Karnataka HC: Poultry Farming Not a Commercial Activity

The Karnataka High Court recently ruled out that since poultry farming is an agricultural activity, it cannot be termed as "commercial" allowing the gram panchayats to levy any kind of tax under the Karnataka Gram Swaraj and Panchayat Raj Act.

Justice Suraj Govindaraj has pointed out that a poultry farm is an agricultural activity and does not require land to be converted for any commercial purpose.

K Narasimhamurthy, Petitioner

Petitioner K Narasimhamurthy, who owns four acres of land in Nagasandra village, had approached the gram panchayat in order to seek NOC to obtain an electricity connection for the building that is constructed in a portion of the property where he had planned to do poultry farming.

However, the gram panchayat authorities asked for Rs 1.3 lakhs for issuing NOC on the grounds that he would have to pay taxes on the property as it would be referred to as an industry.

Since Narasimhamurthy was left with no other option, he paid Rs 59,551. But, later when he realized that the village panchayat had no authority, he decided to approach the High Court claiming that poultry farming is an agricultural activity.

On the other hand, the government argued that poultry farming is a commercial activity and under Cause A(ii) of Schedule IV, it attracts tax. But, after taking into consideration the provisions of the 1993 Act, Justice Suraj Govindaraj noted that Schedule IV does not contain any categorization of poultry farms that allows the panchayats to levy taxes.