The Government shall prepare and maintain a code to be known as the Municipal Account Code containing all the financing matters, and the procedure relating thereto in respect of the Municipalities.
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106. Financial statement,-
(1) The Chief Officer of a Municipality shall, within three months of the close of a year, cause to be prepared a financial statement for the preceding year in respect of the accounts of the Municipality.
(2) The form of the financial statement and the manner in which the financial statement shall be prepared, shall be such as may be prescribed.
107. Balance Sheet,—
(1) The Chief Officer of a Municipality shall, within three months of the close of a year, cause to be prepared a balance sheet of the assets and liabilities of the Municipality for the preceding year.
(2) The form of the balance sheet and the manner in which the balance sheet shall be prepared, shall be such, as may be prescribed.
108.Submission of financial statement and balance sheet to the Audit Authority,— The financial statement prepared under section 106 and the balance sheet of the assets and liabilities prepared under section 107 shall be placed by the Chief Officer of the Municipality before the Municipal Council or the Town Council.
Who after examination of the same, shall adopt and remit these within one month to the Audit Authority provided in section 109.
109. Audit Authority:
(1) The audit of the accounts of the Municipality, including the- accounts of the special funds, if any, shall be conducted by the audit authority in such manner as the Government in the Finance Department, may prescribe in consultation with the department of Local Government.
(2) The Authority may-
(a) Require, by written notice, the production before it or before any officer subordinate to it of any document, which the Audit Authority considers necessary for the proper conduct of the audit,
(b) Require, by written notice, any person accountable for and having custody and control of any document, cash or article or to appear in person before such authority.
(c) require any person so appearing before it or such officer to make or 293 sign a declaration with respect to such documents, cash or article or to answer any question and to prepare and submit any statement, and
(d) cause physical verification of cash and of any stock of articles in the course of examination of accounts.
(3) The Chief Officer of the Municipality, shall comply with such requisitions ofthe Audit Authority, as may be made under sub-section (2)
110. Audit Report:
(1) As soon as practicable after the completion of audit of the accounts of the municipality, but not later than the thirtieth day of September each year, the Audit Authority shall prepare a report of the account audited and examined and shall send such report to the Chief Officer of the Municipality.
(2) The Audit Authority shall include in such report a statement showing,—
(a) Every payment, which appears to the Audit Authority to be contrary to law;
(b) The account of any deficiency of loss, which appears to have been caused by gross negligence or misconduct of any person;
(c) The account of any sum received which ought to have been, but has not been brought into account by any person; and
(d) Any other material impropriety or irregularity, which may be observed in the accounts.
111. Placing of audited accounts before the Municipality,—
(1) The Chief Officer of a Municipality shall place the audited financial statement, the balance sheet and the report of the Audit Authority and comments thereon, before the Municipality before the thirty-first day December every year for its consideration and its adoption at a special meeting.
(2) The Chief Officer shall remedy any defect that has been pointed out by the Audit Authority in its report.
112. Audited accounts to be submitted;—
(1) The Chief Officer of the Municipality, shall, after adoption of the financial statement and the balance sheet and the report of the Audit Authority, forward the same to the Government together with a report of 294 the action taken thereon by the Municipality and shall also send copies thereof to the Audit Authority.
(2) If there is any difference of opinion between the Audit Authority and the Municipality or if the Municipality does not remedy the defects or irregularities pointed out in the report of the Audit Authority within a reasonable period, the Audit Authority shall refer the matter to the Government whose decision shall be final and binding.
113. Special Audit:
In addition to the audit of accounts under section 109 the Government may, if it thinks fit, appoint a person having prescribed qualifications to conduct a special audit pertaining to any specified item or series of items requiring thorough examination and the provisions of this Chapter relating to audit shall, mutatis- mutandis, apply to such special audit.
Chapter -V Municipal Property
114. Power to acquire and hold property:
Every Municipality shall, for the purpose of this Act, have power to acquire, by gift, purchase or otherwise, and hold, movable and immovable property or any interest therein, whether within or outside limits of the municipal area.
115. Vesting of property;—
(1) Notwithstanding anything contained in any other law for the time being in force, the movable and immovable properties of the following categories within the limit of the municipal area of a Municipality shall, unless the Government, by notification, otherwise directs, vest in the Municipality constituted for such area, namely:-
(a) All public and common lands not belonging to any Government Department or statutory body or corporation;
(b) All public tanks, streams, reservoirs and wells;
(c) All public markets and slaughter house;
(d) All public sewers and drains, channels, tunnels, culverts and water courses in, alongside or under any street.
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(e) All public streets and pavements including street parking areas, stones and other material thereof and also trees on public streets or pavement not belonging to any private individual;
(f) All public parks and gardens, including squares and public open spaces;
(g) All public ghats on rivers or streams or tanks;
(h) All public lamps, lamp-posts and apparatus connected with or appertaining thereto;
(1) All public places for disposal of the dead excluding those governed by any specific law in this behalf.
(j) All land or other properties transferred to the Municipality by the Government or acquired by gift, purchase or otherwise for public purposes;
(k) Al solid and liquid wastes collected or lying on a public street or public place, including dead animals and birds; and
(1) All stray animals not belonging to any private individual.
(2) Where any area is included in a municipal area all movable and immovable properties in such area, of the categories mentioned in subsection (1) shall vest in the Municipality constituted for such Municipal area.
(3) When any immovable property is transferred otherwise than by sale by the Government to a Municipality for public purposes, it shall be deemed to be a condition of such transfer, unless specially provided to the contrary, that should the property be at any time resumed by the Government, the compensation payable therefor shall notwithstanding anything to the contrary contained in the Nagaland Land (Requisition and Acquisition) Act, 1965 (3 of 1965), inno case exceed the amount, if any, paid to the Government for the transfer together with the cost or the present value whichever shall be less, of any buildings erected or other works executed on the land by the Municipality.
(4) The management, control and administration of every public institution maintained out of the Municipal fund shall vest in the Municipality.
(5) When any public institution has been placed under the direction, management and control of the Municipality, all properties, endowment and funds belonging thereto, shall be held by the Municipality in trust for the purpose to which such properties, endowments and funds were lawfully applicable at the time when the institution was so place.
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Provided that the extend of the independent authority of the Municipality in respect of such institution may be such, as may be prescribed.
116. Acquisition of immovable property by agreement;— If a Municipality desires to acquire any immovable property for the purposes of the Act, such property may, if so directed by the Municipality, be acquired by agreement by the Chief Officer, on behalf of the Municipality on such terms and at such prices, as maybe approved by the Municipality:
Provided that the negotiation for the purpose of such agreement shall be made jointly:- By the Chairperson, the Chief Officer of a Municipal Council or a Town Council and the Officer of Local Government And prior approval of the Government shall be obtained before the making of such agreement.
117.Acquisition where immovable property cannot be acquired by agreement;— Whenever the Municipality is unable to acquire any immovable property under section 116 by agreement, the Government may at the request of the Municipality, acquire the same under the provisions of the Nagaland Land (requisition and Acquisition) Act, 1965 (Act 3 of 1965) and on payment by the Municipality of the compensation awarded under that Act and of the charges incurred by the Government in connection with the procedure related thereto, the land shall vest in the Municipality.
118. Disposal of property;—
(1) With respect to the disposal of property, movable and immovable, belonging to the Municipality, the provisions of sub-section (2) and subsection (3) shall have effect,
(2) The Municipality may,
(a) Dispose of, by sale or otherwise, any movable property belonging to the Municipality; and
(b) With the prior approval of the Government, sell, mortgage, gift or grant a lease of any immovable property belonging to the Municipality.
Provided that no such prior approval of the Government shall be necessary in the case of a lease by public auction of any immovable property for a period of five years.
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(3) The procedure for sale, mortgage or gift, the procedure for granting any lease and the terms and conditions of lease under this section, shall be such as may be prescribed.
119. Registers of immovable and movable properties;—
(1) The Chief Officer of a Municipality shall maintain in such manner and in such form, as may be prescribed;—
(a) A register and a map of all the immovable properties of which the Municipality is the proprietor or which vest in it, or which the Municipality holds in trust for the Government; and
(b) A register of all movable properties belonging to the Municipality.
(2) The Chief Officer shall cause to be prepared every year a statement in respect of changes, if any, made in the register of immovable properties specified in sub-section (1) during the preceding year and enclose the statement with the budget estimate prepared under section 101.
Part -IV Municipal Taxation Chapter --I Levy of taxes and fees by Municipalities
120. Power to impose Taxes:
(I) Subject to the provisions of this Act and the rules made thereunder, with the previous sanction of the government, a municipality may, in order to raise revenue for it's duties and performing its functions under this Act, levy within it's limits of municipality the following taxes, fees and tolls or any of them—
(a) Atax on lands and buildings,
(b) An octroi
(c) Tolls and fees,
(d) a scavenging tax
(d) a tax on advertisement other than advertisement published in newspapers, 298
(f) a show tax,
(f) a fire tax,
(h) a tax on the vehicles and animals.
(2) Subject to the prior sanction of the Government, a municipality may, for raising revenue for discharging its duties and performing its functions under this Act, levy another tax which the State Legislature has power to levy under the Constitution of India.
Save as otherwise provided in this Part, the taxes specified in subsection (1) and the taxes which may be levied under sub-section (2), shall be levied at such rates as may, from time to time, be specified by the Government, by notification, and shall be assessed and collected in accordance with the provisions of this Act and the rules and regulations made thereunder.
(4) The Government may, by general or special order, direct a Municipality to levy any tax referred in to sub-section (1) if not already levied, at such rate and within such period, as may be specified in the order and the Municipality shall thereupon act accordingly.
(5) If the municipality fails to carry out any order referred to in sub-section
(4), the Government may, by an order published in the Official gazette, levy the tax at such rate as maybe specified in the order, and the order so passed, shall operate as if the tax has been levied by Municipality under sub-section (1) or sub-section (2), as the case may be.
121. Procedure to impose tax: V -
(1) The Municipality may, at a special meeting pass a resolution to propose the imposition of any tax under section 120.
(2) When such resolution has been passed, the Municipality shall publish a notice, definition the class of persons or description of property proposed to be taxed, the amount or rate of the tax to be imposed, and the system of assessment to be adopted.
(3) Any inhabitant objecting to the proposed tax may, within thirty days from the date of publication of the said notice, submit his objection in writing to the Municipality and the Municipality shall at a special meeting, take his objection into consideration.
(4) If the Municipality decides to amend its proposals or any of them, it shall publish the amended proposals along with a notice indicating that they are modifications of those previously published for objection.
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(5) Any objection, which may within thirty days, be received to the amended proposals, shall be dealt with in the manner specified in subsection (3).
(6) When the Municipality has finally settled its proposals, it shall forward a copy of the proposals to the Government.
(7) The Government may, on receiving the proposals under sub-section (6), sanction or refuse to sanction the same or return them to the Municipality for further consideration.
(8) When a proposal has been sanctioned under sub-section (7), the Government shall notify the imposition of tax in accordance with such proposal and shall in the notification specify a date not being less than thirty days from the date of the notification on which the tax shall come into force.
(9) A tax leviable by the year, shall come into force on the first day of January, or on the first day of April, or or the first day of July, or on the first day of October, in any year, and if it comes into force on any day other than the first day of the year by which it is leviable, it shall be leviable by th quarter till the first day of such year, then next ensuing.
(10) A notification of the imposition of a tax under this Act shall be conclusive evidence that the tax has been imposed in accordance with the provisions of this Act.
122. Constitution of Finance commission
(1) The governor shall constitute a Finance Commission to review the financial position of the Municipalities and make recommendations to the Governor as to—
(a) the principles which should govern,-
(1) The distribution between the state and the municipalities of the net proceeds of the taxes, duties tools and fees leviable by the State, which may be divided between them
(ii) The determination of taxes, duties, tolls and fees which may be assigned to, or appropriate by the municipalities,
(iii) The grants-in-aid to the Municipalities from the consolidated fund of the State,
(b) The measures needed to improve the financial position of the Municipalities, 300
(c) Any other matter referred to the Finance Commission by the Government in the interests of sound finance of the Municipalities.
(2) The Finance commission shall be composed of one or more persons to be appointed by the Governor in accordance with the procedure that may be prescribed in this behalf.
(3) The conditions of service and tenure of the Finance Commission shall be as such as the Governor may by rules prescribe.
(4) The Finance commission shall determine their procedure and shall have such powers in the performance as provided in this Act and as may be further directed by the Government.
(5) the Governor shall cause every recommendation made by the Finance Commission under this section together with and explanatory memorandum as to the action taken thereon to be laid before the State Legislative Assembly.
Chapter - II Tax on Lands and Buildings
123. Rate of tax on lands and buildings:
(1) The tax on lands and buildings shall be levied on the annual value thereof as determined under this Chapter.
Provided that with previous sanction of the State Government the rate of tax on land s and buildings may also be levied on an assessment other that the annual value with due regard to the location of the lands and buildings, floorage and other relevant factors.
(2) The rate of tax on lands and buildings shall be deteiiiiined by Government, by notification, and for different municipalities different rates may be determined for different categories of lands or buildings:
Provided that the rate of tax shall not exceed fifteen percent of the annual value of such lands or buildings:
(3) In calculating the gross amount of the tax that may be levied on lands and buildings per annum, and the, net amount payable per annum after allowing rebate under sub-section (2) of section 183, the fraction of a rupee shall be rounded off to the nearest rupee, fifty paise being treated as rupee one.
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(4) Where a portion of any land or building, is used for commercial, industrial or such other non-residentil purposes, as the municipality may determine, or where a tax is levied on commercial establishments in a multistoried building, the amount of tax in respect of such portion shall, while fixing the amount for tax for the entire lands or building, be separately assessed.
124. Exemption from tax on lands and buildings.
(1) Notwithstanding anything contained in this Chapter,-
(a) Lands and buildings belonging to diplomatic and consular missions of foreign states.
(a) Lands and buildings actually used for cremation and burial; and
(c) Public playgrounds, parks and gardens.
Shall be exempt from the tax on lands and buildings.
(2) Notwithstanding anything contained in this Chapter, lands and buildings, which are the properties of the union, shall be exempt from the property tax.
Provided that nothing in this sub-section, shall prevent the Municipality from levying on such lands and buildings a tax to which immediately before the commencement of this Act, they were treated as liable.
Provided further that the Municipality may levy service charge on such buildings on the basis of such annual value and at such rates, as may be determined by the Central Government.
125. Determination of annual valuation:
(1) For the purpose of assessment of tax on any lands and buildings, whether residential or non-residential, self-occuppied or tenanted, the annual value of such lands and building shall be such percentage of the sum obtained by adding the present market value of land and the estimated cost of erecting the building, as the Government may, by notification, determine:
Provided that the annual value shall not exceed ten percent of the sum so obtained:
Provided further that for different municipalities different percentage may be determined for different categories of lands and buildings.
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(2) The annual value of the building so determined shall be subject to a deduction of ten percent for the cost of repairs and other expenses necessary for the proper maintenance of the building.
(3) In the case of any land which is being used by erecting tents, temporary structures or structures, partially temporary for the purpose of accommodating marriage parties, circus shows or for any entertainment purpose or such other purpose, as may be specified in this behalf by the Municipality with the previous sanction of the Government, the annual value shall be ten percent of the market value of the land.
(4) In the case of any land on which no buildings has been erected, but on which a building can be erected, and on any land on which a building is in the process of erection, the annual value shall be fixed at five percent of the estimated market value of the land.
(5) The basis for assessing the present market value of the land and the cost of erecting the machinery thereon.
(6) In the calculation of the annual value of any premises, no account shall be taken of the machinery thereon.
(7) The annual value as determined under this section, shall be rounded off to the nearest ten rupee.
126. Municipal assessment code:
(1) The Government may, by rules, provide for the detailed procedure for the determination of the annual value of lands or buildings in the municipal areas and for other matters connected therewith, and such rules together with any regulation made under this Act, shall constitute the Municipal Assessment Code.
(2) Under the rules as aforesaid:-
(a) Every building together with the site and the land appurtenant thereto shall be assessed as a single unit;
(b) All lands or buildings to the extend these are contiguous or are within the same cartilage or are on the same foundation and are owned by the same owner or co-owners as an undivided property, shall be treated as one unit for the purpose of assessment under this Act:
Provided that is such land or building is sub-divided into separate portions which are not entirely independent and capable of separate enjoyment, the Chief Officer of the Municipality may, on 303 an application from the owners or co-owners according to the value of their respective portions treating the entire land or buildings as a single unit;
(c) All lands and buildings within the same enclosure and owned by the same owner as undivided property, shall be treated as one unit for the purpose of assessment under this Act;
(d) Each residential unit with its percentage of the undivided interest in the common areas and facilities constructed or purchased and owned by or under the control of any housing co-operative society, registered under the law for the time being in force in the State, shall be assessed separately;
(3) If the ownership of any land or building or a portion thereof is subdivided into separate shares or if more then one land or building or portions thereof by amalgamation, come under one ownership, the Chief Officer, may, on an application from the owners or co-owners, separate or amalgamate, as the case may be, such lands or buildings or portions thereof so as to ensure conformity with the provisions of this section.
(4) A newly constructed non-residential building shall become assessable from the year of the issue of the completion certificate under the provisions of this Act:
Provided that is such building is occupied before the issue of the completion certificate in contravention of the provisions of this Act, such building shall be liable for assessment from the year of its occupation.