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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
JYOTI MULIMANI, J.
M/s. Gururaja Glass Works – Appellant
Versus
The Panchayat Development Officer – Respondent
Writ Petition No.11359 of 2014 (LB-RES)
Decided on : 01-06-2021
Panchayat Jurisdiction - Industrial Area - Karnataka Industrial Areas Development Act, 1966 - Sections 3(1), 199, 200, 201 - The court quashed the notices issued by the Panchayat demanding tax and cess for the industrial building in an area formed by the Karnataka Industrial Areas Development Board (KIADB). The court held that the Panchayat had no jurisdiction over the industrial area as it was formed under the KIADB Act, and the Panchayat's actions were illegal and unsustainable in law.
Fact of the Case:
The petitioner, an industry allotted a plot in an industrial area formed by the Karnataka Industrial Areas Development Board, was harassed by the Panchayat demanding tax and cess for the building. The petitioner approached the court seeking relief.
Finding of the Court:
The court found that the Panchayat had no jurisdiction over the industrial area formed by the KIADB and quashed the notices issued by the Panchayat. The respondents were directed to consider the petitioner's representation within four months.
Issues: Jurisdiction of the Panchayat over the industrial area, legality of the notices issued by the Panchayat, and the authority of the KIADB in forming and maintaining the industrial area.
Ratio Decidendi: The court held that the Panchayat had no power to intervene in the industrial area formed by the KIADB and that the Panchayat's actions were without any legal authority. It emphasized that the power to levy tax by the Panchayat is limited to the buildings and lands in the Panchayat area, and the industrial area formed by the KIADB was not under the Panchayat's jurisdiction.
Final Decision: The writ petition was allowed, and the notices demanding tax and cess were quashed. The respondents were directed to consider the petitioner's representation within four months.
ORDER :
Sri Basavaraju V.Sabarad, learned counsel for petitioner and Sri M.S.Devaraju, learned counsel for respondents 1 and 2 have appeared through video conferencing.
2. It is stated that the petitioner is an industry having its unit at plot No.231-C, KIADB Sompura I.A, Dobespet Bangalore Rural, Bangalore-562211. The Karnataka Industrial Areas Development Board (KIADB) has developed Sompura Industrial Area 1st stage near Dabbaspet by invoking the provisions of the Karnataka Industrial Areas Development Act, 1966 ('the Act' for short) and Rules made there under. It has formed several plots for allotment in favor of entrepreneurs.
It is stated that the petitioner was initially allotted one acre of land in Plot No.213 on 21.11.2008 but later the allotment was changed to Plot No.231(C). The plot was allotted to establish an industry for manufacturing of Toughened Glass and laminated safety glass on 25.02.2010. The petitioner was required to obtain sanction to the building construction plan from the KIADB. The Board maintains the industrial area by collecting all requisite charges, however due to certain environmental issues, the Board is not collecting charges from the petitioner and asking them to shift from the area. It is stated that the petitioner has complied with the terms of allotment, agreement and has paid all leviable charges to the Board.
It is averred that the industrial area does not form part of Panchayat area of Manne Village Panchayat notified under Section 4 of the Karnataka Gram Swaraj and Panchayat Raj Act, 1993. The Panchayat at Manne Village has not provided any facility/services. The Board has formed the Industrial Area after acquisition of lands, formed roads, provided water and electricity and collects charges for their maintenance from the industrialists to whom plots are allotted.
It is stated that the industrial area is not handed over to Panchayat. The Panchayat has not provided any infrastructure or facility to the Industrial Area. Notwithstanding the aforesaid facts, the Panchayat is harassing the petitioner in respect of the industrial plot without ascertaining as to whether it has jurisdiction and also whether the provisions of the Panchayat Raj Act are made applicable to the industrial area. It is specifically stated that several representations have been made and meetings have been conducted by the Government Authorities on this menace but in vain. It is alleged that persons from Panchayat come in groups and impose threats to the persons in-charge of the unit. It was therefore decided to write to the District Superintendent of Police to stop the menace. Accordingly, the Chief Executive Officer and Executive Member of KIADB has written a letter to the Superintendent of Police on 21.03.2013. Further, on 21.03.2013 the KIADB has written letter to the first respondent that the building plans are to be approved by them only and not by the panchayat.
As matter stood thus, the Panchayat issued a notice on 20.01.2014 stating that the petitioner is required to pay tax and cess for the building and has to obtain license, failing which, the electricity supply would be stopped and the factory would be closed. The petitioner gave a suitable reply on 29.01.2014 denying the allegation made in the notice. Petitioner has averred that without providing any details, a group of persons on behalf of Panchayat are visiting regularly and threatening to close the industry forcibly. To the shock and surprise of petitioner, Panchayat issued a notice on 12.02.2014 stating that the electricity supply will be stopped as the petitioner has not renewed the general license and also not paid the tax.
Under these circumstances, left with no other alternate or efficacious remedy, petitioner has invoked the writ of jurisdiction of this Court under Articles 226 and 227 of the Constitution of India.
3. Learned Counsel for petitioner has urged several grounds.
4. Heard the contentions urged on behalf of petitioner and respondents and perused
A local authority cannot impose property taxes on industrial establishments unless explicitly authorized by law, especially when the area is governed by a specialized statutory framework.
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