Gram Panchayats must determine Rule 6(c) exemption claims before demanding property tax.

In brief

The question

1. Whether the demand notice could stand without the Gram Panchayat first considering the petitioner’s claim to exemption under Rule 6(c).

The court held

The petition was allowed and the demand notice dated 23 February 2026 was quashed.

It also directed

The petitioner was directed to submit a representation with supporting materials and a copy of the order within four weeks; the Gram Panchayat was directed to consider the claim under Rule 6(c), consistently with W.P. No. 16323 of 2021, within four weeks of receiving it.

The Court did not grant an unconditional declaration of exemption.

01Facts

The petitioner, an educational society, challenged a Gram Panchayat demand notice dated 23 February 2026 for property tax and sought exemption under Rule 6(c) of the Karnataka Gram Swaraj and Panchayat Raj (Gram Panchayat Taxes and Fees) Rules, 1994.

p. 1

With the parties’ consent, the High Court took up the petition for final disposal.

p. 2

It treated the dispute as governed by the principles in W.P. No. 16323 of 2021 (LB-RES) and connected matters.

p. 2 · p. 17

02Issues

i.1. Whether the demand notice could stand without the Gram Panchayat first considering the petitioner’s claim to exemption under Rule 6(c).

p. 17 · p. 18

ii.2. Whether the petitioner was entitled to an exemption from property tax under Rule 6(c).

p. 1 · p. 2 · p. 18 · p. 19

03Law Applied

Section 199(1) of the Karnataka Gram Swaraj and Panchayat Raj Act, 1993 authorises Gram Panchayats to levy property tax subject to prescribed exemptions.

p. 5 · p. 6

Rule 6(c) of the 1994 Rules exempts buildings and lands used solely for charitable or public religious purposes and not let out for rent.

p. 8

In The Sapthagiri Educational and Charitable Trust v. The Samandur Grama Panchayat, the Court held that an institution claiming Rule 6(c) exemption must place relevant material before the Gram Panchayat, which must consider the claim; tax may be demanded if the property is found not to qualify.

p. 11 · p. 12 · p. 13 · p. 14 · p. 15

The coordinate-bench decision in W.P. No. 16323 of 2021 (LB-RES) further established that exemption must be considered and determined before a demand notice is issued.

p. 15 · p. 16 · p. 17

Provisions in the judgment · 1 · Linked ones open on LawLens

KARNATAKA MUNICIPALITIES ACT, 1964 Section 94

04Reasoning

The Court considered the dispute identical to matters already decided by coordinate benches and applied their interpretation of Rule 6(c).

p. 17

Because entitlement depends on whether the petitioner’s property satisfies the rule’s requirements, the petitioner had to submit supporting material to the Gram Panchayat.

p. 17 · p. 18 · p. 19

The Panchayat, in turn, had to assess that material and determine the exemption claim before issuing a tax demand.

p. 17 · p. 18 · p. 19

The Court therefore did not itself decide that the petitioner qualified for exemption; it directed the Panchayat to consider the claim under the governing law.

p. 17 · p. 18 · p. 19