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.

ORDER :

1. These batch of writ petitions are directed against the demand notices issued by the respondent-Gram Panchayat levying property tax on the industrial property of the petitioners located within the notified industrial area established and maintained by the respondent-Karnataka Industrial Areas Development Board (KIADB).

2. The petitioners in these batch of writ petitions have called in question the demand notices issued by respondent - the Gram Panchayat contending that the said notices are without jurisdiction. They rely on the provisions of Section 37 of the Karnataka Industrial Areas Development Act, 1966 (for short, "the KIAD Act") read with Section 47 , which vests exclusive authority in the KIADB for planning, development, and maintenance of industrial areas. The petitioners specifically assert that Section 37 stipulates that the provisions of the Karnataka Municipalities Act or the Panchayat Raj Act can apply to an industrial area only upon its withdrawal from the purview of the KIADB by way of an express notification issued by the State Government. It is submitted that, in the present batch of petitions, no such notification has been issued. The petitioners also place reliance on a letter issued by the Chief Executive Officer of respondent – KIADB addressed to the State Government, wherein it is stated that the power to collect property tax on land and buildings and levy license fees within KIADB industrial areas exclusively vests with respondent-KIADB. On that basis, the petitioners submit that the Gram Panchayat lacks the jurisdiction to issue the impugned demand notices.

3. Learned counsel appearing for the petitioners have reiterated the above contentions, emphasizing that the petitioners’ industrial establishments are situated within notified industrial areas. It is submitted that, in the absence of any notification issued under Section 37 of the KIAD Act withdrawing these areas from the jurisdiction of KIADB, respondent - Gram Panchayat has no authority to impose property tax. They further rely on Schedule-IV introduced by way of amendment under Act No.44 of 2015 to the Karnataka Gram Swaraj and Panchayat Raj Act, 1993, which stipulates that the Gram Panchayat shall have the power to levy property tax only if jurisdiction is conferred by a specific notification issued by the State Government. In the absence of such a notification, the petitioners contend that respondent - Gram Panchayat has no jurisdiction to levy the impugned taxes.

4. Respondent – KIADB has filed statement of objections affirming the stand taken by the petitioners. It is categorically asserted that the industrial establishments in question fall within the limits of notified industrial areas and that no notification has been issued by the State Government under Section 37 withdrawing the said area from the jurisdiction of KIADB.

5. Respondent – Gram Panchayat has filed a detailed statement of objections asserting that it is the local body providing basic civic amenities and infrastructure to the concerned industrial plots. In that context, respondent - Gra