Service charge

Union government owned institute moves to High Court after BBMP demands service fee

On Wednesday, the Karnataka High Court ordered the Bruhat Bengaluru Mahanagara Palike (BBMP) not to speed up the proceedings based on notices issued to a Union government-owned institute demanding the payment of an amount of service fee of ₹3.75 crore from the last 21 years.

A divisional bench consisting of Chief Justice Ritu Raj Awasthi and Justice Sachin Shankar Magadum passed the interim order on a petition filed by the Indian Plywood Industries Research and Training Institute (IPIRTI), a standalone company under the Ministry of Environment, Forests and Climate Change.

The applicant institute challenged the constitutional validity of Sections 110(1)(j) and 110(2) of the Karnataka Municipal Corporations Act 1976, and the rules governing the levying of service charges from exempt buildings. property tax insofar as applicability of these laws to buildings owned by the central government.

Pointing out that Section 285 of the Constitution exempts Union Government properties from all taxes imposed by a State or by any authority within a State, the petitioner asserted that the levying of charges on property owned to the Centre, regardless of their classification and use, within the framework of the powers conferred by law to collect rental charges from buildings exempt from the payment of property tax amounts to a violation of the constitutional provision.

It was stated in the petition that the BBMP started charging the service fee retroactively from 2000-01 after the petitioner applied for the khata in 2013 because a khata certificate was required to obtain compensation for the land of the institute acquired for the metro project.

Lawyer M. N. Kumar, representing IPIRTI, pointed out in the House that the BBMP even locked the main gates of the institute last year for not paying service fees as demanded by the BBMP.