M/S Axis Concepts Capstone Private Limited vs. The State Of Karnataka

WP/6700/2021HC KarnatakaGSTCNR KAHC01013022202124 June 2025Bench: SACHIN SHANKAR MAGADUM9 pages

For Petitioner: SRI. B.PRAMOD, ADVOCATEFor Respondent: SMT. V.SPOORTI, HCGP FOR R1 TO R3; SRI. B.L.SANJEEV, ADV. FOR R4 TO R5

AI SummaryAllowed

Facts

The petitioners, M/s Axis Concepts Capstone Private Limited and Sri. B. Ramakrishna, filed a writ petition challenging Section 18-A of the Karnataka Town and Country Planning Act, 1961, as amended, and various notifications and circulars issued by the State of Karnataka and Bruhat Bengaluru Mahanagara Palike (BBMP). Specifically, they sought to quash Section 18-A(i) and (iv), Rule 37-A and 37-C inserted by a notification, circulars dated 04/09/2015 and 14/08/2020 issued by BBMP, and government orders mandating upfront collection of labour welfare cess. They also challenged a demand notice dated 01/03/2021 issued by the Joint Director (Town Planning - North), BBMP, for various charges including GST on Ground Rent, Betterment charges, and Labour cess. The petitioners sought a modified sanction plan without these insisted charges.

Held

The Court allowed the writ petition, setting aside the impugned demand notice dated 01.03.2021 issued by respondent No.5 (BBMP) as per Annexure-D. The Court directed the respondent BBMP to issue a modified sanction plan and to forthwith process the petitioner's application seeking a building license and sanction of the building plan strictly in accordance with law. It was clarified that the issuance of the building license and approval of the plan shall not be withheld on the ground that BBMP is contemplating an appeal, but any issued license or plan would be subject to the outcome of any appeal filed by BBMP. The Court's decision was based on the reasoning that the issues raised in the present writ petition were squarely covered by the binding decisions in M/s Sapthagiri Shelters and Sunderam Shetty, wherein relevant bye-laws and government circulars had been set aside. The ratio decidendi is that levies previously declared ultra vires or illegal by coordinate benches of the High Court cannot be enforced.

Key Issues

1. Whether Section 18-A(i) and (iv) of the Karnataka Town and Country Planning Act, 1961, as amended by Karnataka Act No. 23 of 2004, are ultra vires the Act? (Question of law) 2. Whether Rule 37-A and 37-C inserted by Notification No. UDD 3 TTP 2015 dated 25/02/2020 are illegal? (Question of law) 3. Whether the circulars dated 04/09/2015 and 14/08/2020 issued by BBMP, and the Government orders dated 18/01/2007 and 28/02/2007 mandating upfront collection of labour welfare cess, are arbitrary and without jurisdiction? (Question of law) 4. Whether the demand notice dated 01/03/2021 issued by BBMP for various charges including GST on Ground Rent, Betterment charges, and Labour cess is illegal? (Question of law) Petitioner's Arguments: The petitioners argued that the impugned provisions, notifications, circulars, and demand notice were illegal, without jurisdiction, and arbitrary. They relied on previous judgments of coordinate benches of the High Court in W.P.No.23086/2022 (M/s Sapthagiri Shelters) and W.P.No.36017/2018 (Sunderam Shetty) which had comprehensively adjudicated similar issues. Revenue/State's Arguments: The judgment does not record specific arguments from the respondents. However, it notes that the issues raised were squarely covered by previous binding decisions.

Sections Cited

Section 18-A, Rule 37-A, Rule 37-C

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

- 1 - HC-KAR NC: 2025:KHC:23050 WP No. 6700 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO.6700 OF 2021 (LB-BMP) BETWEEN: 1. M/S AXIS CONCEPTS CAPSTONE PRIVATE LIMITED, A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT 1ST FLOOR MAINI SADAN, NO.38, 7TH CROSS, LAVELLE ROAD, BANGALORE. REP. BY ITS CEO AND AUTHORIZED SIGNATORY, SRI. S.K.SRINIVAS MURTHY, AGED ABOUT 52 YEARS. 2. SRI. B.RAMAKRISHNA S/O LATE H.P.BETTEGOWDA AGED ABOUT 64 YEARS, RESIDING AT NO.189 MANDYA HOUSE, 7TH CROSS, SARASWATHINAGAR, VIJAYANAGAR, BENGALURU-560 040. REP. BY HIS GPA HOLDER M/S. AXIS CONCEPTS CAPSTONE PRIVATE LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT 1956, Digitally signed by SHARADAVANI B Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:23050 WP No. 6700 of 2021 HAVING ITS REGISTERED OFFICE AT 1ST FLOOR, MAINI SADAN, NO.38, 7TH CROSS, LAVELLE ROAD, BANGALORE BY ITS CEO AND AUTHORIZED SIGNATORY SRI. S.K.PRASANNA S/O LATE S.K.SRINIVASA MURTHY AGED ABOUT 52 YEARS. …PETITIONERS (BY SRI. B.PRAMOD, ADVOCATE) AND: 1. THE STATE OF KARNATAKA THE URBAN DEVELOPMENT DEPARTMENT VIKASA SOUDHA, DR.B.R.AMBEDKAR VEEDHI BANGALORE-560 001. REP. BY ITS SECRETARY 2. THE STATE OF KARNATAKA THE LABOUR DEPARTMENT VIKASA SOUDHA, DR. B.R. AMBEDKAR VEEDHI, BANGALORE-560 001. REP. BY ITS UNDER SECRETARY 3. THE STATE OF KARNATAKA DEPARTMENT OF PARLIAMENTARY AFFAIRS AND LEGISLATION VIKASA SOUDHA, DR. B.R.AMBEKDAR VEEDHI, BANGALORE-560 001. REP. BY ITS SECRETARY. - 3 - HC-KAR NC: 2025:KHC:23050 WP No. 6700 of 2021 4. BRUHAT BENGALURU MAHANAGARA PALIKE N.R.SQUARE, BANGALORE -560002. REPRESENTED BY ITS COMMISSIONER 5. THE JOINT DIRECTOR (TOWN PLANNING -NORTH) BRUHAT BANGALORE MAHANAGARA PALIKE N R SQUARE, HEAD OFFICE BUILDING, BANGALORE-560 002. …RESPONDENTS (BY SMT. V.SPOORTI, HCGP FOR R1 TO R3; SRI. B.L.SANJEEV, ADV. FOR R4 TO R5) THIS WP IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH SECTION 18-A OF THE KARNATAKA TOWN AND COUNTRY PLANNING ACT 1961 BROUGHT INTO EFFECT BY KARNATAKA ACT NO.23 OF 2004 (KARNATAKA TOWN AND COUNTRY PLANNING (AMENDMENT) ACT 1998 AS CONTAINED IN ANNXURE-G1 IN SO FAR AS SECTION 18-A(i) AND (iv) OF THE KARNATAKA ACT NO.23 OF 2004 IS CONCERNED AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM - 4 - HC-KAR NC: 2025:KHC:23050 WP No. 6700 of 2021

ORAL ORDER

Petitioners, in the captioned petition has sought for following reliefs : (i) grant an order, direction or writ in the nature of Certiorari quashing Section 18-A of the Karnataka Town & Country Planning Act, 1961 brought into effect by Karnataka Act No. 23 of 2004 (Karnataka Town & Country Planning (Amendment) Act, 1998) as contained in ANNEXURE-G1 insofar as Section 18-A(i) and (iv) of the Karnataka Act No. 23 of 2004 is concerned; (ii) Grant an order, direction or writ in the nature of Certiorari quashing the Notification issued by the 1st Respondent bearing No. UDD 3 TTP 2015 dated 25/02/2020 as contained in ANNEXURE-G insofar as the inserted Rule 37-A and 37-C is concerned; (iii) issue a writ or order by way of certiorari quashing the circular dated 04/09/2015, bearing No. Heninayo/JD(N)/DM3/PR/320/2015-16 issued by the Respondent No.4 (Annexure-E) in so far the Petitioners are concerned. HC-KAR NC: 2025:KHC:23050 (iv) issue a writ or order by way of certiorari quashing the circular dated 14/08/2020, bearing No. He. Ni.Ka.Pa.Ko/P.R/320/2020-21 issued by the Respondent No.4 (Annexure-H) in so far the Petitioners are concerned. (v) issue a writ or order by way of certiorari quashing the Government order bearing No.LD/300/LET/2006 dated 18/01/2007 and the corrigendum order bearing No.LD/300/LET/2006, dated 28/02/2007 issued by the Respondent No.2 mandating upfront collection of labour welfare cess (Annexure-F) in so far the Petitioners are concerned. (vi) issue a writ or order by way of certiorari quashing the demand notice dated 01/03/2021 bearing No.BBMP/Addl.Dir/JDNORTH/ LP/0031/2020-21 and No.BBMP/Addl.Dir/JDNORTH/ LP/0246/2017- 18, issued by the Respondent No.5 (Annexure- D) for demanding in so far it is concerned to Ground rent, GST on Ground rent, Betterment charges for building, Betterment charges for site, excess Security deposit, revised License fee, revised scrutiny fee, Cess for water supply scheme, Surcharge for formation outer ring road, Cess for improvement of slum, Surcharge for HC-KAR NC: 2025:KHC:23050 Mass Rapid Transport System, Labour cess and etc., as illegal, without juri iction and arbitrary. (vii) issue a writ or order or direction by way of mandamus directing the Respondent No.4 and 5 BBMP to issue the modified sanction plan for construction of Residential Apartment Building in the Schedule Property without insisting the Ground rent, GST on Ground rent, Betterment charges for building, Betterment charges for site, excess Security deposit, revised License fee, revised scrutiny fee, Cess for water supply scheme, Surcharge for formation outer ring road, Cess for improvement of slum, Surcharge for Mass Rapid Transport System, Labour cess and etc., and (viii) pass any such other order(s) as this Hon'ble Court deems fit in the facts and circumstances of the case 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:23050 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. 4. 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:23050

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 01.03.2021 issued by respondent No.5 as per Annexure-D is hereby set-aside. (iii) Respondent - BBMP is hereby directed to issue modified sanction plan. (iv) Respondent - BBMP is directed to forthwith process the petitioner’s application seeking building license and HC-KAR NC: 2025:KHC:23050 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 SMJ List No.: 2 Sl No.: 52

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.