A local body is not entitled to levy property tax from a company functioning in an industrial development area (IDA) notified by the state government, the Kerala High Court has held.
The ruling was given by justice Shaji P Chaly after considering a petition (WP-C No. 3603/2016) filed by Holmarc Opto Mechatronics Pvt Ltd, which has an industrial unit at Kalamassery IDA at HMT Industrial Estate. The company had challenged Kalamassery municipality’s demand for property tax of Rs 4.79 lakhs for its factory building at the IDA.
In the judgment, the court noted that the state government had issued an order on July 5, 1994 exempting industrial establishments functioning within the industrial area declared by the government from obtaining licences of the local bodies.
The exemption was granted to Industrial Estates, Development Area, Mini Industrial Estate and other units specified in the order. Section 450 of the Kerala Municipality Act, 1994 also exempts industrial establishments functioning in notified industrial areas from obtaining a licence from the local body, the court pointed out.
Such exemption was also granted as per section 6 of Kerala Industrial Single Window Clearance Board and Industrial Township Area Development Act, 1999, the court added.
The court the said, “Taking into account the said legal and factual aspects, I am of the undoubted opinion that when a statute exempts or grant benefits to industrial establishments located within the notified industrial areas, the local body is precluded from taking any action on the basis of the provisions of law applicable to other industrial establishments. I am also of the view that exemption is granted by the statute as well as the Government in order to promote industries within the State and to facilitate an easy mechanism for an industrialist to star the establishments without being saddled by the intricacies contained under various statutes, by resorting to the single window clearance methodology provided under Act 1999.” The court quashed the municipality’s order demanding property tax from the petitioner company.
