Karnataka HC directs BBMP to amend SOP when reassessing property tax

Bengaluru: The high court has said that in matters regarding the reassessment of property tax, the Bruhat Bengaluru Mahanagara Palike (BBMP) has to appropriately amend the Standard Operating Procedure (SOP) to bring it in consonance with the statutory scheme. Justice S Sunil Dutt Yadav also observed that numerous petitions are being filed in the high court questioning the correctness of the procedure followed by the BBMP while reopening the self-assessment returns.

The court said that it is contended in most of the petitions filed by the property owners that the demand notice raised as well as the show cause notice issued are not preceded by the procedure stipulated under the BBMP Act. The court said that in both random scrutiny and evasion, where returns are not filed despite construction and self-assessment ought to have been filed, the procedure should follow after giving notice to the owner or occupier.

“Right is conferred upon the property owners for notice under Section 144(15)(c) of the Act where the Chief Commissioner or the Authorized Officer is required to issue a notice of reassessment to the taxpayer demanding that the tax shall be paid within 30 days of service of notice and after giving the taxpayer an opportunity of show cause in writing. This opportunity is to enable the occupier to accept the property tax assessed on the basis of the inspection which would be in the nature of reassessment and further, it is open for the property owner to accept the penalty levied or object to such reassessment proceedings within 30 days from the date of receipt of a copy of the notice under Section 144(15)(c) of the Act,” the court said.

The court also noted that the entire procedure as provided under sections 144(13), (14) and (15) is however subject to the point of limitation provided under Section 144(16).

“Section 144(16) of the Act provides that assessment or reassessment shall not be made (i) Five years after the filing of tax returns under Section 144 of the Act, (ii) Five years after the evidence of facts, sufficient in the opinion of the Chief Commissioner or Authorized Officer justifying making of reassessment comes to such officer’s knowledge, whichever is later,” the court said.

In the case at hand, the court set aside the demand notice and said the BBMP is at liberty to take further steps in terms of the procedure stipulated in the order.