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2024 Supreme(Kar) 102
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
S Sunil Dutt Yadav, J.
Shariff Constructions – Petitioner
Versus
Bruhath Bangalore Mahanagar Palike And Ors. – Respondents
Writ Petition No.1867 of 2024 (LB-TAX)
Decided On : 22-02-2024
Advocate Appeared:
For the Petitioner: Sri. Syed Akmal Hasan Razvi, Adv.
For the Respondent: Smt. Sumana Baliga M, Adv.
IMPORTANT POINT
The judgment establishes the detailed procedure for reopening self-assessment returns and the limitations on challenging orders through writ proceedings under the BBMP Act.
Headnote:
Property Tax - BBMP Act - Section 144(13), 144(15), 144(16) - The court discussed the procedure for reopening self-assessment returns, including the requirement for inspection, survey, and measurement of the building, furnishing necessary information, best judgment assessment, reassessment, penalty, interest, notice of reassessment, objections, and the limitation period. The court also highlighted the power of the Chief Commissioner to clarify disputes and the limitations on challenging orders through writ proceedings.
Fact of the Case:
The petitioner sought de-sealing of premises, setting aside of a demand notice for property tax, and refund of excess tax. The court ordered an inspection to be carried out and set aside the demand notice, allowing BBMP to take further steps in accordance with the procedure stipulated.
Finding of the Court:
The court discussed the procedure for reopening self-assessment returns and set aside the demand notice, allowing BBMP to take further steps in accordance with the procedure stipulated.
Issues: Validity of demand notice, procedure for reopening self-assessment returns, and compliance with the statutory scheme.
Ratio Decidendi: The court emphasized the procedure for inspection, reassessment, penalty, interest, notice of reassessment, objections, and the limitation period under Section 144 of the BBMP Act.
Final Decision: The writ petition was disposed of, and the impugned demand notice was set aside, allowing BBMP to take further steps in accordance with the procedure stipulated.
ORDER :
Petitioner has filed the present writ petition seeking for de-sealing the premises and has further sought for setting aside of the notice at Annexure-D which is the demand notice issued by the respondent – BBMP stipulating the property tax, cesses, interest, penalty, solid waste management cess and total amount due with respect to the year 2019-2020. Petitioner has also sought for refund of excess tax collected from the petitioner.
2. It is noticed that in most of the petitions filed by the property owners, the contention that is taken is that the demand notice raised as well as the show cause notice issued, are not preceded by the procedure stipulated under the Bruhat Bengaluru Mahanagara Palike Act, 2020 (for short 'the Act') and accordingly, it is submitted that unless there is an inspection in their presence, the consequential notices and orders are required to be set aside.
3. On behalf of the respondent – BBMP it is submitted that inspection has been carried out and the details are ascertained and on the basis of which show cause notices and demand notices have been issued and on the basis of the inspection report, the re-assessment has been done on the material collected at the time of inspection and procedure as provided under Section 144 of the Act, has been complied with. Accordingly, it is submitted that the question of interfering with the impugned demand notice does not arise.
4. In the present case, this Court by order dated 24.01.2024 has passed an order which reads as hereunder:
"Learned counsel for the petitioner submits that the petitioner has been paying taxes in terms of the built-up area and despite petitioner paying taxes regularly, fresh proceedings are initiated insofar as the vacant area contrary to FAQ No.22.
In light of the contentions raised, there would be an inspection to be carried out by the respondent -BBMP in the presence of the petitioner.
Petitioner to be present at the site on 01.02.2024 at 11.00 a.m. Petitioner to furnish all necessary documents as sought for by the BBMP.
A report to be prepared and filed containing all relevant details that may be relating to the proceedings to be initiated by the BBMP to reopen self-assessment.
In light of the assertion regarding the respondent of BBMP having sealed the office of the petitioner, taking note of the contentions raised, the said premises is to be de-sealed forthwith.
Petitioner undertakes to pay all lawful dues as may be raised. The said undertaking is taken note of."
5. Pursuant to such order passed, learned counsel for BBMP has filed a memo enclosing copy of Mahazar at Annexure-R1 which details the measurement of the plinth area (furnished in square meters) taking note of the construction put up pursuant to the sanction plan.
6. Heard both sides.
7. In light of numerous petitions filed questioning the correctness of the procedure followed by the BBMP while reopening the self-assessment returns, need has arisen to lay down the procedure that is required to be followed in cases of reopening self-assessment where returns are not filed and in cases of random scrutiny.
8. It must be noticed that Section 144 (13) of the Act provides for the procedure in cases of random scrutiny where returns are already filed and in cases where returns are not filed as stipulated under sub-section (7) of Section 144 of the Act, the Chief Commissioner or any person authorized by him may enter, inspect, survey or measure any land or building after giving notice to the owner or occupier. It is the first step as stipulated under Section 144(13) of the Act which would come into play either in case of random scrutiny or in case of evasion where though properties are constructed and liable for tax and returns under self-assessment ought to have been filed, such returns are not filed.
9. In such of the above cases, in terms of Section 144(13) of the Act, the Chief Commissioner or person authorized by him may inspect, survey and take measurement of the building. However, it i
