Karnataka High Court Stays ₹67 Crore BBMP Property Tax Demand Against Hindustan Unilever

The Karnataka High Court has issued a stay on a ₹67 crore property tax demand by the Bruhat Bengaluru Mahanagara Palike (BBMP) against Hindustan Unilever Limited (HUL), marking a significant development in the ongoing disputes between property owners and the municipal corporation over retrospective tax assessments.

HUL challenged the BBMP's demand, contending that the reassessment of property tax was conducted without adhering to due process and statutory provisions. The company argued that the BBMP failed to provide a proper show cause notice and did not allow adequate time for response, thereby violating principles of natural justice. Furthermore, HUL asserted that the reassessment was time-barred under Section 144(16) of the BBMP Act, which stipulates a five-year limitation period for such actions.

Justice S. Sunil Dutt Yadav, presiding over the case, observed that the BBMP's insistence on an upfront payment of 50% of the disputed tax amount before considering objections was not tenable. The court emphasized that such a requirement is applicable only at the appellate stage, not during the initial response to a demand notice. Consequently, the court stayed the BBMP's demand and directed the municipal body to refrain from taking coercive action against HUL until further orders.

This case is part of a broader pattern wherein numerous property owners have approached the Karnataka High Court, challenging the BBMP's retrospective tax demands. Many petitioners have raised concerns about the lack of proper notices, arbitrary assessments, and the imposition of penalties without due process. The court has, in several instances, directed the BBMP to conduct joint inspections with property owners and to adhere strictly to the procedures outlined in the BBMP Act.

The High Court's intervention underscores the necessity for municipal authorities to follow legal protocols and respect taxpayers' rights. It also highlights the judiciary's role in ensuring that administrative actions are conducted within the framework of the law, providing relief to entities like HUL facing substantial and potentially unjustified financial demands.