- 1 - NC: 2025:KHC:3975 WP No. 2182 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR JUSTICE N S SANJAY GOWDA WRIT PETITION NO. 2182 OF 2024 (LB-BMP) BETWEEN: 1. ZURI HOSPITALITY PRIVATE LIMITED HAVING ITS REGISTERED OFFICE AT THE ZURI WHITE SANDS RESORT AND CASINO VARCA BEACH, VARCA SALETE GOA 403721. HAVING ITS CORPORATE OFICE AT THE ZURI WHITEFIELD BENGALURU 244, HOODY VILLAGE RAJAPALYA, ITPL ROAD, WHITEFIELD, BENGALURU 560 048 (PRIVATE LIMITED COMPANY REGISTERED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956) REPRESENTED BY ITS AUTHORISED REPRESENTATIVE SHRI ASHISHKUMAR SHAH S/O SHRI ASHWINKUMAR SHAH AGED 44 YEARS HAVING OFFICE AT 244, HOODY VILLAGE, RAJAPALYA ITPL ROAD, WHITEFIELD BENGALURU 560 048. …PETITIONER (BY SRI. HARISH NARASAPPA, SENIOR COUNSEL FOR SRI. AMITH NAYAK, ADVOCATE) AND: 1. THE STATE OF KARNATAKA REPRESENTED BY ITS PRINCIPAL SECRETARY DEPARTMENT OF URBAN DEVELOPMENT Digitally signed by KIRAN KUMAR R Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:3975 WP No. 2182 of 2024 M S BUILDING, DR AMBEDKAR ROAD, AMBEDKAR VEEDHI, BENGALURU 560 001. 2. THE BRUHAT BENGALURU MAHANAGARA PALIKE REPRESENTED BY ITS COMMISSIONR N R SQUARE, BENGALURU 560 002. 3. THE ASSISTANT REVENUE OFFICER BRUHAT BENGALURU MAHANAGARA PALIKE HOODI SUBDIVISION N R SQUARE, BENGALURU 560 002. 4. DEPARTMENT OF TOURISM GOVERNMENT OF KARNATAKA 4TH FLOOR/LEVEL, NO.3 EMBASSY ICON, INFANTRY ROAD, BENGALURU, KARNATAKA 560 001, REP. BY ITS DIRECTOR. 5. JOINT COMMISSIONER DEPARTMENT OF TOURISM GOVERNMENTOF KARNATAKA NO.49, 2ND FLOOR, KHANIJA BHAVAN RACECOURSE ROAD BANGALORE 560 001. 6. BANGALORE ELECTRICITY SUPPLY COMPANY LIMITED (BESCOM) THROUGH ITS MANAGING DIRECTOR CORPORATE OFFICE, BESCOM K R CIRCLE, BANGALORE 560 001. 7. ASSISTANT EXECUTIVE ENGINEER (ELECTRICTIY ) E-4 SUB DIVISION MAHADEVPURA, BESCOM BANGLAORE 560 048. 8. DEPARTMENT OF INDUSTRY AND COMMERCE GOVERNMENT OF KARNATAKA 49, KHANIJA BHAVAN - 3 - NC: 2025:KHC:3975 WP No. 2182 of 2024 SOUTH WING, RACE COURSE ROAD BENGALURU 560 001 REP. BY ITS COMMISSIONER. …RESPONDENTS (BY SRI. RAHUL CARIAPPA, AGA FOR R1, R4, R5 & R8; SRI. B L SANJEEV, ADVOCATE FOR R2 & R3; SRI. R SRINIVASA GOWDA, ADVOCATE FOR R6 & R7) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED SHOW CAUSE NOTICES DATED 22/12/2023, BEARING NOS. ARO(HOD)W-82/PR-336/2023-24 AND ARO(HOD) W-82/PR-337/2023-24 ISSUED BY THE R3 VIDE ANNEXURE-AA TO THE WP. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE N S SANJAY GOWDA ORAL ORDER 1. This writ petition is filed challenging the show-cause notices dated 22.12.2023 for the assessment years 2021-22 and 2022-23 and the impugned demand notices dated 08.01.2024 issued by the 3rd respondent. 2. By the show-cause notices, the Bruhath Bengaluru Mahanagara Palike (BBMP) has raised objections regarding the manner in which the petitioner has - 4 - NC: 2025:KHC:3975 WP No. 2182 of 2024 classified itself as ‘all industrial unit’ while filing its return and the BBMP has contended that the petitioner would have to classify itself as ‘all star hotels’ and pay property tax accordingly. The show- cause notices also stated that the petitioner had to show-cause within 15 days from the date of said notices, failing which the order of re-assessment as per the show-cause notices would be confirmed. 3. The said show-cause notices were followed by impugned demand notices dated 08.01.2024, in which, it was stated that the petitioner in spite of granting an opportunity, neither had shown cause to the notices, nor had remitted the tax demanded. 4. Being aggrieved by said show-cause notices and the demand notices, the petitioner is before this Court. 5. The petitioner is also seeking a further relief insofar as it relates to BESCOM which had applied the electricity tariff classifying the petitioner as a ‘commercial entity’ rather than treating it as an - 5 - NC: 2025:KHC:3975 WP No. 2182 of 2024 ‘industrial unit’ and the petitioner is also seeking refund of excess electricity charges collected from it. 6. The entire basis of the petitioner’s argument stems from a Government Order dated 04.03.2021. According to the petitioner, by this Government Order, the Government of Karnataka has classified all the star hotels as an ‘industry’ and it is the case of the petitioner that as per said Government Order, the petitioner, being an industry, would be entitled for all the benefits that accrued from this classification, namely a different rate at which electricity charges to be paid and also a reduced property tax. 7. The Government Order dated 04.03.2021 produced at Annexure-H does indicate as follows: “ಅದರಂೆ ಾಜದ ಆಥ ವಲಯ/ ಪಾೋದಮ ವಲಯವ ಎದುರುವ ಎಾ ಸಮೆ/ " ೋಧಗಳನು' ಪಗ( ಪಾೋದಮ )*ೇ+ಶ-ಾಲಯವ ಪಸು.ತ ಕ-ಾ+ಟಕದ2 -ೋಂದ(3ಾ4ರುವ 62 star classified hotel ಗ56ೆ 7ಾಗೂ ಮುಂ8ನ 8ನಗಳ2 -ೋಂದ(3ಾಗುವ star classified hotel ಗ56ೆ 9ೈ6ಾ9ಾ - 6 - NC: 2025:KHC:3975 WP No. 2182 of 2024 ಾ;ನ<ಾನ )ೕಡಲು ಪಾ.>ದು?, ಇದಂ*ಾ4 7ೋAೆBಗಳC "ದುಚEF. ದರ 7ಾಗೂ ಆ. ೆ6ೆಯ2 ಈ 9ೆಳಕಂಡ ಅನುಕೂಲಗಳನು' ಪHೆಯಲು ಸಮ9ಾ2ೕನ ಆಥ ೌಲಭಗಳನು' 7ೊಂ8ರುವ star classified hotel ಗಳC <ಾತ ಅಹ+ೆ 7ೊಂದುವದು. 1. "ದುಚEF. ದರ : 5 ವಷ+ಗಳ "ದುಚEF. ದರ 3ಾM (ಾ(ಜ ಬಳ9ೆ ದರ ಮತು. 9ೈ6ಾ9ೆ ಬಳ9ೆ ದರ ನಡು"ನ ವಾಸ <ಾತ) 2. ಆ. ೆ6ೆ : 5 ವಷ+ಗಳ ಆ. ೆ6ೆ 3ಾM (star classified hotel ಕಟOಡಗ56ೆ )ಗ8ಪPರುವ 7ಾಗೂ ಒಂದು 9ೈ6ಾ9ಾ ಘಟಕದ ಕಟOಡ9ೆS )ಗ8ಪPರುವ ದರಗಳ ವಾಸ) ಸದ ಪಾ.ವ-ೆಯನು' 8-ಾಂಕ 18.02.2021 ರಂದು ನHೆದ ಸTವ ಸಂಪಟ ಸUೆಯ2 ಾಜದ2 ನ star classified hotel ಗ56ೆ 8-ಾಂಕ: 01.04.2021 ಂದ "9ೈ6ಾ9ೆ" ಎಂದು ಾ;ನ<ಾನ )ೕಡಲು 7ಾಗೂ ಾ(ಜ ಮತು. 9ೈ6ಾ9ೆ ಇಾVೆMಂದ ಆ*ೇಶ 7ೊರPಸಲು ಸTವ ಸಂಪಟವ ಅನುWೕದ-ೆ )ೕP*ೆ” 8. As could be seen from the above, the Government was cognizant of the fact that by classifying five star hotels as an ‘industry’, the five star hotels would be entitled to reduced electricity charges and also reduced property tax liability. 9. Ultimately, the Government passed an order in the following terms: - 7 - NC: 2025:KHC:3975 WP No. 2182 of 2024 “ಸ9ಾ+ ಆ*ೇಶ ಸಂVೆ: ಐ 86 ಎZ>ಐ 2021, [ೆಂಗಳ\ರು, 8-ಾಂಕ 04.03.2021 ಪಾ.ವ-ೆಯ2 "ವದ ಅಂಶಗಳ ]-ೆ'ೆಯ2 , ಾಜದ2 ನ Star Classified Hotel ಗಳನು' 8-ಾಂಕ: 01.04.2021 ಂದ "9ೈ6ಾ9ೆ" ಎಂದು ಾ;ನ<ಾನ )ೕP, ಆ*ೇಶ 7ೊರPಸಾ4*ೆ. Star Classified Hotel ಗಳC "9ೈ6ಾ9ೆ" ಎಂದು ಆಯುಕ.ರು, 9ೈ6ಾ9ಾ^ವೃ8` 7ಾಗೂ )*ೇ+ಶಕರು, 9ೈ6ಾ9ೆ ಮತು. ಾ(ಜ ಇಾVೆ ರವಂದ ಪ<ಾಣ ಪತ ಪHೆಯತಕSದು?. ಈ ಕುತು ಆಯುಕ.ರು, 9ೈ6ಾ9ಾ^ವೃ8` 7ಾಗೂ )*ೇ+ಶಕರು, 9ೈ6ಾ9ೆ ಮತು. ಾ(ಜ ಇಾVೆ ರವರು ಪಾೋದಮ ಇಾVೆbಂ86ೆ ಸ<ಾೋT <ಾಗ+ಸೂTಗಳನು' ತ3ಾ, ಸ9ಾ+ರದ ಅನುWೕದ-ೆ ಪHೆಯತಕSದು?. ಈ ಆ*ೇಶವನು' ಆc+ಕ ಇಾVೆಯ dಪe( ಸಂVೆ FD 496 Exp- 7/2020, 8-ಾಂಕ 16.02.2021, ನಗ ಾ^ವೃ8` ಇಾVೆ (ffಎಂ>) ಯ ಅನgಕೃತ dಪe( ಸಂVೆ ನಅಇ. 21 ಎಂ.ಎh.ಯು 2021, 8-ಾಂಕ 02.02.2021, ಇಂಧನ ಇಾVೆಯ dಪe( ಸಂVೆ ACS/EN/21, 8-ಾಂಕ 16.02.2021 ರ2 )ೕPರುವ ಸಹಮಯನiಯ 7ಾಗೂ 8-ಾಂಕ 18.02.2021 ರಂದು ನHೆದ ಸTವ ಸಂಪಟ ಸUೆಯ ಪಕರಣ ಸಂVೆ :70/2021ರ ಅನುWೕದ-ೆಯಂೆ 7ೊರPಸಾ4*ೆ.” 10. Thus, according to the petitioner, the Government classified all the five star hotels as an ‘industry’ and as a consequence, as per the statements in the preamble, the petitioner would be entitled for - 8 - NC: 2025:KHC:3975 WP No. 2182 of 2024 reduction in electricity charges as well as reduction in property tax. 11. It is contended by the petitioner that this classification was the subject matter of correspondence between various departments including the question as to whether registration certificate has to be obtained from the Department of Commerce and Industries and this also led to issuance of a clarificatory Government Order on 16.09.2021, which clarified that the classification made by the Ministry of Tourism and the Government of India would be adequate and no fresh registration was necessary. 12. Thus, according to the petitioner since it has been registered as a five star hotel with the Ministry of Tourism which is confirmed by the communication dated 24.01.2020 and since it has already been registered as a five star hotel with the Union of India, the petitioner would be entitled for benefits - 9 - NC: 2025:KHC:3975 WP No. 2182 of 2024 accruing as a result of its classification as an ‘industry’ by the State Government also. 13. It is also contended by the learned Senior Counsel appearing for the petitioner that the Government insofar as electricity rates were concerned had issued another Government Order dated 09.08.2021, whereby it clearly stated that in respect of five star hotels, the electricity tariff for a period of five years i.e., from 01.04.2021 to 31.03.2026 would be based on the tariff which would be applicable to an industry. In fact, as per the operative portion of said Government Order, it was stated as follows: “¥ÀæªÁ¸ÉÆÃzÀåªÀÄ E¯ÁSɬÄAzÀ F ¥ÀæªÀUÀðzÀ «zÀÄåvï UÁæºÀPÀgÀÄUÀ½UÉ «zÀÄåvï zÀgÀzÀ°è MzÀV¸ÀĪÀ jAiÀiÁ¬ÄÛAiÀÄ ªÉÆvÀÛ (dPÁw zÀgÀzÀ ªÀåvÁå¸ÀzÀ ªÉÆvÀÛ) ªÀ£ÀÄß «zÀÄåvï ¸ÀgÀ§gÁdÄ PÀA¥À¤UÀ½UÉ ¥ÁªÀw¸ÀĪÀÅzÁVgÀÄvÀÛzÉ.” 14. It is therefore contended by the petitioner that since the Government had undertaken to bear the difference in tariff to the utilities, the utilities were therefore bound to obey the Government Order and levy the appropriate tariff to the five star hotels. - 10 - NC: 2025:KHC:3975 WP No. 2182 of 2024 15. It is not in dispute that the petitioner has not filed its response to the show-cause notices and it is contended that even before the period of 30 days prescribed under the statute had expired, an order of re-assessment had been passed. It is therefore clear that the stand of the petitioner that the Government Order dated 04.03.2021 would have to be applied in its case has not been put forth before the BBMP. 16. If the Government has indeed passed an order classifying five star hotels as an ‘industry’ and in its Government Order, it has stated that the classification of five star hotels as an industry would lead to twin benefit i.e., reduced electricity tariff and reduced property tax, it is obvious that the BBMP will have to consider this Government Order both in spirit and in letter and thereafter, determine whether the petitioner would be liable to pay tax either as an industry or as all star hotels. - 11 - NC: 2025:KHC:3975 WP No. 2182 of 2024 17. In this particular case, it is clear that this exercise has not been undertaken by the BBMP basically because the order of re-assessment was passed even before the petitioner could raise objections to the show-cause notices. 18. I am therefore of the view that it would be appropriate to direct the BBMP to permit the petitioner to file its objections to the order of re- assessment and this order of re-assessment shall be construed as a show-cause notice for the purposes of determination as to whether the petitioner would be entitled for reduction of property tax as per Government Order dated 04.03.2021. 19. On its objections being filed, the BBMP shall meticulously examine the consequences of the Government Order dated 04.03.2021 which classifies the five star hotels as an ‘industry’ and then take a decision as to whether the petitioner being a five - 12 - NC: 2025:KHC:3975 WP No. 2182 of 2024 star hotel would be entitled for reduced rate of property tax as per the returns filed by it earlier. 20. It is made clear that the BBMP shall apply its mind on this aspect of the matter, keeping in mind the policy decision taken by the Government vide Government Order dated 04.03.2021. 21. The said exercise shall be completed by the BBMP within a period of one month from the date of receipt of the objections by the petitioner. 22. As far as the claim of the petitioner regarding the reduced tariff in electricity charges by treating it as an industry is concerned, the petitioner is directed to submit a representation, if not already submitted, to the BESCOM and the BESCOM shall consider the same by applying its mind as to whether the Government Order dated 04.03.2021, as clarified by the subsequent Government Order dated 09.08.2021, entitles the petitioner to reduced tariff. It is made clear that the BESCOM shall consider the - 13 - NC: 2025:KHC:3975 WP No. 2182 of 2024 claim the petitioner regarding payment of electricity charges by treating it as an industry from the date the Government Order came into force for a period of years from 01.04.2021 to 31.03.2026. The said exercise shall be completed by the BESCOM within a period of one month from the date of receipt of a copy of this order/representation of the petitioner. 23. If the aforesaid Government Orders do give the benefit of reduced tariff in respect of property tax and electricity charges to the petitioner by treating it as an industry, it is needless to state that the utilities i.e., BBMP and BESCOM shall apply the same and any excess amount paid by the petitioner shall be refunded or adjusted to the petitioner’s account for future liabilities in this regard. 24. It is made clear that BESCOM or any other utility cannot take a stand that the benefit under the Government Order was not available for a five star hotels since a specific request in that regard was not - 14 - NC: 2025:KHC:3975 WP No. 2182 of 2024 made and this is basically because the Government Order does not require them to make a specific request. In fact the Government Order would automatically apply to all the five star hotels in the State and it is for the BESCOM and other utilities to obey the Government Order and take necessary action. 25. Since the petitioner had the benefit of an interim order in this petition, the same shall continue to be in force till the consideration of objections/representation of the petitioner by the BBMP. 26. The writ petition is accordingly disposed of. Sd/- (N S SANJAY GOWDA) JUDGE PKS List No.: 1 Sl No.: 1