M/S Sri Balaji Group vs. State Of Karnataka

Facts

The petitioner, M/s Sri Balaji Group, filed a writ petition challenging a demand notice dated July 8, 2020, issued by the Assistant Director (Town Planning Mahadevapura), respondent No. 4. The demand included Rs. 50,387/- for scrutiny fee, Rs. 10,07,737/- for license fee, Rs. 5,94,565/- for ground rent and GST, Rs. 11,19,708/- for security deposit, and Rs. 17,803/- for Construction Workers Welfare Cess. The petitioner also sought to quash a Government Order dated January 18, 2007, and its corrigendum dated February 28, 2007, regarding upfront collection of labour welfare cess. Additionally, the petitioner challenged Bye-law No. 3.9 of the Bangalore Mahanagara Palike Building Bye-laws, 2003, as unconstitutional and sought a direction to issue a building plan and license without insisting on the disputed payments.

Held

The Court held that the issues raised in the present writ petition are squarely covered by the binding decisions of coordinate benches in M/s Sapthagiri Shelters and Sunderam Shetty. In Sunderam Shetty, the levies of Ground Rent, License Fee, Building License Fee, and Scrutiny Fee under the relevant bye-laws were declared ultra vires the Act, and government circulars were quashed. Similarly, in M/s Sapthagiri Shelters, certain Karnataka Acts and rules linking fees to market/guidance value were struck down, and Clause 3.8 of the BBMP Building Bye-laws, 2003, pertaining to Ground Rent, was declared invalid. Therefore, the present petition did not warrant separate adjudication. The Court allowed the writ petition, quashed the impugned demand notice dated 08.07.2020, and directed the BBMP to issue a fresh/modified plan and process the petitioner's application for a building license and sanction of the building plan strictly in accordance with law. The Court clarified that the issuance of the license and plan should not be withheld due to any contemplation of appeal by the BBMP, but would be subject to the outcome of any appeal filed.

Key Issues

1. Whether the demand notice dated 08.07.2020, issued by respondent No. 4, demanding scrutiny fee, license fee, ground rent and GST, security deposit, and construction workers welfare cess, is legal and valid? (Question of law and fact, turning on the interpretation of relevant bye-laws and government orders). 2. Whether the Government Order bearing G.O.No.LD 300 LET 2006 dated 18/01/2007 and its corrigendum dated 28.02.2007, directing upfront collection of labour welfare cess, are constitutional and valid? (Question of law, turning on the validity of the government order). 3. Whether Bye-law No. 3.9 of the Bangalore Mahanagara Palike Building Bye-laws, 2003, is unconstitutional, arbitrary, illegal, and ultravires the Karnataka Municipal Corporations Act? (Question of law, turning on the validity of the bye-law). Petitioner's arguments: The petitioner contended that the demand notice and the levies are illegal. They relied on previous judgments by 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 set aside similar levies and government circulars. Respondents' arguments: The judgment does not record specific arguments from the respondents. It notes that the issues raised are squarely covered by previous binding decisions.