The TTZ is an area of about 10,400 sq kms spread over the districts of Agra, Firozabad, Mathura, Hathras and Etah in UP and Bharatpur in Rajasthan.
A bench of justices Madan B Lokur and Deepak Gupta questioned Additional Solicitor General Tushar Mehta, appearing for the UP government, on why leather industries and hotels were coming up in the TTZ when such activities were stopped earlier.
Mehta submitted that he would seek instructions on the issue and get back to the court.
The bench also asked the state government to file within four week a vision document on protection and preservation of the 17th century mausoleum.
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The court had in December last year said that a detailed and comprehensive vision document and plan with a futuristic perspective which could protect and preserve the iconic monument, its environs and the TTZ for at least a few hundred years, should be prepared.
The counsel told the bench that 122 km of pipelines out of the 130 km, had already been laid and for remaining eight km, the authorities need to cut 234 trees and the TTZ had granted permission for it.
To this, the bench asked, "Where is the land for planting trees? What about the mortality rate of trees already planted there? You answer this."
It observed, "The mortality rate (of trees) is 80 per cent and there is no land for planting trees."
Environmentalist M C Mehta, who has filed a plea seeking protection of the Taj from the ill-effects of polluting gases and deforestation in and around the area, told the bench that he had attended a meeting of the authorities concerned last month to discuss the issue related to protection of the monument.
"In my view, no satisfactory discussion took place," he said, adding that he had not yet received the minutes of the meeting.
Meanwhile, advocates representing the leather and glass industries referred to separate applications filed by them but the bench said it would hear these matters after four weeks.
The apex court would also take up during the next hearing another application seeking permission to cut trees for widening of road near Govardhana Hill in Mathura.
The TTZ had earlier told the court that a "no construction zone" was declared in a-500 metre radius area of the Taj and the state government had envisaged a comprehensive plan to ensure balance between environment and development.
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