Sri M R Kodandaram Vs State of Karnataka — Karnataka HC (2026) — LawSathi Research

Sri M R Kodandaram Vs State of Karnataka — Karnataka HC (2026) — LawSathi Research

What the court decided

AI extract

Outcome

Appeal dismissed, but with directions and liberty: (i) three-week extension (from 01.07.2026) to make a representation against penalty under Sections 112A(5)-(7), KMC Act; (ii) no coercive recovery steps for the penalty until the Commissioner decides the representation after hearing; (iii) petitioner to deposit tax and interest within three weeks; (iv) BBMP to allow reconciliation of the demand and then issue a fresh demand for tax, interest and penalty; (v) deposit of tax and interest within three weeks after the fresh demand; representation on penalty under sub-section (5) of Section 112(A).

Issue for consideration

Whether a uniform tax/slab can lawfully be imposed on Five-Star Hotels irrespective of their location, i.e., whether such uniform taxation violates Article 14 of the Constitution of India or the Karnataka Municipal Corporation Act, 1976 / BBMP Property Tax Rules, 2009. +1 more

Court's answer

Five-Star Hotels constitute a separate, uniform and distinct class irrespective of their location; applying a uniform slab/tax on such hotels does not violate Article 14 of the Constitution of India; accordingly, the appeal lacks merit.

Ratio / Principle

Classification of persons for the purpose of imposing tax can be done and tested on the anvil of Article 14 of the Constitution of India; if no intelligible differentia is discernible in the classification, the classification would be against Article 14.

Key takeaways

Since the petitioner was before the writ Court enjoying the interim order, the 30-day period under Sections 112A(5)-(7) KMC Act for making a representation against imposition of penalty is extended by three weeks; the Commissioner shall decide the representation regarding penalty in accordance with law, considering all facts and circumstances and giving an opportunity of hearing.ratio¶55
Until the Commissioner decides the representation regarding the penalty, no coercive steps shall be taken against the petitioner for recovery of the penalty amount.ratio¶60
Directions on compliance: petitioner shall deposit the tax amount and interest levied thereon within three weeks; BBMP shall give an opportunity for reconciliation of the demand and thereafter issue a fresh demand for tax, interest and penalty; after the fresh demand, petitioner shall deposit tax and interest within a further three weeks; any representation regarding penalty is to be made before the Commissioner under sub-section (5) of Section 112(A), KMC Act.

Detailed headnote1 paragraphs

High Court of Karnataka at Bengaluru, Division Bench (D K Singh & T.M. Nadaf JJ.; oral judgment per D K Singh J.), Writ Appeal No. 1518 of 2026 (LB-BMP), decided 01.07.2026: dismissed the intra-court appeal filed under Section 4 of the Karnataka High Court Act by the owner of 'Gokula Grand Hotel & Spa' (M R Kodandaram) against the learned Single Judge's order dated 26.03.2026 in W.P.No.6466/2015, whereby the Single Judge had rejected the plea that uniform tax on Five-Star Hotels irrespective of location is impermissible. Held: Five-Star Hotels constitute a separate, uniform and distinct class irrespective of location, and applying a uniform slab/tax on them violates neither Article 14 of the Constitution of India nor the Karnataka Municipal Corporation Act, 1976 / Bruhat Bengaluru Mahanagara Palike Property Tax Rules, 2009; tax classifications are to be tested on the anvil of Article 14 (intelligible differentia). Directions: the 30-day representation window against penalty under Sections 112A(5)-(7), KMC Act extended by three weeks (petitioner having enjoyed interim orders); no coercive penalty recovery until the Commissioner decides the representation after hearing; deposit of tax and interest within three weeks; BBMP to reconcile the demand and issue a fresh demand for tax, interest and penalty.

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HC-KAR

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 1^ST DAY OF JULY, 2026

PRESENT

THE HON'BLE MR. JUSTICE D K SINGH

AND

THE HON'BLE MR. JUSTICE T.M.NADAF WRIT APPEAL NO. 1518 OF 2026 (LB-BMP)

BETWEEN:

SRI M R KODANDARAM

AGED ABOUT 64 YEARS S/O LATE M S RAMAIAH RESIDING AT GOKULA HOUSE M S RAMAIAH ROAD, GOKULA EXTENSION BANGALORE 560054

…APPELLANT

(BY SRI. S.R.KAMALA CHARAN, ADVOCATE FOR SRI. PRADEEP S SAWKAR, ADVOCATE)

Digitally signed by VASANTHA KUMARY B K Location: HIGH COURT OF KARNATAKA

AND:

STATE OF KARNATAKA DEPARTMENT OF URBAN DEVELOPMENT

VIKSA SOUDHA BANGALORE 560001 REPRESENTED BY ITS PRINCIPAL SECRETARY

THE COMMISSIONER BHRUHUT BANGALORE MAHANAGARA PALIKE NEAR HUDSON CIRCLE, BANGALORE 560002

ASSISTANT REVENUE OFFICER YESHWANTHPUR SUB ZONE YESHWANTHAPUR

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BANGALORE 560022

…RESPONDENTS

(BY SRI. S.H.PRASHANTH., ADVOCATE FOR C/R2; SRI. B.RAVINDRANATH, AGA FOR R1)

THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER DATED 26.03.2026 PASSED BY THE LEARNED SINGLE JUDGE IN W.P NO.6466/2015 BY ALLOWING THIS APPEAL AND CONSEQUENTLY ALLOWING THE WRIT PETITION IN W.P. NO.6466/2015 AS PRAYED FOR IN THE INTEREST OF JUSTICE AND EQUITY.

THIS APPEAL, COMING ON FOR PRELIMINARY HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE D K SINGH and HON'BLE MR. JUSTICE T.M.NADAF

ORAL JUDGMENT

(PER: HON'BLE MR. JUSTICE D K SINGH)

The present intra Court appeal has been filed impugning the judgment and order dated 26.03.2026 passed by the writ Court in W.P.No.6466/2015 filed by the appellant/petitioner, who is the owner of 'Gokula Grand Hotel & Spa', a Five-Star Hotel situated at Gokula Extension, HMT Road (Near BEL Circle), Bengaluru.

The parties are referred to as per their ranking before the writ Court, for the sake of convenience.

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The petitioner filed the aforesaid writ petition

seeking the following prayers:

"(a) to quash Circular bearing No.UA(Com)PR:208:2012-13 dated 07.03.2013 (Annexure-A) issued by the 2^nd Respondent;

(b) to quash Notice bearing No.ARO YPRGLPR-287/14-15 dated 08.08.2014 (Annexure-B) issued by the 3^rd Respondent;

(c) holding that Rule 3(v) of the Bruhat Bengaluru Mahanagara Palike Property Tax Rules, 2009 is ultra vires the KMC Act and unconstitutional and accordingly quash the said Rule;

(d) holding that entry 14A of Form V of the Bruhat Bengaluru Mahanagara Palike Property Tax Rules, 2009 is ultra vires the KMC Act and unconstitutional and accordingly quash the said entry;

(e) for costs of these proceedings."

The contention of the petitioner before the writ

Court was that uniform tax on Five-Star Hotels irrespective of

their location cannot be imposed. Even in respect of Five-Star Hotels, the tax has to be imposed considering the location of the hotel.

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The learned Single Judge has rejected the said contention of the petitioner in view of the judgment of this Court in SEETHA KALYANA MANDIRAM vs. STATE OF KARNATAKA AND OTHERS [2014(1) Kar.L.J 496] and the judgments of the Supreme Court in V. VENUGOPALA RAVI VARMA RAJAH vs. UNION OF INDIA AND ANOTHER [1969 AIR 1094] as well as in FEDERATION OF HOTELS AND RESTAURANTS ASSOCIATION OF INDIA vs. UNION OF INDIA [1989 (3) SCC 634]. The learned Single Judge has further placed reliance on the judgment in the case of KERALA HOTEL AND RESTAURANT ASSOCIATION AND OTHERS vs. STATE OF KERALA AND OTHERS [(1990) 2 SCC 502] .

Five-Star Hotels constitute distinct and uniform class and therefore, imposing uniform tax on Five-Star hotels irrespective of their location does not violate any of the provisions of the Karnataka Municipal Corporation Act, 1976 or Bruhat Bengaluru Mahanagara Palike Property Tax Rules, 2009. The classification of persons for the purpose of imposing the tax can be done and be tested on the anvil of Article 14 of the Constitution of India and if no intelligible differentia is

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discernible in the classification, the classification would be against Article 14 of the Constitution of India.

We are of the view that as Five-Star Hotels constitute a separate uniform and distinct class, irrespective of their location, applying uniform slab/tax on such hotels would not be in violation of Article 14 of the Constitution of India. We, therefore, find no merit in this appeal.

So far as the question of penalty is concerned, Sections 112A (5), (6) and (7) of the Karnataka Municipal Corporation Act, 1976 provide for an opportunity for the assessee to make a representation to the Commissioner within a period of 30 days. Since the petitioner was before the writ Court and he was enjoying the interim order, the period of 30 days have to be extended for three weeks from today enabling the petitioner to make a representation against imposition of penalty. The Commissioner shall decide the representation regarding the penalty in accordance with the law after taking into consideration all the facts and circumstances of the case as well as after giving an opportunity of hearing to the petitioner.

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Until the Commissioner decides the representation

regarding the penalty, no coercive steps shall be taken against the petitioner for recovery of the penalty amount.

It is needless to state that the petitioner shall deposit the tax amount as well as interest levied thereon within a period of three weeks. The BBMP to give an opportunity for reconciliation of the demand and after the reconciliation, the BBMP should issue a fresh demand regarding the tax, interest and penalty.

After the fresh demand notice is issued, the petitioner should deposit the tax and interest within a period of three weeks thereafter. However, in respect of the penalty, the petitioner should make a representation before the Commissioner as provided under sub-section (5) of Section 112(A) of the Karnataka Municipal Corporations Act, 1976.

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With the aforesaid direction and liberty, we dismiss

the appeal.

Sd/(D K SINGH) JUDGE

Sd/(T.M.NADAF) JUDGE

RKA List No.: 2 Sl No.: 3