LI Network
Published on: December 18, 2023 at 13:32 IST
The Karnataka High Court, presided over by Justice Suraj Govindaraj, has nullified a demand notice issued by the Bruhat Bengaluru Mahanagara Palike (BBMP) for retrospective property tax dating back to 2008.
The court’s ruling was grounded in the assertion that the property becomes subject to taxation only upon the issuance of an Occupancy Certificate, which, in this case, occurred on April 25, 2011.
The petitioner, M/s B M Habitat, successfully argued before the single-judge bench that the construction was completed in July 2010. Due to a delay in obtaining fire clearance, an application for an occupancy certificate was submitted on July 5, 2010.
Subsequently, another application was made on December 2, 2010, leading to an inspection and the eventual issuance of the occupancy certificate on April 25, 2011.
The BBMP contended that the completion date mentioned by the petitioner was inaccurate, asserting that the building was deemed complete on January 17, 2008, based on the validity of the plan sanction until that date. The corporation argued that property tax should be levied from the deemed completion date.
Rejecting the corporation’s argument, the Court highlighted that merely relying on the plan’s validity did not justify deeming the construction complete without verifying the actual status and supporting documentation.
The Court noted the significant delay in the corporation’s inspection and the subsequent issuance of the occupancy certificate, which occurred only in 2011.
The judgment emphasized that there was no evidence that the petitioner had occupied or utilized the property before the occupancy certificate was issued.
Accordingly, the Court concluded that property tax would only be applicable to the constructed building after the issuance of the occupancy certificate and directed the corporation to receive property tax starting from April 25, 2011.
