Mysore City Corporation has issued advertisements in local papers announcing a 15% hike in property tax in Mysore effective from 1-4-10. It is our opinion that it is illegal.
Sec. 109A of the Karnataka Municipal Corporations Act, 1976 which governs increase in property tax says:
109A. Enhancement of property tax.- Notwithstanding anything contained in section 108 and 109 the property tax assessed and levied under either provision shall not be assessed each year thereafter but shall stand enhanced by 15 percent once in every three years commencing from the financial year 2005-2006:
Provided that the Municipal Corporation may enhance such property tax upto 30 percent once in three years and different rates of enhancement may be made to different areas and different classes of buildings and lands:
Provided further that the non assessment of property tax under this section during the block period of three years shall not be applicable to a building in respect of which there is any addition, alteration or variation to it.
Provided also that nothing contained in this section shall be deemed to affect the power of State Government to direct an earlier revision of property tax.
It is clear from the wording that
1. The 15% enhancement can not be effected any time the MCC wants. It can be effected only in the years 2008, 2011, 2014, 2017, ... So it can not be effected in 2010.
2. Only the state government has the power to revise the tax earlier than 2011. But it has not exercised this power.
3. MCC could have decided in 2008 or can decide in 2011, 2014, 2017... that it wants a higher rate of increase than 15%. It did not do so in 2008. It may decide to do so in 2011
So the tax rate hike announced by MCC is violative of the Karnataka Municipal Corporations Act, 1976..
P.M. Bhat, Mysore Grahakara Parishat