Plea in Karnataka HC against tax on buildings shut during lockdown

The high court of Karnataka has ordered issuing notices to the state government and the BBMP over a petition on taxing property unused during the lockdown.

The petition filed by GT Cinemas Private Limited, which owns a shopping mall in the city, said municipal tax on dormant land and buildings during compulsory shutdown is not the tax on their “use”.

The petitioner contended that their shopping mall was closed for several days during the lockdown in the financial years 2019-20, 2020-21 and 2021-22. The food court and the cinema theatre that get the majority of footfall were put under extended lockdown.

The petitioner said the provisions of the BBMP Act, 2020, and the Karnataka Municipal Corporations Act, 1976, rely on the potential use of lands and buildings as the taxable event.

“The levy of a municipal tax on that property even for the period of the lockdown would be a tax that is essentially confiscatory in nature as the return from that property during the period of the lockdown would have halted completely,” the petition said, adding that the petitioner would still incur numerous charges and expenses even when the shopping mall was shuttered during the lockdown.

The petitioner had sought an interim relief restraining the BBMP from taking any coercive action in respect of the liability towards the payment of property tax. Justice M Nagaprasanna gave liberty to the petitioners to move the matter in the event the BBMP would take any coercive action.