Central air-conditioning costs tech park an extra ₹83 crore
FollowThe Karnataka High court on Wednesday dismissing a plea filed by Manyata Tech Park and ordered it to pay an additional ₹83.45 crore as differential tax based on a rule that allows categorisation of non-residential buildings based on facilities such as ‘centrally air-conditioned’.
A High Court bench headed by Justice L. Narayana Swamy dismissed the petition by M/s Manyata Promoters Pvt., Ltd, which questioned the notices issued by Bruhat Bangalore Mahanagara Palike (BBMP) in 2015 demanding the payment of the differential tax. The petitioner had paid property tax at ₹8 per square foot through the Self Assessment Scheme from 2008-09 to 2015-16.
However, in 2014, the Principal Accountant General pointed out that the BBMP should have collected tax from Manyata at ₹10 per square foot as the tech park comes under the category of ‘centrally air-conditioned non-residential buildings’. Following this, three notices were issued to Manyata to pay the revised tax.
As the petitioner did not respond, the BBMP then issued demand notices seeking a payment of a total ₹83,45,16,845. The petitioner had contended that BBMP had no power to make a fiscal demand or levy tax classifying the buildings as centrally air-conditioned.
The High Court while delivering the verdict observed that "this is rationality based classification strictly in compliance of Article 14 of the Constitution."
The court also said "a fraud or misrepresentation or illegality can be unearthed at any stage" as it was the petitioner’s fault, who opted for paying tax in a lower category though the petitioner knew that the buildings were centrally air-conditioned.
