Karnataka High Court
M/S Fortune Five Hydel Projects Private ... vs The State Of Karnataka on 23 April, 2024
Author: V Srishananda
Bench: V Srishananda
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NC: 2024:KHC-K:3197
WP No. 203814 of 2017
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 23RD DAY OF APRIL, 2024
BEFORE
THE HON'BLE MR. JUSTICE V SRISHANANDA
WRIT PETITION NO. 203814 OF 2017 (LB-TAX)
BETWEEN:
M/S. FORTUNE FIVE HYDEL PROJECTS
PRIVATE LIMITED
A COMPANY INCORPORATED UNDER THE
COMPANIES ACT, 1956 HAVING ITS
REGISTERED OFFICE AT PLOT NO. 173,
3RD MAIN 11TH CROSS, DOLLARS COLONY,
RMV 2ND STAGE, BANGALORE-560094 AND
ITS CORPORATE OFFICE AT PLOT NO 1366,
ROAD NO. 45, JUBILEE HILLS,
HYDERABAD-500033, TELANGANA STATE
REPRESENTED BY ITS AUTHORISED
SIGNATORY, SRI K.SIVASANKAR,
S/O LATE SRI K.NEELAKANTAPPA
Digitally R/O D.NO 1874, WARD NO 13, INGALESHWAR
signed by ROAD, BASAVAN BAGEWADI-586203
RENUKA DIST: VIJAYAPURA
Location: ...PETITIONER
High Court
Of Karnataka
(BY SRI SACHIN M. MAHAJAN, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA
REPRESENTED BY ITS PRINCIPAL SECRETARY,
DEPARTMENT OF PANCHAYAT RAJ AND RURAL
DEVELOPMENT GOVT OF KARNATAKA, VIDHAN
SOUDHA, BANGALORE-560001.
2. ZILLA PANCHAYAT VIJAYAPUR
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WP No. 203814 of 2017
VIJAYAPUR DISTRICT-586101.
REPRESENTED BY THE CHIEF EXECUTIVE OFFICER
3. GRAM PANCHAYAT INGALESHWARA
INGALESHWARA VILLAGE,
TQ: BASAVANA BAGEWADI
DIST: VIJAYAPURA-586203.
REPRESENTED BY PANCHAYAT
DEVELOPMENT OFFICER.
4. GRAM PANCHAYAT DINDWAR
DINDWAR VILLAGE, TQ: BASAVANA
BAGEWADI, DIST: VIJAYAPURA-586203.
REPRESENTED BY PANCHAYAT
DEVELOPMENT OFFICER.
5. GRAM PANCHAYAT K.SALAWADAGI,
K.SALAWADAGI VILLAGE,
TQ: BASAVANA BAGEWADI,
DIST: VIJAYAPURA-586203.
REPRESENTED BY PANCHAYAT
DEVELOPMENT OFFICER.
6. GRAM PANCHAYAT HUNASHYAL P.B.
VILLAGE HUNASHYAL P.B.,
TQ: BASAVANA BAGEWADI,
DIST: VIJAYAPURA-586203.
REPRESENTED BY PANCHAYAT
DEVELOPMENT OFFICER.
...RESPONDENTS
(BY SRI VEERANAGOUDA MALIPATIL, HCGP FOR R1, R3 TO R6;
SRI SHIVAYOGESH N. SHIVAYOGIMATH, ADVOCATE FOR
SMT. RATNA N. SHIVAYOGIMATH, ADVOCATE FOR R2)
THIS WRIT PETITION FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A
WRIT IN THE NATURE OF CERTIORARI, OR ANY OTHER WRIT,
ORDER OR DIRECTION - A) QUASH THE GAZETTE
NOTIFICATION DATED BEARING NO.SAMVYASHE 45 SHASANA
2015 BENGALURU DATED-31.12.2015 VIDE ANNEXURE-E, IN
SO FAR AS IT IS RELATES TO LEVY OF TAX ON WINDMILLS
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WP No. 203814 of 2017
AND WTGS; B) QUASH THE THREE LETTERS BEARING NO.JA
PAMAM/GRA EE KAM/PA YAM CR-5/2016-17 DATED-26.11.2016
ISSUED BY THE RESPONDENT NO.2 THE RESPONDENT GRAM
PANCHAYATS (R3-6) VIDE ANNEXURE - D, D-1 AND D-2; C)
QUASH THE DEMAND NOTICES NUMBERING 57 ISSUED BY THE
RESPONDENT NO.3 I.E. INGALESHWAR GRAM PANCHAYAT
(THIRTY NOTICES DATED-11.07.2017), RESPONDENT NO.4
DINDWAR GRAM PANCHAYAT (TWELVE DEMAND NOTICES
DATED- 24.06.2017 AND 27.06.2017), RESPONDENT NO.5
KUDRI SALWADGI GRAM PANCHAYAT (NINE DEMAND NOTICES
DATED- 20.05.2017), RESPONDENT NO.6 HUNSHYAL P.B.
GRAM PANCHAYAT I.E. (SIX DEMAND NOTICES DATED-
09.06.2017), VIDE "ANEXURE-F TO F-56" ETC.
THIS WRIT PETITION IS COMING ON FOR FURTHER
ARGUMENTS THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
Heard learned counsel Sri Sachin M. Mahajan for the petitioner, learned High Court Government Pleader Sri Veeranagouda Malipatil for respondent Nos.1, 3 to 6 and learned counsel Sri Shivayogesh N. Shivayogimath for Smt.Ratna N. Shivayogimath for respondent No.2.
2. The writ petition is filed with the following prayers:
a) Quash the gazette notification dated bearing NO.SAMVYASHE 45 SHASANA 2015 Bengaluru dated 31.12.2015 vide Annexure-E, in so -4- NC: 2024:KHC-K:3197 WP No. 203814 of 2017 far as it is relates to levy of tax on windmills and WTGS.
b) Quash the three letters bearing No.Ja Pan Am/Gra Ee Kam/Pa Yam Cr-5/2016-17 dated-
26.11.2016 issued by the respondent no.2 the respondent Gram Panchayats (R3-6) vide Annexure - D, D-1 and D-2.
c) Quash the demand notices numbering 57 issued by the respondent No.3 i.e. Ingaleshwar Gram Panchayat (thirty notices dated 11.07.2017), respondent No.4 Dindwar Gram Panchayat (twelve demand notices dated 24.06.2017 and 27.06.2017), respondent No.5 Kudri Salwadgi Gram Panchayat (nine demand notices dated- 20.05.2017), respondent No.6 Hunshyal P.B. Gram Panchayat i.e. (six demand notices dated-09.06.2017), vide "Annexure-F to F-56".
d) Pass such other orders as this Court deems fit and proper in the facts and circumstances of the case, in the interest of justice and equity."
3. The facts of the case are as under:
The petitioner, which is a registered Company is in the business of power generation through windmill and -5- NC: 2024:KHC-K:3197 WP No. 203814 of 2017 such other alternate sources. For generation of the power through windmill, wind power projects consist of several Wind Turbine Generators (hereinafter referred to as 'WTG' for short). Each WTG is installed as per the design and standard stipulated by the expert bodies so as to turn out the maximum electricity generation and such expert bodies are recognized by the Ministry of New and Renewable Energy, Government of India.
4. The petitioner has developed the wind project consisting of 57 WTGs situated in Ingaleshwara, Dindwar, K.Salawadagi and Hunashyal P.B. Gram Panchayat limits. The WTGs have been commissioned during the year 2013- 15 for supplying environmental friendly wind power to State and private parties as per the provisions of the Electricity Act, 2003.
5. The Gram Panchayat had levied tax on the said WTGs and the same was being paid by the petitioner. By virtue of the amendment to the Karnataka Gram Swaraj and Panchayat Raj Act, 1993 (for short 'the Act') especially -6- NC: 2024:KHC-K:3197 WP No. 203814 of 2017 to Schedule-IV to Section 199 of the Act, the Gram Panchayat demanded additional tax. Those demand notices are at Annexures-F to F56. Such demand made by the Gram Panchayat is called in question in this writ petition.
6. Learned counsel for the petitioner reiterating the grounds urged in the writ petition contended that imposing the additional tax on the WTGs has resulted in miscarriage of justice and it is arbitrary and therefore, sought for allowing the writ petition.
7. Per contra, learned counsel for respondent No.2 supports the demand at Annexures-F to F56.
8. Learned High Court Government Pleader also supports the demand made by the Gram Panchayat by virtue of the amendment to the schedule to Section 199 of the Act.
9. Having heard the parties, this Court perused the material on record meticulously. -7-
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10. On such perusal of the records, it is crystal clear that 57 WTGs have been established by the petitioner - Company in the aforesaid Gram Panchayat limits is not in dispute.
11. The Gram Panchayat was entitled to levy tax on the establishment of the WTGs as per Section 199 of the Act. In Schedule-IV to Section 199 of the Act, there is an amendment, whereby the Gram Panchayat was required to enhance the tax on the WTGs as is found in Clause 'E' in Schedule-IV. Schedule-IV is extracted hereunder for ready reference:
SCHEDULE - IV (See Section 199) Tax on Property Tax on Buildings A Tax on Buildings Rate per annum
(i) Residential buildings; Not less than 0.05% but not more than 0.10% on Capital Value of the Property.
(ii) Commercial Buildings; Not less than 0.20% but not more than 0.5% on Capital Value of the Property.
(iii) Industries, factories, IT Not less than 0.4% but not more Parks, Hardware Park, Textile than 1% on Capital Value of the Park, Bio-Tech Park, Power Property.
plants Hydro, Thermal, Solar Plants Wind Mills & Airport including connected area etc. (in -8- NC: 2024:KHC-K:3197 WP No. 203814 of 2017 the KIADB Industrial area, SEZ and other Industrial area or cones notified by the Government from time to time).
B Vacant land measuring
(a) Not more than 1000 square Not less than 0.05% but not more
meters. than 0.1% on Capital Value of the
Property.
(b) More than 1000 sq.mtrs. But Not less than 0.025% but not more
not more than 4000 sq.mtrs,. than 0.05% on Capital Value of the
Property.
(c) Vacant land measuring above Not less than 0.01% but not more
4000 sq.mtrs. than 0.02% on Capital Value of the
Property.
1
[C xxxx].
D Tax on mobile towers Twelve Thousand rupees per tower
per Annum.
E Tax on wind mill 0.5 to 1 lakh per annum depending
upon turbine.
F Tax on solar park Not less than 0.50% but not more
than 1.50% on Capital Value of the Property.
Explanations.-
1. The taxable Capital value of the property means the market value guidelines of the property published under Section 45-B of the Karnataka Stamp Act, 1957 - minus depreciation at the time of assessment as may be notified by the Government from time to time.
2. Assessment of the tax as prescribed in the Rules and rates in the schedule on capital value of the building, vacant land or both have to be made with regard to its location, type of the construction of the building, nature of its use, and age of the building and any such other criteria, as may be prescribed.
G Fee on Entertainments Fifty rupees per show.
-9- NC: 2024:KHC-K:3197 WP No. 203814 of 2017 H Vehicle Parking Fee In Rupees per day (i) Buses, Lorry, etc 50/- (ii) Car and Light Motor Vehicles 20/- (iii) Motor cycle 10/- (iv) For every other vehicle with 3/- springs (v) For every cart or other 2/- vehicle without springs (vi) For every bicycle or tricycle 1/- I Fee on markets (i) For every plot measuring not Five rupees per day more than one square meters (ii) For every additional plot of Two rupees per day one square meter or part thereof (iii) Per basket or bag of any Two rupees per day commodity (iv) Per cart load bag of any Five rupees per day commodity. J Fee on registration of cattle For every head of cattle brought Five rupees per day. for sale in shandies or fairs Fee on grazing cattle in the Five rupee per month. grazing lands. Fee on Road cutting charges for Laying charges Rs. 450/- mtr for 3 laying optical fibers cables. ducts
For additional ducts Rs.75/- mtr Supervision charges Rs.75/-mtr.
Refundable security deposit Rs.119.50/-mtr and so on.]
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12. As could be seen from the said provision, the tax on the windmill will be Rs.0.5 to Rs.1 lakh per annum depending upon the turbine. In the case on hand, on perusal of the Annexures-F to F56, the Gram Panchayat has uniformly enhanced the tax of Rs.75,000/- per year, which is the mid figure between Rs.0.5 lakh to Rs.1 lakh per year. What is the size of the turbine in all 57 WTGs and whether it would attract the maximum of Rs.1 lakh or not is not spelled out by the petitioner.
13. Further, the challenge of the petitioner is that the Gram Panchayat did not have any power to levy tax at the rate of Rs.75,000/- per year vide Annexures-F to F56.
14. The Gram Panchayat had the power to levy enhanced tax based on the amendment brought to the Schedule-IV to Section 199 of the Act. For ready reference, Section 199 of the Act is also culled hereunder:
"199. Levy of taxes, rates, etc., by Grama Panchayats.- (1) Every Grama Panchayat shall in such manner and subject to such exemptions as may be prescribed and not exceeding the maximum rate
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Provided that where an owner of the building or land has left the Panchayat area or cannot otherwise be found, the occupier of such building or land shall be liable for the tax leviable on such owner.
(2) A Grama Panchayat may levy water rate for supply of water fordrinking and other purposes.
(3) A Grama Panchayat may also levy all or any of the following taxes and fee at such rates as the Grama panchayat may by bye-laws determine but not exceeding the maximum specified in Schedule IV and in such manner and subject to such exemptions as may be prescribed, namely:-
(a) tax on entertainment other than cinematograph shows;
(b) tax on vehicles, other than motor vehicles; 2[XXX] 2
(d) pilgrim fee on person attending the jatras, festivals, etc., where necessary arrangements for water supply, health and sanitation are made by the Grama Panchayats;
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(e) market fee on persons who expose their goods for sale in any market place;
(f) fee on the registration of cattle brought for sale in any market place;
(g) fee on buses and taxies and auto-stands provided adequate facilities for the travellers by the Grama panchayat; and
(h) fee on grazing cattle in the grazing lands. 1[(i) tax and fee shall be as specified in schedule IV.
(j) such other fees as may be prescribed."
15. On close reading of the proviso to Section 199 of the Act and schedule thereunder, the Gram Panchayat had got the power to levy tax at the rate of Rs.75,000/-. In fact, as per Clause-E to the Schedule, the Gram Panchayat has got the power to levy tax at Rs.1 lakh as maximum. Further, the petitioner is also challenging the power to amend the schedule.
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16. The learned counsel for the petitioner contended that unless there is an amendment to the main provision namely, Section 199 of the Act, mere amendment to the schedule would render the power for the Gram Panchayat to levy tax. Such an argument cannot be countenanced in law for more than one reasons.
17. Firstly, the schedule has no independent existence and schedule is included in a statute in order to facilitate the main provision i.e., Section 199 of the Act. Secondly, the amendment that has been carried out to the schedule is a policy decision.
18. Petitioner is a Company, which is generating the power and making profit. The Gram Panchayat has to provide necessary infrastructure whenever WTGs are established, not only in the area which has occupied for installation of the tower which was put to non use by the Gram Panchayat but surrounding area as well should be enclosed in order to ensure the safety of the petitioner - Company and general public at all.
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19. Therefore, levying the additional tax of Rs.75,000/- per annum on WTGs vide Annexures-F to F56 cannot be faulted with.
20. In view of foregoing discussion, this Court is of the considered opinion that the grounds urged in the writ petition are hardly sufficient to grant the prayers sought for in the writ petition.
21. Hence, the following order is passed:
ORDER The writ petition stands dismissed.
No order as to costs.
Sd/-
JUDGE SRT CT:SI List No.: 1 Sl No.: 54