SHC reserves judgment on petitions against MUCT collection through KE bills

The Sindh High Court on Wednesday reserved its judgment on petitions pertaining to the collection of municipal utility charges and taxes of the Karachi Metropolitan Corporation (KMC) through the KE bills from the citizens.

Petitioners Syed Najeebuddin Ahmed, then 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.

The petitioners had questioned the viability of collection of utility taxes through the electricity bills and requested the high court to declare the impugned action of the KMC as unlawful. Concluding the arguments, JI’s counsel Usman Farooq submitted that the KMC was not getting any benefit from such an agreement and it also had outstanding dues of Rs1 billion and 560 million. He submitted that impugned agreement was made only to benefit the KE.

The counsel submitted that the consumer has no availability to contest the bill and all powers have been vested in the KE instead of the KMC in case of any dispute. A division bench headed by Justice Salahuddin Panhwar inquired whether the KMC had power to outsource the collection of its utility charges. The counsel for the KE submitted that the KMC had the authority to outsource collection of its utility taxes under the local government law.

The court observed that city councils should be strengthened and all major decisions should be decided in the councils. The provincial law officer submitted that the city council had granted approval to the agreement for the collection of charges through the KE. He submitted that the petitioners did not impugn the rules of local government which authorize the city government to make an agreement for the collection of taxes.

Mayor Murtaza Wahab said the people of Karachi will be beneficiary of the agreement and assured the court that the agreement will be produced before the city council for debate and approval.

The KMC also filed a statement submitting that it would review its agreement with the KE to ensure that service charges were directly deductible by the KE and no other deduction would be made directly.

The KMC also stated that the mayor would constitute a special committee of the city council to deliberate on the issue and the same would be presented to the council for approval. The KMC said that further deliberation would also be made to maximize the tax collection for Karachi; however, some exemption would be given to citizens receiving the KE bill of Rs10,000 or less per month.

The court inquired the provincial law officer why the commercial and residential consumers were not being treated separately. The mayor submitted that the KMC has reduced the tax from Rs500 to Rs200 and now Rs50 to Rs200 MUCT will be collected from citizens. He assured that all details of collections will be uploaded on the website and there will be transparency in the process. He submitted that Section 100 of the Sindh local government law deals with powers of the KMC for the collection of taxes in the prescribed manner by the persons authorised for such collections.

The court inquired whether the KE is ensuring that it will not take action in case of the non-payment of MUCT. The KE counsel submitted that the power utility is bound to act under the Nepra law and he could not make any assurance in this regard. The court after hearing the arguments of the counsel reserved the order on petitions.