The High Court of Karnataka has declared that the Bruhat Bangalore Mahanagara Palike (BBMP) has no power in law to levy lake rejuvenation fee and also cannot demand payment of labour welfare cess upfront while approving building plans.
Justice M. Nagaprasanna delivered the verdict while hearing petitions by landowners, real estate developments, and others challenging the BBMP’s bylaws related to levy of building plan, scrutiny, ground rent, and lake rejuvenation fees levied for building plan sanction.
“Imposition of lake rejuvenation fee invoking Section 18(1)(A) of the Karnataka Town and Country Planning Act is impermissible as it is imposed by way of a circular dated January 27, 2017,” the court, while pointing out that the Act “not even remotely authorises the BBMP to expressly or impliedly charge or levy lake rejuvenation fee.” “It is to be noticed that lake rejuvenation fee is not imposed in terms of the Act, but on the strength of a circular dated January 27, 2017. When the Act itself is not authorising charge of any fee of the kind that is charged by the BBMP, the circular can hardly generate power to impose such fee,” the court observed.
The KTCP Act empowers the planing authority to impose cess for carrying out water supply scheme, a surcharge for formation of ring road, a cess for the purpose of improving slums, a surcharge for establishing mass rapid transport system while grating permission for development of land or building, the court noticed.
The court also said that neither the State government nor the BBMP have the power to demand upfront payment of cess under the provisions of the Building and Other Construction Workers’ Welfare Cess Act, 1996, as the Act and the Rules lay down procedure for payment of cess.
“It is this Government Order [of February 28, 2007] that is the fly in the ointment as a demand upfront is made by the State through the BBMP for payment of cess. This runs completely counter to the Act and the Rules, which nowhere mandate that payment of labour cess should be paid upfront,” the court said.
The court also made it clear that petitioners are not required to pay cess upfront before construction takes place but would not escape such payment as mandated under the Act and as such the demand of cess by the BBMP being valid but only the demand of it upfront is invalid.
