Karnataka HC: Poultry Farming Not a Commercial Activity
Panchayat Has No Power To Levy Tax On Poultry Farm Activity On Agricultural Land Since It Is Not Commercial In Nature: Karnataka HC
While observing that Schedule IV of the Karnataka Gram Swaraj and Panchayat Raj Act, 1993, does not contain any other classification of a poultry farm entitling the Panchayat to levy any tax, the Karnataka High Court ruled that poultry farm being run on an agricultural land not being a commercial activity but being an agricultural activity, the Panchayat would not have any power to levy any tax in terms of Schedule IV read with Section 199 of the Act. Referring to the decision of State of Karnataka, Rep by its Secretary, Revenue Department and others vs. E. Bhaskar Rao [ILR 2003 KAR 2064], a Single Judge Bench of Justice Suraj Govindaraj reiterated that a building which had been put up on an agricultural land cannot be said to be a commercial building and the poultry farm activity cannot be said to be a commercial activity entitling the Panchayat to levy any tax let alone under the provisions of the 1993 Act. Also Read – Allahabad High Court Grants Bail To Mukhtar Ansari In 2007 Gangster Act Case, Refuses To Stay Conviction Advocate V.P Kulkarni appeared for the Petitioner, whereas Advocate M. Pradeep appeared for the Respondent. The brief facts of the case were that the petitioner is the absolute owner of the agricultural land, wherein he had set up a poultry farm. With an intention to obtain electricity connection, the petitioner had approached the Karnataka Electricity Board, wherein the Board requested for a ‘No Objection Certificate’ from the Gram Panchayat to be secured and furnished. When the petitioner approached the first respondent, a demand of Rs.1,37,602/- was made on the ground that the petitioner would be liable to make payment of taxes on the property as if it is an industry which has been run therein. The petitioner at that time having no option had made a payment of sum of Rs.59,551/- but after realizing that the respondent did not have any authority to call for or demand such payment has filed the present petition challenging the said levy. Also Read – No Judicial Interference Is Warranted In Transfer Order If Same Is Neither Malafide Nor Motivated By Any Extraneous Consideration: Patna HC After considering the submission, the Bench noted that Clause A of Schedule IV of the Act deals with Tax on Buildings, which sub-classifies the Buildings into Residential Buildings and Commercial Buildings. It is in that circumstances that the Bench observed that the levy as prescribed in the Column 2 thereof has been specified, that if any building is used for residential purpose, then the levy could be made on residential basis and if the building is used for commercial purpose, then the levy could be made on commercial basis in terms of Clause A(i) and Clause A (ii) respectively. Accordingly, the High Court directed the Sondekoppa Gram Panchayat to refund the amount of Rs.59,551/- deposited by the petitioner within a period of six weeks. Cause Title: K Narasimhamurthy v. Sondekoppa Grama Panchayat and Anr. [Neutral Citation: 2023: KHC: 32164]
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CONCEPT OF INCOME TAX ON AGRICULTURE INCOME (DAIRY FARMING & POULTRY FARMING) IN INDIA
