The building with large shopping area does not necessarily fall in the definition of a shopping mall for the purpose of levy of property tax in Punjab, the high court has ruled.
A shopping mall is an integrated complex comprising of a ‘bouquet of activities’, not only shops but also eating joints, health and fitness centers, cyber cafes, corporate offices, pubs etc. “Viewed from such perspective, a Mall would be seen as a “one stop destination” catering to the different needs of the public at large,” the bench of justice Tejinder Singh Dhindsa and justice Sanjiv Berry said quashing property tax notices to Ludhiana’s AC Market also known as Caliber Plaza’s case.
The order came on the 2019 plea of Caliber Plaza, Shopkeepers Welfare Society, in which the plaza was told to pay property tax in the category of a shopping mall in place of a commercial building. The latter’s property tax levy is less than a mall as per 2014 notification of the Punjab government.
The petitioner’s view was that the shops in the Caliber Plaza are confined only to one trade of selling cloth. There are no facilities such as restaurants, food plaza, health club, pubs etc available there. Hence the same cannot be construed as a Mall.
{{/usCountry}}The petitioner’s view was that the shops in the Caliber Plaza are confined only to one trade of selling cloth. There are no facilities such as restaurants, food plaza, health club, pubs etc available there. Hence the same cannot be construed as a Mall.
{{/usCountry}}On the other hand, the MC Ludhiana’s view was that plaza is a large shopping area comprising of around 700 shops in a five storey building having an escalator, lift as also parking facilities and would fall within the definition of a Mall for the purposes of levy of property tax. Commercial complex is a famous wholesale market and is known as a ‘hub of business’. MC provides all basic amenities i.e. roads, sewerage and street lights. The building is built on over 6560 square yards of area, the MC has said defending its decision.
The HC observed that the definition of a shopping mall as per 2014 notification and under the 1997 building byelaws would clearly indicate that both are over-lapping. However, it added that in 2014 notification, which deals with collection of property tax from commercial buildings and shopping malls, there is a separate categorization even though there is no definition of commercial building. Hence, each category ought to be defined for the purpose of property tax, it added referring to the case in hand adding that in Caliber Plaza’s case, shops confined to cloth trade and the premises have no activities in the nature of a health club, fitness center, restaurants, food plazas, clubs, etc and other recreational activities.
The court added that in case the court were to accept the view of MC of treating the petitioner ‘Plaza’ as a ‘Mall’ then the distinction between a ‘commercial building’ and a ‘Mall’ as per 2014 notification would get obliterated . The MC has been swayed by the fact that there are a large number of shops and offices situated within the plaza and which is serviced with ample parking facility and, therefore, is a Mall, the court recorded quashing the notices and asking MC to return tax deposited within three months, if collected in excess.