Bhubaneswar: In a jolt to Bhubaneswar Municipal Corporation (BMC), the Orissa High Court has set aside an order for collection of enhanced holding tax from residents of the state capital.
A notification had been issued by the BMC in 2011 to collect holding tax from the people at enhanced rate which was around 10 times higher than the old rate. Even vacant land was made taxable, sources said.
The move evoked sharp protest from people and Bhubaneswar Confederation of Citizens Associations approached the High Court stating that since the notification was issued as per the old municipal law, it cannot be applicable in case of BMC.
After preliminary hearing, the HC had dismissed the notification and asked the BMC to reconsider the matter.
However, the then BMC Commissioner P C Chaudhary in October 2019 had again issued an order for collectionof holding tax at enhanced rate.
The petitioners had again approached the High Court protesting the move. The HC had in 2021 put a stay on the BMC order to increase tax and held that any attempt to enhance holding tax ios not sustainable in law.
Delivering its final verdict in the case on Wednesday, the court set aside the order for collection of enhanced holding tax in a major relief to the residents of the state capital.
Earlier, the court had said that the holding tax cannot be enhanced till the state legislature passes a law specifically authorising the municipal corporation to levy and collect taxes.
The BMC had admittedly raised the holding tax by following the procedure envisaged under the Orissa Municipal (OM) Act, 1950 for enhancing the rate of holding tax in the light of the transitional provision contained in the Orissa Municipal Corporation (OMC) Act, 2003, sources said.
