A Texas appellate-court ruling that a newly built Sikh temple near Austin must be razed or moved has sparked an international outcry from members of the religious group, some of whom claim discrimination is at the heart of the case.

The dispute began when a couple in the neighborhood filed a lawsuit on the grounds that the temple violated the subdivision's rules restricting construction to single-family dwellings.

A Challenge at the Temple More photos and interactive graphics

The couple, John and Leslie Bollier, say it isn't about religion, but rather the construction of a building that could bring down property values in a residential neighborhood. The Bolliers' newly constructed home has a taxable valuation of more than $600,000, according to public records. Sikh organization Austin Gurdwara Sahib said it cost $350,000 to build the temple, and it paid $100,000 for the land.

"There is a great amount of grief that a religious house of worship is being destroyed," said Amardeep Singh, director of programs at the National Sikh Coalition, a civil-rights organization.

Sikhism is the world's fifth-largest religion, and Mr. Singh estimated that about 500,000 Sikhs live in the U.S. Established 500 years ago, Sikhism is a monotheistic religion that stresses the importance of a leading a good moral life. Many adherents wear turbans and uncut hair.

While disputes over buildings between municipal officials and religious groups are common, this case is unusual in that zoning laws aren't an issue. And most property suits don't persist after construction has been completed.

The temple was built to replace a mobile home that the congregation of about 60 families in central Texas had been using as a place of worship since 2003. Construction was completed in April and has been used by congregation ever since.

The group purchased the 2.75-acre property where the new temple sits in 2003 in a subdivision of the Austin suburb of Bee Cave and set up the makeshift temple in the 1,200-square-foot mobile home, which was already on the property.

Sukhchain Singh carries a book of Sikh scripture back to its resting place after a service Aug. 8. Julia Robinson for The Wall Street Journal

Two years later, the congregation started plans to build a temple on the property and obtained all necessary permits from the city, said Harnek Bains, president of the Austin congregation. He said his group was unaware of the subdivision's restricting covenants stating that only single-family dwellings can be built on the lot and that they must be used as housing.

Bee Cave officials say the temple meets zoning laws for that area, and it doesn't enforce private residency restrictions. Only property owners that are subject to the covenants can file suit to enforce the rules.

Mr. Bains said the congregation faced no opposition until 2008, when the Bolliers moved into the neighborhood and filed suit while the temple was under construction.

"We were shocked and stunned," Mr Bains said. "We were not expecting a lawsuit from any person we did not know, a person we had not met—a person we had never even heard a complaint from whatsoever."

The Bolliers said in a statement: "We did not bring this suit until AGS violated the single-family dwelling restriction by beginning construction of a large, pre-fabricated aluminum commercial building on its lot."

Nell Penridge, former president of the subdivision's neighborhood association, said she wasn't aware of the rule until the court case. "You would be hard-pressed to know there are deed restrictions because there are so many violations of them everywhere that have gone without consequence," she said.

The trial-court judge sided with the Sikh group in March 2009, saying while it was in violation of the subdivision's covenants, the Bolliers were barred from seeking court action on use of the property in large part due to the expiration of a statute of limitations that requires citizens to file suit within four years of an alleged violation.

Once the trial decision was made, the congregation resumed the temple's construction, which had been halted voluntarily.

The Bolliers appealed, arguing that the statute of limitations for the structure should have started when the construction of the new temple began, not when the Sikh congregation began praying in the mobile home—a structure that, despite its use, was intended as a residence.

Then, on July 9, the Texas's Third Court of Appeals sided with the Bolliers. The Sikhs can worship in the mobile home, which is still on the property—and in the new temple pending their request for a reconsideration of the court ruling.

The potential razing of the temple has spurred outrage in the community, and international Sikh organizations and publications have written about the legal battle.

"Though this is a civil-rights issue from our perspective, in the courts it has been framed as a property issue," said Mr. Singh of the National Sikh Coalition.

Mr. Bains's son, Yadvindera Bains, an Austin-area doctor, started a website called Save the Austin Gurudwara. "When you eliminate all logical opposition, what you always come down to is that this isn't a rational objection. Whether you want to call it racism or not, you wonder what [their] motivations are for pursuing such lawsuits," he said.

The younger Mr. Bains links to various rap videos created by young Sikhs and asks for donations to help cover legal costs for the congregation. One song by Young Fateh, a Canadian, raps, "They are trying to bulldoze the shrine, we need to fight back, it's about time."

Experts say the religion's adherents are sometimes mistaken for Muslims and can face discrimination in Western countries.

"There is good reason that they feel targeted. The post-9/11 experience of backlash is real," said Robert Tuttle, a professor of law and religion at George Washington University School of Law. "What's less clear is if that has been translated into discriminatory practices in locating their place of worship."

Bruce Bennett, the attorney who represented the Bolliers, said the Sikhs shouldn't have continued building the temple until the court case was resolved. "This was really a problem of their own making."