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M/S Whitefield Refractories Pvt. Ltd. v. the State of Karnataka

Karnataka HC28 Jul 2025WP/19269/2025

Case brief

AI extract

What is this about?

KIADB industrial area property tax; Gram Panchayat cannot levy property tax on industrial lands absent withdrawal notification under Section 37, Karnataka Industrial Areas Development Act, 1966 (KIAD Act); jurisdiction vests exclusively with KIADB until Section 37 notification; Chokkanahalli Village Panchayat demand notice quashed as without jurisdiction; Whitefield Refractories, Hoskote Taluk, Bengaluru Rural; assessment year 2022-23; writ under Article 226; followed W.P. No.26031/2017 and connected matters; WP No. 19269 of 2025 (LB-TAX); High Court of Karnataka; Sachin Shankar Magadum J; NC: 2025:KHC:28978.

What did the court decide?

The impugned demand notices at Annexures A and B were quashed. ¶45

M/S Whitefield Refractories Pvt. Ltd. Vs the… — Writ and Judicial Review | Karnataka HC (2025)

What the court decided

AI extract

Outcome

The impugned demand notices at Annexures A and B were quashed.

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Issue for consideration

Whether the Gram Panchayat has the authority to levy property tax on industrial lands that continue to fall within the administrative and legal purview of KIADB.

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Ratio / Principle

Property tax demand notices issued by Gram Panchayats in respect of industrial lands in a KIADB-governed notified industrial area are unsustainable in the absence of a specific enabling statutory provision or a withdrawal notification under Section 37 of the KIAD Act; this Court has consistently quashed such notices in analogous matters.

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Key takeaways

Until an express notification by the State effects a statutory withdrawal of the industrial area (under Section 37 of the KIAD Act), jurisdiction to levy property tax continues to vest exclusively with KIADB.ratio¶37
The impugned demand issued by respondent No.3 is without jurisdiction and liable to be quashed, being squarely covered by the binding precedent in W.P. No.26031/2017 and connected matters.ratio¶39

Detailed headnote1 paragraphs

Writ petition under Article 226 filed by M/s Whitefield Refractories Pvt Ltd, absolute owner of an industrial plot in a duly notified KIADB industrial area (Chokkanahalli Village, Hoskote Taluk), against undated property tax demand notices (Annexures A and B) issued by Chokkanahalli Village Panchayat for assessment year 2022-23. Following its earlier decision in W.P. No.26031/2017 and connected matters, the Court held that unless and until the State Government issues a formal notification under Section 37 of the Karnataka Industrial Areas Development Act, 1966 withdrawing the industrial area from the jurisdiction of KIADB, the Gram Panchayat cannot levy or collect property tax on such industrial lands, and jurisdiction to levy property tax vests exclusively with KIADB. The impugned demand was found to suffer from the same legal infirmity, to be without jurisdiction, and was quashed. (Sachin Shankar Magadum, J.)

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NC: 2025:KHC:28978 WP No. 19269 of 2025

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 28^TH DAY OF JULY, 2025

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BEFORE

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THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO. 19269 OF 2025 (LB-TAX)

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BETWEEN:

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M/S WHITEFIELD REFRACTORIES PVT LTD PLOT NO.18, KIADB INDUSTRIAL AREA, CHOKKANAHALLI VILLAGE, KASABA HOBLI, HOSKOTE TALUK, BENGALURU RURAL-560 067 REP BY ITS VICE PRESIDENT, SRI NARAYANDAS R JAJU [INCORPORATED UNDER THE COMPANIES ACT, 1956] …PETITIONER

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(BY SRI. SHOWRI H.R., ADVOCATE)

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AND:

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Digitally signed by NAGARAJA B M Location: HIGH COURT OF KARNATAKA

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THE STATE OF KARNATAKA DEPARTMENT OF RURAL DEVELOPMENT AND PANCHAYAT RAJ, M.S. BUILDING, BENGALURU-560 001. REPRESENTED BY ITS PRINCIPAL SECRETARY.

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KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD NO.49, 4TH AND 5TH FLOOR, EAST WING, KHANIJA BHAVAN, RACE COURSE ROAD,

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NC: 2025:KHC:28978 WP No. 19269 of 2025

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HC-KAR

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BENGALURU-560 001. REPRESENTED BY ITS CEO AND EXECUTIVE MEMBERS.

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CHOKKANAHALLI VILLAGE PANCHAYAT CHOKKANAHALLI VILLAGE, KASABA HOBLI, HOSKOTE TALUK, BENGALURU RURAL DISTRICT-562 114. REPRESENTED BY ITS PANCHAYAT DEVELOPMENT OFFICER

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…RESPONDENTS

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(BY SRI. BOPANNA.B., AGA FOR R1; SRI. P.V.CHANDRASHEKAR FOR R2; SRI. M.S.DEVARAJU FOR R3)

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THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE UNDATED DEMAND NOTICES ISSUED ON THE PETITIONER BY HAND PRODUCED HEREWITH AT ANNEXURE A AND B RESPECTIVELY, ETC.

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THIS PETITION, COMING ON FOR FURTHER 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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ORAL ORDER

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The present petition is filed by the petitionerCompany, which is the absolute owner of an industrial plot situated within a duly notified industrial area governed by the Karnataka Industrial Areas Development Board

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NC: 2025:KHC:28978 WP No. 19269 of 2025

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HC-KAR

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(KIADB). The grievance of the petitioner arises out of the impugned Property Tax Demand Notice issued by respondent No.3 – the jurisdictional Gram Panchayat in respect of the subject property for the assessment year 2022-23. The core issue for consideration is whether the Gram Panchayat has the authority to levy property tax on industrial lands that continue to fall within the administrative and legal purview of KIADB.

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This precise question has already been

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conclusively settled by this Hon’ble Court in the case of W.P. No.26031/2017 and connected matters, wherein it

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has been categorically held that unless and until a formal notification is issued by the State Government under Section 37 of the Karnataka Industrial Areas Development Act, 1966 (for short, "the KIAD Act"), withdrawing the particular industrial area from the jurisdiction of KIADB, the Gram Panchayat cannot usurp the authority to levy or collect property tax in respect of such industrial lands. The Court in the said decision has emphasized that the

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NC: 2025:KHC:28978 WP No. 19269 of 2025

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HC-KAR

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jurisdiction to levy property tax continues to vest exclusively with KIADB until such a statutory withdrawal is effected through an express notification by the State.

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Further, in a series of analogous matters

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involving identical factual and legal issues, this Hon’ble Court has consistently quashed similar tax demand notices issued by various Gram Panchayats, holding them to be unsustainable in the absence of a specific enabling statutory provision or a withdrawal notification issued under Section 37 of the KIAD Act. In the present case as well, the impugned tax demand notice suffers from the same legal infirmity and is squarely covered by the binding precedent cited above. Therefore, the issuance of the impugned demand by respondent No.3 is without jurisdiction and liable to be quashed.

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