Can property tax be levied against laws?

Mysore Grahakara Parishath files case against Mysore City Corporation against property taxes being collected from property owners in city. - source: http://www.starofmysore.com - cut and paste of news item for info of Praja and further possible n/a with regard to their properties in BBMP areas:

PROPERTY TAX: MGP FILES CASE AGAINST MCC

By Sreemathi Hariprasad, MGP

Mysore Grahakara Parishat (MGP) has filed a case for permanent injunction restraining the Mysore City Corporation (MCC) from levying taxes not permitted under Karnataka Municipal Corporations (KMC) Act, 1976. The case 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 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 cannot levy any tax other than those enumerated therein:

a) a tax on buildings or vacant land or both , that is, 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 RTI Act, 2005 asking MCC the provisions of KMC Act under which taxes 1-4 are levied. In its reply, MCC did not quote any Cections of the Act. Instead it said that they are levied on the basis of various govet. orders. Since no Section of Act gives MCC powers to levy these taxes and since govt. orders cannot 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 cannot give MCC powers not expressly given by the Act, allowing depreciation in 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 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.