Mysore Grahakara Parishat has filed a case for permanent injunction
restraining the Mysore City Corporation from the levying taxes not
permitted under the Karnataka Municipal Corporations Act, 1976. The case
(O.S. No. 1177/2012) is being heard by the 3rd Additional Civil Judge
(Junior Division). The following is the gist of MGP's argument.
Many of the taxes being levied by MCC are illegal and the procedure adopted by MCC to calculate the tax is also illegal.
MCC is a statutory body created by the KMC Act and it derives
all its powers from the Act. Sec. 103 of the Act defines all the taxes
that can be levied by MCC and MCC can not levy any tax other than those
enumerated therein, namely,
a) a tax on buildings or vacant land or both , i.e., the property tax (Sec. 103(b)(i) of the Act),
b) a tax on advertisement (Sec. 103(b)(vi) of the Act),
c) additional stamp duty on certain transfers of property (Sec. 103(b)(vii) of the Act),
d) infrastructure cess (Sec. 103B(1) of the Act) and
e). solid waste management cess (Sec. 103B(2) of the Act).
a) a tax on buildings or vacant land or both , i.e., the property tax (Sec. 103(b)(i) of the Act),
b) a tax on advertisement (Sec. 103(b)(vi) of the Act),
c) additional stamp duty on certain transfers of property (Sec. 103(b)(vii) of the Act),
d) infrastructure cess (Sec. 103B(1) of the Act) and
e). solid waste management cess (Sec. 103B(2) of the Act).
These taxes are the only lawful taxes that can be levied by MCC.
But MCC is also levying the following taxes: 1) health cess, 2)
anti-beggary cess, 3) library cess, 4) vacant site cleaning cess, and 5)
UGD cess. MGP filed an application under the Right to Information Act,
2005 asking MCC the provisions of the KMC Act under which the taxes 1-4
are levied. In its reply MCC did not quote any sections of the Act.
Instead it said that they are levied on the basis of various government
orders. So it is clear that these taxes do not have the sanction of the
Act. Since no section of the Act gives MCC powers to levy these taxes
and since government orders can not give MCC powers not expressly
provided by the Act, the levy of these taxes is illegal and liable to be
quashed. Similarly, the UGD cess is also not sanctioned by any section
of the Act and hence is illegal and liable to be quashed.
In calculating property tax, MCC permits an annual depreciation
of the value of buildings, again based on a government order. Since no
section of the Act gives MCC powers to allow depreciation and since
government orders can not give MCC powers not expressly given by the
Act, allowing depreciation in the calculation of property tax is illegal
and is liable to be quashed.
In calculating property tax, MCC permits a 50% rebate for
self-occupation. In its reply to the RTI application, MCC says that Sec.
109A of the Act is the basis for allowing the depreciation. But Sec.
109A which permitted 50% rebate was repealed in 2005 and replaced by a
new Sec. 109A. The new Sec. 109A (see below) says nothing about the
rebate. So the 50% rebate is not sanctioned by any section of the Act
and hence is illegal and liable to be quashed.
MCC is forcing the citizens to calculate the property tax afresh
every year. This is illegal and contrary to Sec. 109A of the Act which
clearly says that the property tax shall not be assessed each year but
shall stand enhanced by 15 percent once in every three years commencing
from the financial year 2005-2006. So once the property tax is
calculated, it need not be calculated afresh every year after that.
Since property tax is "Self assessed" by the tax payers, it is the
intention of the Act to make the calculation as simple as possible. It
was also the intention of the Act to protect the property owners from
steeply escalating taxes due to escalation of property values. It is for
these reasons that the Act has prohibited fresh calculation of property
tax every year. Forcing the citizens to calculate the property tax
every year is illegal and liable to be restrained and quashed.
Sreemathi Hariprasad, Mysore Grahakara Parishat