KARACHI: The Sindh High Court (SHC) on Monday restrained the K-Electric from collecting the controversial Municipal Utility Charges and Taxes (MUCT) through electricity bills on a petition filed by a resident in April.

A two-judge bench comprising Justice Syed Hasan Azhar Rizvi and Justice Arshad Hussain Khan restrained the power utility from recovering the MUCT till Oct 10 and directed all the parties to file their comments till the next date of hearing.

The court also directed petitioner Syed Najeebuddin, a resident of Federal B Area, to file an amended title of the petition by naming the KE instead of through its chief executive officer.

In April, Mr Najeebuddin had filed the petition against the federal, provincial and local governments over recovering a new municipal tax from residents of Karachi.

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During Monday’s hearing, Karachi Administrator Murtaza Wahab appeared and informed the bench that the MUCT had been imposed under Section 100 of the Sindh Local Government Act 2013 many years ago.

He further submitted that the recovery of the MUCT was not new, as previously the same was collected through a third party. In this regard, he referred to an agreement signed between the Karachi Metropolitan Corporation and M/s Sprint Express (Pvt) Limited.

However, Administrator Wahab maintained that since proper recovery of the MUCT had not been made, the KMC had assigned the recovery to the KE through electricity bills.

He submitted that the amount collected in respect of the MUCT shall be utilised for the development of the city.

He pleaded the court not to stop the KE from recovery of the MUCT.

Justice Rizvi observed that apparently no cleanliness work was carried out in the city.

He said that the KE could disconnect electricity of a consumer in case of non-payment of MUCT through power bills.

Justice Rizvi questioned whether the KMC had any mechanism to recover such a levy itself as angry consumers were throwing the trash in KE vehicles after the power utility was assigned the task by the KMC.

He said that the KMC should have its own recovery cell.

To a query about the utilisation of the MUCT, Mr Wahab said roads, underpasses and overhead bridges will be built with this money.

He maintained that the KMC had tried to recover the MUCT, but could not succeed.

Expressing dismay over the state of affairs in the metropolitan corporation with regard to availability of basic amenities, the bench told the administrator that if they are recovering the tax, they must provide the services too.

The judges said it was observed that the provincial government was already recovering different taxes/charges including the property tax and motor vehicle tax from the residents of Karachi.

They questioned where the money recovered in the head of these taxes was being spent? The administrator replied that the money recovered from these taxes was given to the district municipal corporations by the Sindh government.

The judges remarked that roads in the city were in a shambles, sewage system had collapsed while citizens were being robbed as there were no street lights available.

The administrator explained that the levy that was earlier charged at the rate of Rs5,000 had been reduced to Rs100.

In a thinly veiled reference to a protest organised by the Jamaat-i-Islami, the administrator said that the court might not stop the recovery of the municipal levy due to protest by a handful of people.

The judges inquired from the administrator as to what was the justification of the levy of MUCT and its collection through the KE.

The bench remarked that Karachi had been giving huge revenue to the federal and provincial governments and there would be no need of any new taxes if just 20 per cent of the amount was spent on the city.

The bench asked the administrator if the levy could be recovered through a third party. The administrator sought time to assist the court by placing on record all the material relating to the MUCT collection and its utilisation.

The bench allowed time to the administrator to assist the court on this question.

The bench told the administrator that the court might restore recovery of the MUCT if it deem appropriate once he was able to satisfy the court on its recovery mechanism.

The bench clubbed all identical petitions, including the one filed by the JI, for hearing on Oct 10.

“Till the next date of hearing, the K-Electric/respondent No. 6 is restrained from collecting amount of Municipal Utility Charges & Taxes (MUCT) KMC on behalf of the respondent No. 5/KMC through their electricity bills from their consumers,” the bench ordered.

Published in Dawn, September 27th, 2022