The Sindh High Court on Thursday directed the Karachi Metropolitan Corporation to place on record the memorandum of understanding between the KMC and K-Electric with regard to the collection of municipal utility charges and taxes through power bills.
Arguing in a matter pertaining to the collection of municipal utility charges and taxes through the KE bills from the citizens, the petitioner’s counsel Tariq Mansoor submitted that the municipal tax is a separate department of the KMC and he has power to collect taxes.
He submitted that KE is a separate company, which provides electricity to the city, and it cannot be assigned the task to collect municipal taxes as the same would also be in violation of the Sindh local government laws.
A division bench headed by Justice Salahuddin Panhwar inquired the counsel how the citizen was aggrieved with the decision. The counsel submitted that the common citizen could be deprived of electricity if he refused to pay municipal utility charges.
He said the KE could also not collect municipal taxes under the National Electric and Power Regulatory Authority law.
Mayor Murtaza Wahab said the KMC had made an agreement with KE with regard to the collection of MUCT. He said such an agreement was made because it was beneficial to the KMC and the provincial electric duty of the federal government was also collected through KE.
He said the KMC had already reduced the charges from Rs500 to Rs200. The court directed the KMC counsel to place on record the MoU with regard to collection of MUCT through power bills and adjourned the hearing till April 3.
One amicus curiae, appointed by the court to assist it in the matter, had told the court that the KE may not use its coercive powers in the collection of municipal utility charges and taxes through the power bills from the citizens.
Filing his synopsis before the court, amicus curiae Munir A Malik submitted that the MUCT could not have been revised except upon previous publication of the taxation proposal and in the manner prescribed by the imposition rules.
He was of the view that the government was required to follow the contract rules and could not nominate in violation of these rules. He said the KE may not use its coercive powers to collect MUCT.
He submitted that a notification of the KMC issued on January 21, 2022 authorising the KE to collect the municipal tax was in violation of the Sindh local government contract rules. He said the power utility was not the only utility service provider in the territorial limits of Karachi as the Sui Southern Gas Company, Pakistan Telephone Corporation and other cellular companies were also utility service providers in the city.
He said there was nothing on the record to indicate that the government had directed the KMC under Section 98 of the Sindh Local Government Act to levy MUCT. The counsel added that on the contrary, it appeared to be the case that MUCT was being levied pursuant to powers conferred upon the KMC under Section 96 of the SLGA.
The amicus curiae submitted that the KMC had been collecting MUCT since 2008 and the merger of two taxes, — fire and conservancy — took effect through Resolution 364 on June 2, 2008, which approved a proposal to levy public utility charges and states that public objections would be invited and thereafter the matter would be placed before the council.
Petitioners Syed Najeebuddin Ahmed, Karachi Jamaat-e-Islami Emir Hafiz Naeemur Rehman and others had challenged the collection of fire and conservancy charges and other utility charges of the KMC through KE bills.
Then Karachi administrator Murtaza Wahab, who is now the mayor, had submitted that Section 100 of the Sindh local government law dealt with powers of the KMC for collection of taxes in the prescribed manner by the persons authorised for such collection.
The petitioners had questioned the viability of collection of utility taxes through the KE electricity bills and requested the high court to declare the impugned action of the KMC as unlawful.