Case Law Details
B M Habitat Vs Commissioner (Karnataka High Court)
Demand of Property Tax was unjustified before issuance of Occupancy Certificate as it was on completed/constructed building not on vacant land
Conclusion: Demand of property tax was unjustified as the use of the property having commenced only post the occupancy certificate having been issued, the property being used for the benefit of assessee only thereafter it was only then that the building would become eligible for tax since the application of the property tax was on the building once completed and until then the incidence of property tax would only be on the vacant/open land and not on the constructed building.
Held: Assessee was aggrieved by the demand made by the respondent – Corporation for payment of property tax calculated from 17.01.2008 on the ground that the building was completed on that date even though the Occupancy Certificate came to be issued on 25.04.2011. Assessee claimed to be the owner of the property situated at Vinobhanagar Road, Jayalakshmipuram, Mysuru. Assessee having applied for sanction plan, such a sanction was issued and the commencement certificate in terms of the applicable Building Bye-law came to be issued on 03.05.2007. Thereafter, assessee commenced the construction and submitted an application on 02.12.2010 for issuance of occupancy certificate, which came to be issued on 25.04.2011. Subsequent thereto, the respondent – Corporation called upon assessee to make payment of property tax which came to be challenged by assessee before this Court in W.P.No.21481/2015 and this Court vide its order permitted assessee to furnish his explanation to the said demand which was directed to be considered by the Corporation and necessary orders to be passed thereon and until then, the respondent was restrained from taken any further steps. The short question that would arise for consideration was as to from when the property tax was required to be payable on the property and could there be a deeming fiction taken into consideration by the Corporation to contend that the building was ready for levy of property tax? It was held that there was considerable delay on part of the Corporation also in inspecting the property and issuing an occupancy certificate. This delay also could not be made use of by the Corporation to shift the date of completion of the construction and/or occupancy. There was no document placed on record that assessee had occupied or used the property prior to the occupancy certificate. The use of the property having commenced only post the occupancy certificate having been issued, the property being used for the benefit of assessee only thereafter it was only then that the building would become eligible for tax since the application of the property tax was on the building once completed and until then the incidence of property tax would only be on the vacant/open land and not on the constructed building. In that view of the matter, no deemed fiction could be made use of by the Corporation to insist that the building was ready by the date on which the plan expired. If at all the construction had not been completed by the date on which the plan expired or that the building was constructed thereafter, it would have been available for the Corporation to take necessary action at that point of time which could not also now be taken due to lapse of time. Thus, looked at from any angle, the action on part of the Corporation was completely unjustified.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
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