The local authority of Bengaluru cannot demand upfront payment of the 50% tax differential: HC

BENGALURU: The BBMP chief commissioner cannot, the high court said, demand that 50% of the property tax that was allegedly under-assessed be paid in full upfront before issuing an order under Section 144 (15) (e) of the BBMP Act.

This was mentioned by Justice S. Sunil Dutt Yadav in his interim ruling last Friday, which froze several property tax demand notices sent to Gopalan Enterprises.

The judge noted that it was observed in numerous cases that BBMP was demanding an upfront payment of 50%, citing a standard operating procedure that the company had released.

According to Justice Yadav’s judgment, there is no basis for the demand that 50% of the arrears be paid at the time the property owner’s response is taken into consideration.

In its appeal, Gopalan Enterprises had contested a series of notices that it had received, including one dated October 31, 2023, which demanded payment of Rs 19.7 crore differential property tax, along with interest and penalties, for the years 2008–09–2022, another dated January 22, 2024, which demanded payment of Rs 29.5 crore for a similar period, and a third dated February 15, 2024, which served as a reminder to pay the differential tax.

The petitioner asserted that the rate was set by an order enacted on March 20, 2015, after the relevant joint commissioner had also assessed the property tax.

Gopalan Enterprises claims that no justification was provided for the reassessment of the fixed property tax and that the action is prohibited by statute as, by Section 144(16) of the BBMP Act, property taxes cannot be reassessed for five years following the filing of tax reports.

The petitioner further contended that the BBMP Act’s Section 144(15)(c) has given the green light to the principles of natural justice since the civic agency was required to give a minimum of 30 days.