BENGALURU: Poultry-farming is an agricultural activity and cannot be termed "commercial" entitling the gram panchayat to levy any tax under Karnataka Gram Swaraj and Panchayat Raj Act, the Karnataka HC ruled recently.
Justice Suraj Govindaraj has pointed out that in E Bhaskar Rao's case , the high court had observed that a poultry farm is an agricultural activity and does not require land to be converted to a commercial purpose for putting up a construction for such business.
"If that be so, a building put up on an agricultural land cannot be said to be a commercial building coming under Clause A(ii) of Schedule IV of the Act. The land continues to be an agricultural land and the poultry-farm activity cannot be said to be a commercial activity entitling the panchayat to levy any tax let alone under the said provisions," the judge further said, directing the Sondekoppa gram panchayat in Bengaluru North taluk to refund Rs 59,551 collected from petitioner K Narasimhamurthy.
The petitioner, who owns four acres of land in Nagasandra village, had approached the gram panchayat, seeking NOC for getting an electricity connection to the building constructed in a portion of the property wherein he intended to do poultry farming.
However, the panchayat authorities demanded Rs 1.3 lakh for issuing NOC on the ground he would be liable to pay taxes on the property as the same would be an industry. Without any option, Narasimhamurthy paid Rs 59,551 and later when he realised the village panchayat had no jurisdiction, he approached the high court, contending that both dairy farming and poultry farming are agricultural activities.
On the other hand, the government advocate argued that running of a poultry farm is a commercial activity and, as such, poultry farm is a commercial building in terms of Clause A(ii) of Schedule IV attracts tax.
However, after considering the provisions of the 1993 Act, Justice Suraj Govindaraj noted that Schedule IV does not contain any other classification of a poultry farm entitling the panchayat to levy any tax. "In that view of the matter, a poultry farm being run on an agricultural land not being a commercial activity, the panchayat would not have any power to levy tax in terms of Schedule IV read with Section 199 of the Act," the judge said, quashing the demand notice dated September 20, 2013, issued by Sondekoppa gram panchayat.
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