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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M. NAGAPRASANNA, J.
MR. SUNDERAM SHETTY - PETITIONERS
Vs.
STATE OF KARNATAKA REPRESENTED BY ITS SECRETARY URBAN DEVELOPMENT DEPARTMENT - RESPONDENTS
WRIT PETITION No.4601/2020 (LB – BMP) C/W. WRIT PETITION No.55442/2015 (LB – BMP) WRIT PETITION No.55944/2015 (LB – BMP) WRIT PETITION No.55945/2015 (LB – BMP) WRIT PETITION No.57443/2015 (LB – BMP) WRIT PETITION No.57920/2015 (LB – BMP) WRIT PETITION No.7538/2016 (LB – BMP) WRIT PETITION No.10164/2016 (LB – BMP) WRIT PETITION No.12535/2016 (LB – BMP) WRIT PETITION No.52014/2016 (LB – BMP) WRIT PETITION No.8204/2017 (LB – BMP) WRIT PETITION No.11065/2017 (LB – BMP) WRIT PETITION No.12656/2017 (LB – BMP) WRIT PETITION No.13588/2017 (LB – BMP) WRIT PETITION No.14530/2017 (LB – BMP) WRIT PETITION No.16461/2017 (LB – BMP) WRIT PETITION No.17164/2017 (LB – BMP) WRIT PETITION No.17436/2017 (LB – BMP) WRIT PETITION No.37473/2017 (LB – BMP) WRIT PETITION No.38743/2017 (LB – BMP) WRIT PETITION No.47077/2017 (LB – BMP) WRIT PETITION No.58170/2017 (LB – BMP) WRIT PETITION No.6381/2018 (LB – BMP) WRIT PETITION No.9028/2018 (LB – BMP) WRIT PETITION No.9581/2018 (LB – BMP) WRIT PETITION No.11868/2018 (LB – BMP) WRIT PETITION No.12522/2018 (LB – BMP) WRIT PETITION No.13143/2018 (LB – BMP) WRIT PETITION No.13465/2018 (LB – BMP) WRIT PETITION No.14265/2018 (LB – BMP) WRIT PETITION No.14307/2018 (LB – BMP) WRIT PETITION No.16282/2018 (LB – BMP) WRIT PETITION No.16990/2018 (LB – BMP) WRIT PETITION No.17048/2018 (LB – BMP) WRIT PETITION No.17262/2018 (LB – BMP) WRIT PETITION No.17350/2018 (LB – BMP) WRIT PETITION No.17352/2018 (LB – BMP) WRIT PETITION No.17356/2018 (LB – BMP) WRIT PETITION No.18297/2018 (LB – BMP) WRIT PETITION No.18530/2018 (LB – BMP) WRIT PETITION No.23726/2018 (LB – TAX) WRIT PETITION No.25545/2018 (LB – BMP) WRIT PETITION No.25850/2018 (LB – BMP) WRIT PETITION No.27638/2018 (LB – BMP) WRIT PETITION No.28692/2018 (LB – BMP) WRIT PETITION No.29867/2018 (LB – BMP) WRIT PETITION No.30066/2018 (LB – BMP) WRIT PETITION No.30415/2018 (LB – BMP) WRIT PETITION No.30867/2018 (LB – BMP) WRIT PETITION No.33013/2018 (LB – BMP) WRIT PETITION No.33406/2018 (LB – BMP) WRIT PETITION No.34265/2018 (LB – BMP) WRIT PETITION No.35728/2018 (LB – BMP) WRIT PETITION No.36017/2018 (LB – BMP) WRIT PETITION No.41121/2018 (LB – BMP) WRIT PETITION No.41409/2018 (LB – BMP) WRIT PETITION No.42748/2018 (LB – BMP) WRIT PETITION No.45817/2018 (LB – BMP) WRIT PETITION No.52417/2018 (LB – BMP) WRIT PETITION No.53220/2018 (LB – BMP) WRIT PETITION No.57548/2018 (LB – BMP) WRIT PETITION No.57893/2018 (LB – BMP) WRIT PETITION No.15/2019 (LB – BMP) WRIT PETITION No.59/2019 (LB – BMP) WRIT PETITION No.529/2019 (LB – BMP) WRIT PETITION No.1281/2019 (LB – BMP) WRIT PETITION No.1705/2019 (LB – BMP) WRIT PETITION No.7040/2019 (LB – BMP) WRIT PETITION No.9699/2019 (LB – BMP) WRIT PETITION No.9940/2019 (L – RES) WRIT PETITION No.11063/2019 (LB – BMP) WRIT PETITION No.11386/2019 (LB – BMP) WRIT PETITION No.13495/2019 (LB – BMP) WRIT PETITION No.14266/2019 (LB – BMP) WRIT PETITION No.18873/2019 (LB – BMP) WRIT PETITION No.19335/2019 (LB – BMP) WRIT PETITION No.19746/2019 (LB – BMP) WRIT PETITION No.21988/2019 (LB – BMP) WRIT PETITION No.22316/2019 (LB – BMP) WRIT PETITION No.22389/2019 (LB – BMP) WRIT PETITION No.22621/2019 (LB – BMP) WRIT PETITION No.23595/2019 (LB – BMP) WRIT PETITION No.23888/2019 (LB – BMP) WRIT PETITION No.24906/2019 (LB – BMP) WRIT PETITION No.25145/2019 (LB – RES) WRIT PETITION No.25167/2019 (LB – BMP) WRIT PETITION No.25459/2019 (LB – BMP) WRIT PETITION No.25462/2019 (LB – BMP) WRIT PETITION No.25496/2019 (LB – BMP) WRIT PETITION No.27756/2019 (LB – BMP) WRIT PETITION No.28990/2019 (LB – BMP) WRIT PETITION No.28992/2019 (LB – BMP) WRIT PETITION No.29271/2019 (LB – BMP) WRIT PETITION No.29296/2019 (LB – BMP) WRIT PETITION No.29578/2019 (LB – BMP) WRIT PETITION No.30168/2019 (LB – BMP) WRIT PETITION No.38063/2019 (LB – BMP) WRIT PETITION No.38832/2019 (LB – BMP) WRIT PETITION No.39208/2019 (LB – BMP) WRIT PETITION No.41698/2019 (LB – BMP) WRIT PETITION No.42396/2019 (LB – BMP) WRIT PETITION No.44811/2019 (LB – BMP) WRIT PETITION No.46939/2019 (LB – BMP) WRIT PETITION No.50186/2019 (LB – BMP) WRIT PETITION No.50280/2019 (LB – BMP) WRIT PETITION No.50442/2019 (LB – BMP) WRIT PETITION No.50652/2019 (LB – BMP) WRIT PETITION No.51603/2019 (LB – BMP) WRIT PETITION No.51825/2019 (LB – BMP) WRIT PETITION No.52084/2019 (LB – BMP) WRIT PETITION No.52669/2019 (LB – BMP) WRIT PETITION No.52682/2019 (LB – BMP) WRIT PETITION No.135/2020 (LB – BMP) WRIT PETITION No.388/2020 (LB – BMP) WRIT PETITION No.3771/2020 (LB – BMP) WRIT PETITION No.4595/2020 (LB – BMP) WRIT PETITION No.5087/2020 (LB – BMP) WRIT PETITION No.5758/2020 (LB – BMP) WRIT PETITION No.6413/2020 (LB – BMP) WRIT PETITION No.6633/2020 (LB – BMP) WRIT PETITION No.7454/2020 (LB – BMP) WRIT PETITION No.7895/2020 (LB – BMP) WRIT PETITION No.7949/2020 (LB – BMP) WRIT PETITION No.7973/2020 (LB – BMP) WRIT PETITION No.8026/2020 (LB – BMP) WRIT PETITION No.8133/2020 (LB – BMP) WRIT PETITION No.8538/2020 (LB – BMP) WRIT PETITION No.8540/2020 (LB – BMP) WRIT PETITION No.8697/2020 (LB – BMP) WRIT PETITION No.8831/2020 (LB – BMP) WRIT PETITION No.8849/2020 (LB – BMP) WRIT PETITION No.8984/2020 (LB – BMP) WRIT PETITION No.8993/2020 (LB – BMP) WRIT PETITION No.9421/2020 (LB – BMP) WRIT PETITION No.11152/2020 (LB – BMP) WRIT PETITION No.11163/2020 (LB – BMP) WRIT PETITION No.11307/2020 (LB – BMP) WRIT PETITION No.12570/2020 (LB – BMP) WRIT PETITION No.12576/2020 (LB – BMP) WRIT PETITION No.13116/2020 (LB – BMP)
Decided On : 04-08-2021
Constitution Of India, 1950 - Articles 265, 226 And 227 - Companies Act, 1556 - Companies Act, 2013 - Mines And Mineral Regulation Of Development Act - Section 21 [4], 21[4A], 4, A[1A] - Indian Penal Code, 1860 - Section 379 - MMRD ACT - Section 36, 42, 44, 3 - Building and Other Construction Workers’ Welfare Cess Rules, 1998- Rules 3, 4, 8 and 11 - KMMC RULES 1994 - Levy of cess for collection - Taxes which may be imposed - Quash The Demand Notice - Demand Of Amount Towards Gst At 18 Percent On Ground Rent Scrutiny Fee And Etc - Challenge to ground rent, licence fee, (Hi) lake rejuvenation fee and scrutiny fee - Seeking Direction The Respondents To Issue Occupancy Certificate As Sought For By Petitioner Vide Letter Dtd. Without Insisting For Ground Rent Etc - Contention of petitioners in this petition is akin to what is contended in aforesaid writ petition. Here again, when documents were submitted to BBMP, after arriving at a joint development agreement for sanction of plan and grant of building licence for construction of a residential apartment complex, BBMP made grant of such permission/licence subject to payment of ground rent and several other demands which run into several crores on various heads. The challenge in this petition is to following action of levying fee/tax.
Finding of the Court:
Rule 7 of Rules mandates the employer to provide details of estimated cost of construction in Form No.I and the Assessing Officer would pass an order of assessment. A conjoint reading of Rules 4 and 7 makes it unmistakably clear that the local authority may either within 30 days of completion of the project or within 30 days from the date of assessment of cess payable is finalized, whichever is earlier, shall pay cess to the Cess Collector - Charging provisions are Section 3 and Rule 3 of the Act and Rules respectively, which no where mandate that payment of labour cess should be paid upfront. It is the Government order which generates such demand. Since the impugned Government order runs counter to the Act and the Rules, it is rendered unenforceable. Therefore, the petitioners are not required to pay labour cess upfront before construction takes place but would not escape such payment as mandated under the Act and as such the demand of labour cess by the BBMP at 1% being valid but the demand of it upfront is invalid - Court and other constitutional Courts qua the facts obtaining in the case at hand, the impugned demands mads by the BBMP to the extent considered would all be unenforceable in the existing incarnation as they are ultravires the Act. As a logical sequitur, court hold, that imposition of the impugned imposts is impossible to be countenanced.
Result: Writ Petitions are allowed.
ORDER :
Conglomeration of these petitions raise a challenge to several imposts/fee imposed by the Bruhath Bengaluru Mahanagara Palike [‘the BBMP’ for short] and the State of Karnataka upon the residents and developers/builders of the city of Bengaluru, all of which come under the precincts of the BBMP.
2. Since these petitions run into several numbers, I deem it appropriate to use the pleadings in W.P.No.36017/2018, W.P.No.4601/2020 and W.P.No.8849/2020, which are the leading petitions for noticing the facts, as all of the actions are challenged in these petitions. All the other petitions raise a common challenge.
FACTUAL SCORE:
W.P.No.36017 of 2018:-
3. The subject petition is filed by M/s Vaswani Estates Developers Private Limited, [‘the Company’ for short] a developer. The Company claims to be a Private Limited Company registered under the Companies Act, 1956 which is in the business of construction/development of several residential and commercial projects in and around the City of Bangalore. It is the claim of the Company that in order to develop certain lands in the property bearing Municipal Nos.1 and 1/1 Madras Tank Road/St.Marks Road with PID No.76-20-35 owned by one Sri P.H. Krishna Reddy, the Land Owner, the Company and the Land Owner entered into a joint development agreement on 11-02-2005 in respect of the aforesaid property to construct a commercial building and registered the same at the jurisdictional sub-registrar. It also transpires that several supplemental joint agreements took place between the Company and the Land Owner which is not the concern or the issue in this petition.
4. The Company intending to construct a commercial building on the property and several agreements having been entered into between the parties, the Company had to and did obtain ‘no objections’ from concerned departments in respect of construction to be undertaken on the property. All no objection certificates obtained from several statutory authorities are also annexed to the petition.
5. As stated above, the Company intending to construct a commercial building on the property (3B+G+9UF) made an application on 20th March, 2018 along with requisite documents prescribed in law to the BBMP and the Town Planning Department of the BBMP. The Company also remitted requisite fee of Rs.68,534/-along with the application.
6. The BBMP approved and granted building licence as also a sanctioned plan to the Company on 04-07-2018. The 3rd respondent/Department of Town Planning of the BBMP issued an endorsement demanding Rs.1,86,86,000/-from the Company under various heads set out in the endorsement and an additional amount of labour cess of Rs.17,16,200/-for the purpose of grant of building licence and sanction of plan. The impugned demands made read as follows:
It is these two endorsements and the fee that is levied under various heads in terms of aforementioned endorsement that are the subject matter of challenge in this petition. This petition concerns challenge to (i) ground rent, (ii) licence fee, (iii) lake rejuvenation fee and (iv) scrutiny fee.
W.P.No. 4601 of 2020:-
7. The petitioners in this writ petition are Mr. Sunderam Shetty and others. The contention of the petitioners in this petition is akin to what is contended in the aforesaid writ petition. Here again, when documents were submitted to the BBMP, after arriving at a joint development agreement for sanction of plan and grant of building licence for construction of a residential apartment complex, the BBMP made the grant of such permission/licence subject to payment of ground rent and several other demands which run into several crores on various heads. The challenge in this petition is to the following action of levying fee/tax. The prayer of the petitioners reads as follows:-
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