Sri. Umesh K A vs. The State Of Karnataka
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The petitioners, Sri Umesh K A and others, filed a writ petition challenging a notification issued by the State of Karnataka, Department of Urban Development, bearing No. UDD 3 TTP 2015 dated 25/02/2020, specifically concerning the inserted Rules 37-A and 37-C. They also challenged government orders dated 18/01/2007 and 27/02/2007, which mandated upfront collection of labour welfare cess. Furthermore, the petitioners sought to quash demand notices issued by the Bruhat Bengaluru Mahanagara Palike (BBMP) for Labour Cess, Ground Rent, Betterment Fee, Scrutiny Fee, and License Fee. The petitioners contended that BBMP lacked the authority to collect these taxes and fees based on arbitrary rates and sought directions to collect fees strictly as per the Bengaluru Mahanagara Palike Building Bye Laws, 2003.
Held
The Court held that the issues raised in the present writ petition are squarely covered by the binding decisions of its Co-ordinate Benches in W.P.No.23086/2022 (M/s Sapthagiri Shelters) and W.P.No.36017/2018 (Sunderam Shetty). In M/s Sapthagiri Shelters, the Court struck down Karnataka Act No.01 of 2022 and Karnataka Act No.37 of 2024, holding the linking of fees under Rule 37-A of the Karnataka Planning Authority Rules, 1965, to market/guidance value under Section 45-B of the Karnataka Stamp Act, 1957, as illegal, and quashed related circulars. Clause 3.8 of the BBMP Building Bye-laws, 2003, pertaining to Ground Rent, was declared invalid. In Sunderam Shetty, the Court declared the levies of Ground Rent, License Fee, Building License Fee, and Scrutiny Fee under the relevant bye-laws as ultra vires the Act and quashed government circulars. Consequently, the present petition did not warrant separate adjudication and was allowed in terms of the operative directions issued in the aforesaid writ petitions. The impugned demand notice dated 22.05.2025 was set aside, and BBMP was directed to issue a fresh/modified plan and process the petitioner’s application for building license and sanction of the building plan strictly in accordance with law.
Key Issues
1. Whether the notification issued by the State of Karnataka, Department of Urban Development, bearing No. UDD 3 TTP 2015 dated 25/02/2020, insofar as it inserted Rules 37-A and 37-C, is ultra vires the relevant Act. The petitioners argued that linking fees under Rule 37-A to market/guidance value under Section 45-B of the Karnataka Stamp Act, 1957, is illegal, citing the decision in M/s Sapthagiri Shelters. 2. Whether the government orders dated 18/01/2007 and 27/02/2007, mandating upfront collection of labour welfare cess, are valid. 3. Whether the Bruhat Bengaluru Mahanagara Palike (BBMP) has the authority to collect Ground Rent, License Fee, Building License Fee, and Scrutiny Fee under the bye-laws and circulars, and if these levies are ultra vires the Act. The petitioners relied on the decision in Sunderam Shetty, which declared similar levies as ultra vires and quashed related circulars. The revenue or State did not record any specific arguments in the judgment.
Sections Cited
Section 45-B
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER This caption petition is filed seeking for the following reliefs: “PRAYER The Petitioner humbly prays that this Hon'ble Court may be pleased to: a) Issue an order, direction or writ in the nature of certiorari quashing the Notification issued by the Respondent No.1 bearing No. UDD 3 TTP 2015 dated 25/02/2020 (Annexure-D) insofar as the inserted R Rules 37-A and 37-C are concerned so far as petitioner consoon. b) Grant an order, direction or writ in the nature of certiorari quashing the Government order bearing No. LD/300/LET/2006, issued by the Respondent No.2 dated 18/01/2007 (Annexure-E) and the corrigendum order bearing No. LD/300/LET/2006, issued by the Respondent No.2, dated 28/02/2007 (Annexure-F) mandating upfront collection of labour welfare cess in so far as petitioner consoon. c) Issue a writ, order or direction in nature of a certiorari as regards the levy sought to be imposed by the Impugned Demand Notice at Annexure-A bearing LP No.BBMP/Ad.Com. /EST/1088/24-25 dated 22/05/2025 issued by Respondent No.3 in so far as Labour Cess for a sum of Rs.2,22,702/-. d) Issue a writ, order or direction in nature of a Certiorari as regards the levy sought to be imposed by the Impugned Demand Notice at Annexure-A bearing LP No.BBMP/Ad.Com. /EST/1088/24-25 dated 22/05/2025 issued by Respondent No.3 in so far levy of ground rent for a sum of Rs.4,44,720/- HC-KAR NC: 2025:KHC:22318 e) Issue a writ, order or direction in nature of a Certiorari as regards the levy sought to be imposed by the Impugned Demand Notice at Annexure-A bearing LP No.BBMP/Ad.Com. /EST/1088/24-25 dated 22/05/2025 issued by Respondent No.3 in so far as Betterment fee of a sum of Rs.1,23,600/-, for building, Scrutiny Fee for a sum of Rs.23,976/- and License fee a sum of Rs.4,79,667/-: f) Declare that the Respondent Nos.3 and 4 (BBMP) have no authority to collect the taxes under the guise of collection of license fee cess and other fees under various heads based on arbitrary rates and values: g) Issue a writ in the nature of mandamus directing the Respondent Nos. 3 and 4 to collect fees as specified in the Bengaluru Mahanagara Palike Building Bye Laws, 2003 only: h) And grant such other reliefs as this Hon'ble Court may deem fit to grant, based on the facts and circumstances of the case in the interest of justice equity. INTERIM PRAYER Pending disposal of the above petition, this Hon'ble Court may be pleased to stay the operation of the Impugned Demand Notice at Annexure-A bearing LP No.BBMP/Ad.Com./EST/1088/24-25 dated 22/05/2025 Issued by Respondent No.3 in so far as it pertains to Ground Rent, GST on Ground Rent Betterment charges for Building, Betterment Charges for Site, License fee, Scrutiny fee and Labour Cess in the interest of justice and equity.”
The Co-ordinate Benches of this Court, in W.P.No.23086/2022 and connected matters(herein referred to as “M/s Sapthagiri Shelters”) as well as W.P.No.36017/2018 and connected matters(herein HC-KAR NC: 2025:KHC:22318 referred to as “Sunderam Shetty”), have comprehensively adjudicated the issue involved and settled the controversy.
In Sunderam Shetty and connected cases, the Co-ordinate Bench declared the levies of Ground Rent, License Fee, Building License Fee, and Scrutiny Fee under the relevant bye-laws as ultra vires the Act and quashed the Government Circulars dated 04.09.2015, 27.01.2017, and 30.03.2017. and
Similarly, in M/s Sapthagiri Shelters and connected matters, the Co-ordinate Bench struck down the Karnataka Act No.01 of 2022 and Karnataka Act No.37 of 2024, holding that linking fees under Rule 37- A of the Karnataka Planning Authority Rules, 1965 to market/guidance value under Section 45-B of the Karnataka Stamp Act, 1957 is illegal. It further quashed all related Circulars and declared Clause 3.8 of the BBMP Building Bye-laws, 2003, pertaining to Ground Rent, as invalid. HC-KAR NC: 2025:KHC:22318
The issues raised in the present writ petition are squarely covered by the above binding decisions, wherein the relevant bye-laws and government circulars have been set aside.
In light of the authoritative pronouncements, the present petition does not warrant separate adjudication and is liable to be allowed in terms of the operative directions issued in the aforesaid writ petitions.
Accordingly, this Court proceeds to pass the following: ORDER (i) The writ petition is allowed. (ii) The impugned demand notice dated 22.05.2025 issued by respondent No.3 as per Annexure-A is hereby set- aside. (iii) Respondent - BBMP is hereby directed to issue fresh/modified plan as the case may be. HC-KAR NC: 2025:KHC:22318 (iv) Respondent - BBMP is directed to forthwith process the petitioner’s application seeking building license and sanction of the building plan, strictly in accordance with law. (v) It is made clear that the issuance of the building license and approval of the plan shall not be withheld merely on the ground that the BBMP is contemplating to file an appeal against the reported judgment. (vi) If the building license and sanction plan are issued, the same shall be subject to the outcome of any appeal that may be filed by the BBMP against the said judgment.
Pending applications, if any, are also disposed off. (SACHIN SHANKAR MAGADUM) JUDGE
AKV, List No.: 1 Sl No.: 14
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.