court, however, disagreed and noted that the star-rating system developed by the Ministry of Tour...