Facts of the Case

The petitioner, Sattva Developers Pvt. Ltd., was issued a demand notice dated 05.03.2021 by the Joint Director of Town Planning (BBMP) seeking payment of Rs. 1,09,65,371, described as Ground Rent along with 18% GST. The petitioner challenged this demand under Articles 226 and 227 of the Constitution.

By the time the matter reached final hearing, the petitioner's counsel pointed to an intervening decision of the same High Court in W.P. No. 4601/2020, decided on 04.08.2021, which had declared that the very bylaws under which BBMP levied Ground Rent, License Fee, Building License Fee, Scrutiny Fee and Security Deposit were ultra vires the parent Act and consequently unenforceable.

Issues Involved

  1. Whether the demand notice for Ground Rent (and GST thereon) could survive once the underlying BBMP bylaws authorising such levies had already been declared ultra vires the parent statute in an earlier decision of the same Court.

Petitioner's Arguments

  • The demand notice was liable to be quashed in terms of the Court's earlier ruling in W.P. No. 4601/2020, which had already declared the bylaws under which Ground Rent, License Fee, Building License Fee, Scrutiny Fee and Security Deposit were levied to be ultra vires and unenforceable.
  • Amounts already deposited under interim orders of the Court should be refunded.

Respondent's Arguments

  • No independent defence of the demand notice is recorded from the BBMP respondents once the applicability of the earlier ultra vires ruling was pointed out.

Court Order / Findings

  • The Court, applying its own earlier decision in W.P. No. 4601/2020, quashed and set aside the impugned demand notice.
  • BBMP was directed to refund the amount deposited by the petitioner pursuant to the Court's interim orders dated 18.03.2021.

Important Clarification

The 18% GST figure here was simply a component of a Ground Rent demand levied under municipal bylaws that had, by the time of this hearing, already been struck down as beyond BBMP's statutory powers — the ruling is about the validity of the underlying municipal levy, not about any GST-law question. Developers facing similar Ground Rent-plus-GST demands from BBMP under the same bylaws may find this precedent, and the underlying W.P. No. 4601/2020 ruling, directly relevant.

Sections Involved

  • Bruhat Bengaluru Mahanagara Palike bylaws (governing Ground Rent, License Fee, Building License Fee, Scrutiny Fee and Security Deposit) — held ultra vires the parent Act in W.P. No. 4601/2020
  • Constitution of India, 1950 — Articles 226 and 227

Decision – In Favour of

Allowed in favour of the petitioner — the demand notice was quashed and refund of amounts deposited was directed.

Case Details

  • Court: High Court of Karnataka at Bengaluru
  • Case No.: Writ Petition No. 5499 of 2021 (LB-BMP)
  • Coram: Justice R. Devdas
  • Date of Order: 26.05.2023

Link to Download the Order

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