Allowed¶56

Cherubs Trust v. the State of Karnataka

Karnataka HC22 Jul 2025WP/15030/2022

Case brief

AI extract

What is this about?

Property tax exemption of private educational institutions; Bruhat Bengaluru Mahanagara Palike Act 2020; Sections 144 and 152; Section 152(1)(i)(b) amended 10.03.2023; Article 14 equality challenge; Article 226 writ (LB-TAX); circular dated 29.03.2021 (Annexure-D) already quashed; demand notice dated 22.06.2022 (Annexure-E) quashed on parity; Cherubs Trust; Harvest Cherubs Montessori; W.P. No.12954/2021 relied on; BBMP Bommanahalli Assistant Revenue Officer; Karnataka High Court.

What did the court decide?

Writ petition allowed; the impugned demand notice issued by respondent No.3 as per Annexure-E is quashed and set aside (described as dated 22.06.2022 at ¶29/¶53 and as dated 22.06.2023 in the operative order at ¶60). ¶56

Cherubs Trust Vs the State of Karnataka — Writ and Judicial Review | Karnataka HC (2025)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether private educational institutions established and administered within the jurisdiction of BBMP are liable to pay property tax under the Bruhat Bengaluru Mahanagara Palike Act, 2020, and whether Sections 144 and 152 of the Act, insofar as they impose such liability, are violative of Article 14 of the Constitution of India (prayers (1) and (2)). +2 more

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Court's answer

In view of the authoritative pronouncement of the Co-ordinate Bench in W.P. No.12954/2021 and the State's 2023 legislative amendment clarifying and reaffirming the exemption through changes to Section 152 of the Act, prayers (1) and (2) sought in the writ petition do not survive for adjudication.

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Ratio / Principle

The legislative amendment now explicitly brings private educational institutions within the purview of the exemption clause, thereby exempting them from the liability to pay property tax under the Bruhat Bengaluru Mahanagara Palike Act, 2020.

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Key takeaways

The circular dated 29.03.2021 impugned in these proceedings has already been quashed by the Co-ordinate Bench in W.P. No.12954/2021; accordingly, this Court need not undertake a separate declaration regarding its validity or arbitrariness, the legal position standing settled.ratio¶49
The demand notice dated 22.06.2022 issued to the petitioners, being admittedly based on the quashed circular dated 29.03.2021, is unsustainable in law and is liable to be quashed on the ground of parity, the petitioners being similarly placed as a private educational institution and a charitable trust.ratio¶53

Detailed headnote1 paragraphs

High Court of Karnataka (Sachin Shankar Magadum, J.), by oral order dated 22.07.2025, allowed W.P. No. 15030 of 2022 (LB-TAX) filed by Cherubs Trust and Harvest Cherubs Montessori. Relying on the Co-ordinate Bench judgment in W.P. No.12954/2021 and taking judicial notice of the 2023 legislative amendment to Section 152 of the Bruhat Bengaluru Mahanagara Palike Act, 2020 (substituting Section 152(1)(i)(b) to cover 'education institutions established for the purpose of education, recognized by the government or local authority'), the Court held that the prayers for declaration that private educational institutions within BBMP are not liable to property tax, and that Sections 144 and 152 violate Article 14, do not survive for adjudication; the circular dated 29.03.2021 (Annexure-D) had already been quashed, obviating any separate declaration. The demand notice dated 22.06.2022 issued by respondent No.3 (Annexure-E), admittedly founded on the quashed circular, was held unsustainable and quashed on grounds of parity.

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NC: 2025:KHC:27826 WP No. 15030 of 2022

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22^ND DAY OF JULY, 2025

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BEFORE

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THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO. 15030 OF 2022 (LB-TAX)

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BETWEEN:

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CHERUBS TRUST

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SY NO. 50/2 B M HARVEST SOMPURA GATE, SARJAPUR ROAD ANEKAL TALUK, BANGALORE - 562 125. REPRESENTED BY ITS MANAGER AND AUTHORIZED SIGNATORY MR. K B SURESH, S/O K BHASKAR NAIDU AGED 41 YEARS, REGISTERED UNDER THE INDIAN TRUST ACT, 1882.

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Digitally signed by KAVYA R Location: High Court of Karnataka

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HARVEST CHERUBS MONTESSORI NO.173, 9TH MAIN, 7TH SECTOR, HSR LAYOUT, BANGALORE - 560 102, REPRESENTED BY ITS MANAGER AND AUTHORIZED SIGNATORY MR. K.B. SURESH S/O K. BHASKAR NAIDU, AGED 41 YEARS. REGISTERED UNDER THE INDIAN TRUST ACT, 1882.

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…PETITIONERS

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(BY SRI. GOUTHAM A.R, ADVOCATE)

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AND:

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THE STATE OF KARNATAKA REP. BY ITS PRINCIPAL SECRETARY

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HC-KAR

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DEPARTMENT OF URBAN DEVELOPMENT M.S. BUILDING, DR. AMBEDKAR ROAD, BANGALORE - 560 001, BY ITS COMMISSIONER.

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BRUHAT BENGALURU MAHANAGARA PALIKE, N.R. SQUARE, BENGALURU, KARNATAKA - 560 002, BY ITS COMMISSIONER.

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THE ASSISTANT REVENUE OFFICER, BBMP, BOMMANAHALLI, BENGALURU, KARNATAKA - 560 068.

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…RESPONDENTS

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(BY SMT. SPOORTHY V, HCGP FOR R1; SRI. T.M. VENKATA REDDY, ADVOCATE FOR R1 AND R2)

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THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO DECLARE THAT THE PRIVATE EDUCATIONAL INSTITUTIONS ESTABLISHED AND ADMINISTRATED WITHIN BRUHAT BANGALORE MAHANAGARA PALIKE AREA ARE NOT LIABLE TO PAY PROPERTY TAX UNDER THE BRUHAT BANGALORE MANAHANGARA PALIKE ACT 2020 AND ETC.,

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM

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HC-KAR

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ORAL ORDER

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In the captioned writ petition, the petitioners who are running an educational institution and a charitable trust seek a declaration that private educational institutions established and administered within the jurisdiction of the Bruhat Bengaluru Mahanagara Palike (BBMP) are not liable to pay property tax under the provisions of the Bruhat Bengaluru Mahanagara Palike Act, 2020 (hereinafter referred to as “the Act”). The petitioners have also sought a declaration that Sections 144 and 152 of the Act, insofar as they impose liability to pay property tax on such private educational institutions, are violative of Article 14 of the Constitution of India and therefore unconstitutional. Consequently, the petitioners challenge the validity of the circular dated 29.03.2021 issued by respondent No.2 (Annexure-D) and the demand notice dated 22.06.2022 issued by BBMP (Annexure-E).

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HC-KAR

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Heard learned counsel for the petitioners and learned counsel appearing for the BBMP. Perused the material on record.

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The learned counsel for the petitioners has placed reliance on the judgment rendered by a Co-ordinate Bench of this Court in a matter involving identical facts, wherein the circular dated 29.03.2021 was directly under challenge. Upon examination of the said judgment, it is evident that the Co-ordinate Bench, while interpreting the effect of the amended Section 152(1)(i)(b) of the Act, came to the conclusion that the impugned circular was liable to be quashed on the ground that it was contrary to the said statutory amendment. Accordingly, the Coordinate Bench not only set aside the circular but also quashed the consequential demand notice issued by the BBMP for recovery of property tax from private educational institutions.

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HC-KAR

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This Court is of the considered view that

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paragraphs 2 to 5 of the judgment in W.P. No.12954/2021 are directly relevant to the issues raised in the present writ petition. For ease of reference, the said paragraphs are extracted herein below:

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2. During the pendency of the above matter, the State Government has amended Section 152(1)(i)(b) of the BBMP Act on 10.03.2023 substituting Section 152(1)(i)(b) of the BBMP Act with the following: "the education institutions established for the purpose of education, recognized by the government or local authority".

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3. In view of the said amendment, the discrimination alleged by the petitioners against private education institutions vis-a-vis government education institutions does not survive inasmuch as all education institutions which have been recognized by the government or local authority would be entitled for exemption. Thus, a declaration which has been sought for in the above matter in respect of 152(1)(i)(b) of the BBMP Act has been violative of Article 14 of the Constitution of India does not survive for consideration.

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4. In view of the amendment, the circular which has been issued on 29.03.2021 notifying that private institutions do not have the benefit of exemption would be required to be quashed on account of Section

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HC-KAR

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152(1)(i)(b) of BBMP Act has been amended by clarifying that any institution which is recognized by the government or local authority would be entitled for exemption.

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5. The consequential prayer seeking for quashing the demand notices which have been issued by the BBMP to the petitioners in furtherance of the circular dated 29.03.2021 would also have to be quashed in view of the circular having been quashed.

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On a plain reading of paragraph No.5 of the extracted portion from the judgment in W.P.No.12954/2021, it is evident that the circular dated 29.03.2021 has been quashed by the Co-ordinate Bench, taking into consideration the amendment brought to Section 152(1)(i)(b) of the Bruhat Bengaluru Mahanagara Palike Act, 2020. The Co-ordinate Bench, while interpreting the amended provision, concluded that private educational institutions fall within the category of institutions exempted from payment of property tax and, accordingly, invalidated the circular and the consequent demand notices issued there under.

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HC-KAR

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In view of the authoritative pronouncement of the Co-ordinate Bench and taking judicial notice of the fact that the State Government has, through a legislative amendment in the year 2023, further clarified and reaffirmed the exemption granted to private educational institutions by incorporating appropriate changes to Section 152 of the Act, this Court is of the considered opinion that prayers (1) and (2) sought in the present writ petition do not survive for adjudication. The legislative amendment now explicitly brings private educational institutions within the purview of the exemption clause, thereby exempting them from the liability to pay property tax under the Act.

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It is also relevant to note that the circular dated 29.03.2021 impugned in the present proceedings has already been quashed by the Co-ordinate Bench in W.P. No.12954/2021, and therefore, this Court need not undertake a separate declaration regarding its validity or

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HC-KAR

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arbitrariness. The legal position in this regard stands settled.

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What now remains for consideration is the validity of the demand notice dated 22.06.2022 issued to the petitioners, which is admittedly based on the quashed circular dated 29.03.2021. In light of the findings recorded by the Co-ordinate Bench, and having regard to the fact that the petitioners are similarly placed being a private educational institution and a charitable trust, this Court is of the view that the impugned demand notice is also unsustainable in law and is liable to be quashed on the ground of parity.

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