Karnataka HC stays BBMP tax notices to pvt firm

Bengaluru: The Karnataka High Court has issued an interim stay order on multiple demand notices issued by the Bruhat Bengaluru Mahanagara Palike (BBMP) against Gopalan Enterprises.

Justice S Sunil Dutt Yadav noted that the BBMP chief commissioner must acknowledge that the requirement for a 50% payment does not arise until an order is passed under Section 144(15)(e) of the BBMP Act.

Gopalan Enterprises contested demand notices dated October 31, 2023, which requested payment of Rs 19.69 crore in differential property tax along with penalties and interest from 2008-09 to 2022-23.

A second notice was issued on January 22, 2024, and demanded Rs 29.54 crore for the same period, and a third notice followed on February 15, 2024, serving as a reminder for the payment of the differential property tax.

The petitioner argued that the joint commissioner had previously assessed the property tax and set the rate through an order dated March 20, 2015. The petitioner contended that there were no grounds provided for the reassessment of the property tax fixed on March 20, 2015, which, according to the petitioner, is time-barred as reassessment cannot occur more than five years after filing tax returns.

Moreover, it was asserted that the principles of natural justice were not followed, and as per Section 144(15)(c) of the BBMP Act, a minimum period of 30 days should have been granted by the BBMP.

In granting the interim order, the court noted that the insistence on a 50 per cent deposit, as per the standard operating procedure (SOP), is observed in numerous cases.

"The court has observed in this matter as well as in other matters that prima facie,  in light of Section 144 (15)(e), 50 per cent has to be deposited at the stage of appeal and such insistence, even at the stage of considering the reply before order under Section 144 (15)(e), does not arise. Such action has to be taken note of appropriately,” Justice Yadav said.