Sree Saraswathi Vidya Mandira Association (R) vs. State Of Karnataka

WP/5426/2025HC KarnatakaGSTCNR KAHC01011231202528 March 2025Bench: R DEVDAS5 pages

For Petitioner: SRI. LAXMINARAYAN, ADVOCATE AND SRI. UMESH S.P., ADVOCATEFor Respondent: SRI. SESHU V., HCGP FOR R1 SRI. GOWTHAMDEV C. ULLAL, ADVOCATE FOR R2 AND R3

AI SummaryRemanded

Facts

The petitioner, Sree Saraswathi Vidya Mandira Association, an educational institution, was allotted a Civil Amenity site on lease in 1991. The petitioner applied for renewal of the lease on 02.08.2021. The Bangalore Development Authority (BDA) issued a notice on 03.06.2022 requesting documents, which the petitioner submitted on 09.06.2022. After further representations and a spot inspection in September 2024, the BDA Board resolved to renew the lease. The Finance Department calculated the lease amount, leading to an impugned demand notice dated 21.10.2024 for Rs. 3,09,38,727/-. The petitioner deposited Rs. 18,92,318/-, covering most items, but disputed the levy of Rs. 1,01,84,244/- as interest from 17.06.2021 to 30.09.2024 and 18% GST on this interest.

Held

The Court found substance in the petitioner's submission that the levy of interest was a consequence of the delay by the respondent authorities in processing the lease renewal application. The Court reasoned that if the BDA had acted promptly on the petitioner's application submitted on 02.08.2021, the issue of interest would not have arisen. Therefore, the Court directed the Estate Officer and the Commissioner of BDA to consider the petitioner's representation dated 25.10.2024. The Court ordered that a decision be taken in light of the observations made and in accordance with the law, to be completed within two months. No precipitative action regarding the payment of interest was to be taken against the petitioner until a decision was reached. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the levy of interest on the lease renewal amount from 17.06.2021 to 30.09.2024 is justified, considering the delay in processing the renewal application by the Bangalore Development Authority (BDA)? Petitioner's contention: The petitioner argued that the interest should not be levied as the delay in processing the lease renewal application was attributable to the BDA, not the petitioner. They submitted a representation seeking relaxation on the payment of interest. The petitioner relied on the principle that interest should not be levied for delays caused by the authorities. Revenue/State's contention: The judgment does not record any specific arguments made by the respondents regarding the levy of interest or GST on interest. The demand notice itself is the basis of the dispute.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

- 1 - NC: 2025:KHC:13299 WP No. 5426 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE R DEVDAS WRIT PETITION NO. 5426 OF 2025 (BDA) BETWEEN: SREE SARASWATHI VIDYA MANDIRA ASSOCIATION (R) REGISTERED UNDER THE KARNATAKA SOCIETIES REGISTERED ACT 1960, REPRESENTED BY ITS SECRETARY, V.S. NIRANJAN, S/O. P.G. SIBHRAMANNYA SHASHTRY, AGED ABOUT 60 YEARS, R/AT K.R.SINDYE ROAD, V.V.PURAM, BANGALORE -560004, PRESENT ADRESS R/AT NO.9, VANIVILASA ROAD, V.V.PURAM, BANGALORE-560 004. …PETITIONER (BY SRI. LAXMINARAYAN, ADVOCATE AND SRI. UMESH S.P., ADVOCATE) AND: 1. STATE OF KARNATAKA REPRESENTED BY PRINCIPAL SECRETARY, HOUSING AND URBAN DEVELOPMENT DEPARTMENT, M/S BUILDING, BANGALORE-560001, 2. THE COMMISSIONER, BANGALORE DEVELOPMENT AUTHORITY, KUMAR PARK WEST, T.CHOWDAIAH ROAD, BANGALORE-560020. Digitally signed by KRISHNAPPA LAXMI YASHODA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:13299 WP No. 5426 of 2025 3. ESTET OFFICER, BANGALORE DEVELOPMENT AUTHORITY, KUMAR PARK WEST, T. CHOWDAIAH ROAD, BANGALORE-560020. …RESPONDENTS (BY SRI. SESHU V., HCGP FOR R1 SRI. GOWTHAMDEV C. ULLAL, ADVOCATE FOR R2 AND R3) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE DEMAND NOTICE IN RESPECT OF INTEREST PORTION FROM 17/06/2021 TO 30/09/2024 IN ITEM NO.5 IN THE DEMAND NOTICE AND FURTHER 18 PERCENT GST ON THE INTEREST WHICH IS AT ITEM NO.6 IN THE DEMAND NOTICE DATED 21/10/2024 BEARING NO. BEM A PRA/E.O/C.A./228/2024-25 ISSUED BY THE R3 VIDE ANNEXURE-P AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE R DEVDAS

ORAL ORDER

The petitioner/Society was allotted a Civil Amenity site in Site No.2 of Banashankari III Stage, Channammanakere Achkattu in the year 1991 and the petitioner established an education institution on the lands in question. The allotment of the lands in favour of the petitioner was on lease basis. Therefore, the petitioner made an application for renewal of the lands on 02.08.2021. The 3rd respondent - Estate Officer of the Bangalore Development Authority issued a notice on NC: 2025:KHC:13299

03.06.

2022 calling for certain documents at the hands of the petitioner. The petitioner submitted the relevant records on 09.06.2022. When no action was taken by the respondent, the petitioner gave one more representation on 05.08.2023. The respondent held a spot inspection in the month of September 2024 and consequently, the Board of the Bangalore Development Authority passed Resolution No.142/2023 to renew the lease in favour of the petitioner/Society. The resolution was forwarded to the Finance Department to calculate the lease amount payable by the petitioner. Consequently, the impugned notice dated 21.10.2024 was issued to the petitioner calling upon the petitioner to pay various amounts towards renewal, the total sum being Rs.3,09,38,727/-.

Learned counsel for the petitioner submits that the petitioner has already deposited a sum of Rs.18,92,318/- on 24th October 2024. Learned counsel submits that the said sum of Rs.18,92,318/- includes the amount at Serial Nos.1 to 4 and 7 of the impugned notice. The petitioner/Society is however, aggrieved of the levy of Rs.1,01,84,244/- at Serial No.5 which NC: 2025:KHC:13299 is interest claimed from 17.06.2021 to 30.09.2024 and 18% interest on GST.

Learned counsel submits that as stated earlier, the application was given by the petitioner/Society on 28.02.2021 and for no default of the Society such interest should be levied by the respondent. In this regard, a representation has been given by the petitioner/Society at Annexure-S dated 31.12.2024 seeking relaxation on the payment of interest.

There is substance in the submission made by the learned counsel for the petitioner. If timely action was taken by the respondent on the application given by the petitioner/Society on 02.08.2021, question of payment of interest would not have arisen.

Consequently, Writ Petition stands disposed of with a direction to the 3rd respondent/Estate Officer and the 2nd respondent/Commissioner of Bangalore Development Authority to consider the representation dated 25.10.2024 at Annexure-R given by the petitioner and pass necessary orders, in the light of the observations made by this Court hereinabove and in accordance with law. NC: 2025:KHC:13299 The entire action shall be completed as expeditiously as possible and at any rate, within a period of two months from the date of receipt of copy of this Order.

Needless to observe that till a decision is taken by the respondents, no precipitative action shall be taken against the petitioner/Society regarding the payment of interest. (R DEVDAS) JUDGE

BNV List No.: 1 Sl No.: 8

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.