The High Court of Karnataka on Wednesday directed the Bruhat Bengaluru Mahanagara Palike (BBMP) not to precipitate further process based on the notices issued to a Union government-owned institute demanding payment of service charge amount of ₹3.75 crore from the past 21 years.
A Division Bench comprising Chief Justice Ritu Raj Awasthi and Justice Sachin Shankar Magadum passed the interim order on a petition filed by Indian Plywood Industries Research and Training Institute (IPIRTI), an autonomous society functioning under the Ministry of Environment, Forest, and Climate Change.
The petitioner-institute has challenged the constitutional validity of Sections 110(1)(j) and 110(2) of the Karnataka Municipal Corporations Act, 1976, and the rules governing collection of service charges from the buildings exempted from property tax in so far as applicability of these laws for the buildings owned by the Central Government.
Pointing out that the Article 285 of the Constitution exempts properties of the Union government from all taxes imposed by a State or by any authority within a State, the petitioner has claimed that levy of service charges on the buildings owned by the Centre, irrespective of their classification and use, under the powers granted in law to collect service charges from buildings exempted from payment of property tax amounts to violation of the constitutional provision.
It has been stated in the petition that the BBMP started demanding the service charge with retrospective effect from 2000-01 after the petitioner applied for khata in 2013 as khata certificate was needed to get compensation for institute’s land acquired for the metro project.
Advocate M.N. Kumar, appearing for the IPIRTI, pointed to the Bench that the BBMP had last year even locked the main gates of the institute for not paying the service charges as demanded by the BBMP.
