HC rules property tax applies post-occupancy certificate

18 Dec 2023 CW Team

The high court has observed that property tax on a building can only be imposed after its completion, until which time the levy applies solely to the vacant or open land. In response to the petition filed by M/s BM Habitat, Justice Suraj Govindaraj has directed the Mysuru City Corporation to collect property tax for the petitioner's multiplex building on Vinobhanagar Road, Jayalakshmipuram, starting from April 25, 2011?the date when the occupancy certificate was issued.

The building had received plan sanction on January 18, 2006, and a commencement certificate on May 3, 2007. Despite completing construction on December 2, 2010, the occupancy certificate was only granted on April 25, 2011. Subsequently, on May 2, 2015, the city corporation issued a notice demanding property tax payment from January 17, 2008, citing the expiration of the two-year validity of the sanctioned plan.

Despite a high court order for reconsideration on February 16, 2018, the city corporation persisted in its demand for property tax from January 17, 2008, leading to further legal proceedings. The petitioner explained that construction was delayed until July 2010 due to the necessity of obtaining a no-objection certificate from the deputy commissioner for operating a multiplex and the delayed issuance of fire clearance. The occupancy certificate, crucial for property tax eligibility, was finally granted on April 25, 2011.

Justice Suraj Govindaraj acknowledged a significant delay on the part of the corporation in inspecting the property and issuing the occupancy certificate. Emphasising that there is no evidence showing the petitioner's use or occupation of the property before the certificate's issuance, the judge stated that property tax applies only after completion, post-occupancy certificate issuance.

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