TaxTMI 
TaxTMI 
2026 (8) TMI 977
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....ent No.5. The petitioners have sought for an order or mandamus to direct the respondent Nos. 3 and 5 to issue the sanction plan for construction of a multistoried building. They have also sought for a direction to declare that the ground rent, scrutiny fee etc., levied on the basis of the market value of the property, as per the guideline value fixed under Section 45(B) of the Karnataka Stamp Act, 1957 is bad in law and to declare that the upfront levy of labour welfare cess is bad in law. They have also sought for a declaration that respondent No. 3 has no authority to impose/levy fee on the basis of market value of property fixed under Section 45(B) of the Karnataka Stamp Act, 1957, unless Bangalore Mahanagara Palike Building Bye-laws, 2003, is suitably amended and approved by the State Government and appropriate notification is issued allowing the respondent No. 3 to assume responsibilities of the respondent No.4. They have also sought to declare that the authority to collect the taxes under the guise of collection of scrutiny fee and labour welfare cess under various heads without sanction of the State Government, is illegal. They have sought for a declaration that the ground r....
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....s of collection of ground rent and other fees for sanction of plan. The validity of the Circular dated 04.09.2015 came up for consideration before this Court in W.P.No.4601/2020 and connected petitions and the said Circular was quashed. (ii) He contends that respondent No. 3 issued a Circular bearing No. BDA/Commissioner/T-274/2015-16 dated 16.10.2015 adopting the Circular dated 04.09.2015 issued by it and thereby adopted the fees stipulated by respondent No.4 fixing ground rent, scrutiny fee etc., payable in respect of obtaining sanction plan for construction of residential and commercial buildings. (iii) He contends that petitioners were called upon to pay a sum of Rs.4,43,00,450/- towards ground rent, development fee, security deposit, labour welfare fund contribution, scrutiny fee, development fee etc., He contends that there is no provision under the Bangalore Development Authority Act, 1976 authorising respondent No. 3 to collect ground rent. (iv) He contends that Section 3 of the Building and other Construction Workers' Welfare Cess Act, 1996 (henceforth referred to as 'Cess Act') deals with levy and collection of cess at such rate....
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....n 45B of the Karnataka Stamp Act, 1957 that too using incorrect guideline value figures. He contends that the scrutiny fee looses the character of regulatory fee once it is linked to the value of the property and not to the services rendered. Hence, he contends that the levy of scrutiny fee is unreasonable, expropriatory and excessive. (ix) As regards security deposit, he contends that under the Bangalore Mahanagara Palike Building Bye-laws 2003, provision is made in clause 4.1.5 to collect security deposit which shall be refunded after two years after completion of the construction as per the approved plan. He contends that under the aforesaid clause, the authorities are entitled to collect security deposit of Rs.25/- per square meter of floor area. However, the respondent No.5 has demanded security deposit at the rate of Rs.50/- per square meter of total area, which is impermissible and therefore, expropriatory and illegal. He also contends that there is no supply of goods or provision of service in sanctioning the plan and hence, the demand of GST is also illegal. Further, he contends that there is no element of quid pro quo by respondent No. 3 when the demand is in the....
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.... considered the submissions of the learned counsel for the petitioners as well as the learned counsel for respondent Nos. 3 and 5. 6. (i) Under Section 29 of the Bangalore Development Authority Act, 1976, the respondent No. 3 is entitled to exercise power of a Commissioner of a Municipal Corporation under the Karnataka Municipal Corporations Act, 1976, after a notification is issued to that effect by the State Government. There are no provisions under the Bangalore Development Authority Act, 1976 that authorize it to collect ground rent, scrutiny fee, security deposit etc., The authority has imposed these charges, apparently in view of the BBMP imposing such charges. A Co-ordinate Bench of this Court in Mr.Sunderam Shetty, referred supra, has held categorically as follows: "30. Therefore, there is no power under Act to impose the impugned levies i.e., ground rent, licence fee, building licence fee, scrutiny fee and security deposit. It is trite that fee can be imposed only if there is quid pro quo. Quid pro quo in legal parlance is that 'fee' that can be imposed for a service that is rendered. The principle of quid pro quo or a fee chargeable for a service rende....