BBMP can’t ask property owners to deposit 50% of re-assessed tax amount even to consider their objection for re-assessment: Karnataka High Court

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The Bruhat Bengaluru Mahanagara Palike (BBMP) prima facie cannot ask property owners to deposit 50% of the re-assessed property tax amount for considering their objections raised for the showcause notices demanding payment of tax as per re-assessement, said the High Court of Karnataka.

Also, the court directed the Chief Commissioner of the BBMP to take appropriate steps in this regard while pointing out that the court has come across several petitions complaining about the demand for depositing 50% of the re-assessed tax amount as per the Standard Operating Procedure (SOP), issued by the Commissioner, even though Section 144(15) of the BBMP Act does not contemplate depositing 50% of tax for considering objections on re-assessment.

Justice S. Sunil Dutt Yadav passed the interim order on a petition filed by M/s Gopalan Enterprises, questioning the legality of the demand for payment of the difference amount of ₹29.54 crore as property tax for Gopalan Mall, made by the BBMP in October, 2023 and on January 22, 2024, for the period from 2008-09 to 2023-23 after re-assessing the property without issuing notice to the petitioner.

Also, the petitioner had challenged the notice issued by the Assistant Revenue Officer on February 15 to pay 50% of the differential amount even for considering the objection filed by the petitioner to the notice, through which demand for payment of differential amount was made based on a SOP issued by the Chief Commissioner for assessment, recovery and management of property tax and property card.

The petitioner has alleged that the BBMP officers are harassing them on payment and threatening to close down their business activities without even considering their objections and re-assessment made in 2015 by the BBMP officers.

The court prima facie said that provision made in the SOP for depositing 50% amount even to consider objection of the property owner to the notice cannot stand legal scrutiny as such provision is absent in Section 144(15) of the Act, which deals with process for re-assessment or scrutiny of property.

The property owners are required to deposit 50% of the demanded tax only for filling statutory appeals against the final order passed by the BBMP under Section 144 (15) (e) of the Act, conforming the re-assessment after considering the objections of the property owners, the court observed, while staying the notice issued asking the petitioner to deposit 50% of the demanded amount.

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