The classification of property usage significantly affects property tax assessments, with non-residential usage incurring higher tax rates.

ORDER

Heard learned counsel for the petitioners, learned Government Pleader for Municipal Administration and Urban Development appearing for respondent Nos.1 to 4, learned Government Pleader for Revenue appearing for respondent No.5, learned Standing Counsel for GHMC appearing for respondent No.6 and learned Standing Counsel for HMDA appearing for respondent No.8 and perused the record. The 7^th respondent is removed from the array of parties as per the order of this Court dt.25.07.2023.

2. The case of the petitioners in brief is that they are the owners of residential building consisting of stilt + 5 upper floors; that the said building was constructed by obtaining building permission dt.20.11.2019; that on completion of construction, the 6^th respondent had allotted door No.3-99/100 and assessed the subject property to property tax by assigning APP No.9122800781/2021 dt.30.11.2021 with half yearly property tax of Rs.1,63,551/- including library cess; and that the 6^th respondent while assessing the said residential building has treated the same as shops and levied penalty claiming the same as unauthorized usage.

3. It is the further case of the petitioners that the respondents thereafter unilaterally revised the said tax and finalized the tax at Rs.1,88,501/- for half year, including interest as on 18.01.2022, but did not assess the ground floor to tax; and that noticing the aforesaid omission, the same was brought to the notice of the respondents, while paying half yearly tax of Rs.1,66,822/-.

4. It is also the case of the petitioners that since there was deviation in construction, the 8^th respondent – HMDA authorities had issued notice dt.26.07.2022 directing the petitioner to pay an amount of Rs.1,13,780/- towards compounding fee for the deviation and on making the aforesaid payment, the 8^th respondent issued Occupancy Certificate dt.28.07.2022.

5. Petitioners contend that while the aforesaid construction made by them has been regularized on issuance of Occupancy Certificate, the 6^th respondent had levied property tax on the subject building by treating the same as commercial property and levied property tax @0.35% on the property as against 0.15% applicable to a residential building as per the HMDA manual, which covers hostels and boarding houses as residential use as per the Revised Development Plan of erstwhile Municipal Corporation of Hyderabad area (HMDA core area) vide G.O.Ms.No.363, dt.21.08.2010.

6. It is the further contention of the petitioners that basing on the building usage, the 6^th respondent had imposed penalty, and upon enquiry by the petitioners with the 6^th respondent, they were informed that since, the subject building was being used as hostel, the same would come under commercial use, but not an unauthorized construction, but due to technical issues in their website, the said building is treated as unauthorized one and as such the same was mentioned in the property tax assessment notice as usage of the building as shops.

7. It is the further case of the petitioners that the 6^th respondent by treating the usage of the building for hostel as unauthorized construction, is seeking to levy penalty for every day by showing the floor usage as shops instead of residential portion apart from assessing the subject property to tax @0.35% as commercial usage had levied library cess, and in addition imposed 100% penalty, which is nothing but double jeopardy, which action of the respondents it is contended as highly illegal and arbitrary.

8. Petitioners contend that a similar issue has fallen for consideration before the High Court of Karnataka in the case of Taghar Vasudeva Ambrish v/s. Appellate Authority For Advance Ruling, Karnataka1 with regard to collection of Integrate