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Local authority has no power to collect taxes from establishments in industrial areas under KIADB, says Karnataka High Court

Local authority has no power to collect taxes from establishments in industrial areas under KIADB, says Karnataka High Court

The Hindua day ago
The High Court of Karnataka has said gram panchayats have no power in law to levy or collect taxes from industrial establishments located within the industrial areas notified and developed by the Karnataka Industrial Areas Development Board (KIADB) under the provisions of the Karnataka Industrial Areas Development (KIAD) Act, 1966.
'The power to regulate and approve development activities, including the right to levy and collect tax within such industrial estates, vests exclusively with the KIADB. The gram panchayat cannot usurp such authority in the absence of a specific statutory conferment,' the court said.
Justice Sachin Shankar Magadum passed the order while allowing the petitions filed by Kalpatharu Breweries and Distilleries Pvt. Ltd. and several other industrial establishments situated in Sompura industrial area of Nelamangala near Bengaluru. The petitioners had questioned the notices issued by the Sompura Grama Panchayat asking them to pay property tax.
Jurisdiction issue
The court said the local authorities get jurisdiction over industrial areas only when the government issues a notification under Section 37 of the KIAD Act transferring the industrial areas from the control of the KIADB to the local authorities concerned.
'Until such notification is issued, the jurisdiction of the KIADB remains intact and exclusive. Further, Section 47 of the KIAD Act gives overriding effect to the provisions of the Act over any other law that is inconsistent with its provisions. The statutory scheme therefore leaves no room for implied or incidental exercise of jurisdiction by any local authority, including gram panchayats,' the court said, while setting aside notices issued by the gram panchayat to the industrial establishments.
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