It is mandatory for the Bruhat Bangalore Mahanagara Palike (BBMP) to issue prior notice to the owner or occupier of properties for reopening property tax returns filed under the self-assessment scheme (SAS), either for random scrutiny of the returns or in cases of evasion of filling property tax returns, said the High Court of Karnataka.
This is among various directions issued by the court after noticing that some of the provisions of the standard operating procedure (SOP), issued by the BBMP’s Chief Commissioner in December 20203 for assessment, recovery and management of property tax and maintenance of property records, are contrary to the statutory provisions of the BBMP Act, 2020.
One of the main allegations made in hundreds of petitions filed by a large number of property tax owners questioning the legality of the recent action of the BBMP in reopening SAS returns for random scrutiny is that the BBMP had re-assessed the property tax without issuing notices to them as per the law and that the inspection of properties was conducted in their absence resulting in wrong re-assessement.
Amend SOP
Justice S. Sunil Dutt Yadav also directed the BBMP to take appropriate steps to have the SOP amended to bring it in consonance with the statutory provisions. The court issued the direction while setting aside the property tax demand notice issued by the BBMP to one of the petitioners, Shariff Constructions.
The inspection, survey, and measurement of properties for the purpose of scrutiny or evasion under Section 144 (13) of the Act can be carried out by the authorised officers of the BBMP only after issuing notice to the owner or occupier of the properties, the court made it clear.
Owners’ duty
Meanwhile, the court said that the owner or occupier is bound to furnish the necessary information required, which would be the basis for the purpose of reassessment at the time of inspection.
The court, however, said if the property owner or occupier refuses to allow the authorised officer to inspect the premises even after giving reasonable opportunity or refuses to furnish required information, such refusal shall be recorded, and the officer can proceed to assess the property to the “best of his judgment.”
Demand notices
If the BBMP, after inspection, concludes that property tax paid through SAS was incorrect or under assessed, then it can re-assess the tax and issue show cause notice demanding payment of differential tax amount, etc, the Court said while pointing out that the owner of the properties will have 30 days to either accept the demand or to file objection to it. The BBMP will have to consider and pass order on such objections within 60 days and the owners will have right to file statutory appeals against such orders, the Court said.
