The Sindh High Court (SHC) has barred K Electric from collecting Municipal Utility Charges and Taxes (MUCT) from Karachi Metropolitan Corporation from consumers until the next court hearing.

During the hearing of a petition challenging the collection of MUCT by the Karachi Metropolitan Corporation (KMC) through KE bills, Karachi Administrator Murtaza Wahab argued that no new tax was imposed by the metropolitan corporation while third party services had been taken in regards to municipal tax collection in the past as well.

According to the administrator, a contract was made with KE after KMC failed to collect municipal taxes in a fair and transparent manner.

According to the written order of the High Court of Sindh, the provincial government already collects property and motor vehicle taxes from the citizens of Karachi and it needs to be determined what jurisdiction KMC has to collect taxes.

The Karachi admin asked for time to answer the question. The written order stated that until the next hearing, KE would not collect MUCT from its customers. The court adjourned the hearing to October 10.

Earlier, a two-member bench headed by Judge Syed Hasan Azhar Rizvi held a hearing on attorney Syed Najibuddin’s plea against collecting municipal tax on electricity bills. Karachi Administrator Murtaza Wahab appeared in court in his personal capacity.

The court asked if this was the same tax that KE was supposed to collect. The court in its remarks said the city saw no cleanliness. The court asked why municipal taxes were imposed on electricity bills when KMC had its own collection unit for collecting taxes. If the KMC tax is not paid, KE consumers could be disconnected, Judge Rizvi said in his remarks.

The court questioned why only K Electric was left for collection, to which Wahab said KMC tried to collect the taxes on its own but was unsuccessful. Judge Syed Hasan Azhar Rizvi investigated further to determine the legal status of the tax. Murtaza Wahab presented the details of the 2008 district council approval and said it was wrongly perceived that KMC collects its taxes through a third party. Also in 2017, KMC awarded the tax collection contract to a private party, he said, adding that KMC passed a resolution to reduce the tax amount from Rs 200 to Rs 50.

The plaintiff’s lawyer, Arif Shaikh Advocate, said that although the KMC administrator claims that the amount is only Rs 50, it will increase unit by unit.

The court noted what services will be provided against funds collected from the levy, to which Wahab said KMC would maintain the roads, parks and trails. The court asked if the citizens would get these facilities with their own money, as it was the job of the provincial government to provide the basic facilities.

Judge Hasan Azhar Rizvi noted that the city’s roads are broken while parks are destroyed. There is no public lighting as thefts increase.

Wahab pleaded with the court not to impose a stay and to give him a day to answer questions. The plaintiff’s lawyer, Arif Shaikh Advocate, in an informal conversation, said that our request was to rescind the notification that KMC’s charges were being collected by KMC. He said the court had issued an injunction. He said that through KMC’s decision, people faced electricity disconnection if municipal charges were not paid through K Electric’s bills.

Published in The Express Tribune, September 27e2022.