From Rs 5,000 per MW to 1% of property value: Adani Green Energy (UP) Limited tells the Karnataka High Court why it is challenging the 1% property tax on solar power plants.
Bengaluru: Adani Green Energy (UP) Limited has moved the Karnataka High Court to have the Karnataka Grama Swaraj and Panchayat Raj (Grama Panchayat Taxes, Rates and Fees) Rules, 2025 set aside to the extent they treat solar power plants as regular industrial buildings and impose property tax at 1% of the property’s value. The challenge also covers the demand notices and assessment proceedings for assessment year 2026-27 [Adani Green Energy (UP) Limited v. State of Karnataka and Others].
Besides the rules to that extent, the company wants the notices issued by the gram panchayat authorities concerned quashed. Its plant lies within the MB Halli, H Byadarahalli and Mattikere gram panchayats. The petition has not yet been heard on merits, and the State’s response is awaited.
The grounds of challenge
The petition contends that solar plants are a distinct infrastructure category and should not be taxed like conventional industrial buildings, and that taxing property value instead of generating capacity imposes an excessive burden. It adds that solar plants are non-polluting and differ in operations, machinery and approvals.
It also calls the levy discriminatory, since solar parks pay 1% while certain other industrial building categories pay lower rates, and alleges that the demand notices breach the procedure under the Karnataka Grama Swaraj and Panchayat Raj Act, 1993. All of these are the petitioner’s contentions and have not been adjudicated.
From a per-MW levy to a value-based one
According to the company, government circulars dated February 27, 2018 and March 20, 2020 had fixed a levy of Rs 5,000 per MW per year on renewable energy units, on the recommendation of an expert committee, and it paid under that regime. It contends that the State proposed Rs 10,000 per MW, but the final notification of October 17, 2025 imposed a levy based on property value instead, without explanation or stakeholder consultation.
What the High Court is asked to decide
The challenge asks the High Court to decide whether a tax basis keyed to property value can validly apply to a generation asset that was earlier charged by capacity, and whether classifying it with industrial buildings is reasonable.
The outcome could matter to other solar developers assessed under the same Schedule. The Court has issued no order on the petition so far.
Case Title: Adani Green Energy (UP) Limited v. State of Karnataka and Others (title and case number to be verified)
Court: Karnataka High Court
Date of Report: October 14, 2026