M/S Pavithra Constructions Private Limited vs. The State Of Karnataka

Facts

The petitioner, M/s. Pavithra Constructions Private Limited, filed a writ petition challenging various provisions of the Karnataka Town and Country Planning Act, 1961, and related notifications, circulars, and government orders. Specifically, the petitioner sought to quash Section 18-A(i) and (iv) of the Act, inserted by Karnataka Act No. 23 of 2004, as well as Rules 37-A and 37-C inserted by a notification dated 25.02.2020. The petition also challenged circulars issued by the Bruhat Bengaluru Mahanagara Palike (BBMP) dated 04.09.2015 and 14/08/2020, and government orders dated 18.01.2007 and 28.02.2007. A demand notice dated 12.02.2021 from the BBMP, demanding various charges including ground rent, GST on ground rent, betterment charges, license fees, scrutiny fees, and various cesses and surcharges, was also challenged as illegal and without jurisdiction. The petitioner sought a modified sanction plan without these demands.

Held

The Court allowed the writ petition. It upheld the imposition of labour cess under the Welfare Cess Act but quashed the demand for its upfront payment as per the Government Orders dated 18.01.2007 and 28.02.2007. The Court clarified that the State or BBMP are not precluded from bringing in impugned levies by making suitable amendments to the Act and Rules. Petitioners who had deposited amounts in terms of interim orders were entitled to a refund. For those who had paid under protest, refund was contingent on the amounts not having been collected from consumers. For all other payments made, petitioners were at liberty to make representations to the BBMP, which would consider refund requests in accordance with law and the court's findings. The BBMP was directed to pass appropriate orders on such representations within 12 weeks of their receipt. The Court's decision was based on a co-ordinate bench's ruling in MR.SUNDERAM SHETTY VS. STATE OF KARNATAKA.

Key Issues

1. Whether Section 18-A(i) and (iv) of the Karnataka Town and Country Planning Act, 1961, as amended, and the inserted Rules 37-A and 37-C, are ultra vires the Constitution and liable to be quashed. The petitioner argued that these provisions and rules impose illegal levies and are arbitrary. 2. Whether the circulars and government orders issued by the respondents, which led to the demand notice, are legally sustainable. The petitioner contended that the demands made under these were illegal, without jurisdiction, and arbitrary. 3. Whether the demand notice dated 12.02.2021, demanding various charges including ground rent, GST on ground rent, betterment charges, license fees, and various cesses and surcharges, is valid. The petitioner argued that these demands were illegal and without jurisdiction. The respondents, represented by the State and the BBMP, did not appear to have filed any specific arguments recorded in the judgment, as the court referred to a co-ordinate bench's decision in a similar case.