Pranav B Prem

The Karnataka Real Estate Regulatory Authority (K-RERA) has directed Casagrande Garden City Builders Private Limited to refund ₹52.74 lakh to a Bengaluru homebuyer after finding that the developer indulged in unfair trade practices by repeatedly altering the cost breakup of the flat and inflating the Goods and Services Tax (GST) component. The order was passed by Authority Member G.R. Reddy, who held that the conduct of the promoter was clearly established on record and that the builder had failed to provide the allottee with a transparent and consistent statement of costs.

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The dispute arose from the booking of a residential apartment in the project “Viva City” at Electronic City, Bengaluru. The homebuyer entered into an agreement for sale with the developer on May 27, 2024, and paid a booking and advance amount totalling approximately ₹33.50 lakh.

At the time of booking, the builder represented that the total cost of the flat was ₹79.98 lakh, with the GST component shown as ₹8.57 lakh. However, the homebuyer later discovered that the actual GST payable was only ₹3.81 lakh. By that stage, the allottee had already paid ₹32.99 lakh towards the sale consideration, incurred ₹41,650 towards franking charges, and deposited ₹30,476 as tax deducted at source (TDS), which the builder had agreed to adjust against future demands.

Before K-RERA, the homebuyer contended that despite repeated requests, the builder refused to issue a final and official cost breakup in writing. It was alleged that the amounts shown under different heads—particularly GST—were changed repeatedly, creating confusion and artificially inflating the overall price of the apartment. According to the complainant, this lack of clarity and shifting figures left the buyer unsure of the actual financial liability. Casagrande Garden City did not file any written objections to rebut these allegations.

After examining the material on record, including electronic evidence and recorded communications, the authority found that the promoter had indeed failed to provide a consistent and transparent cost statement. Recording its findings, K-RERA observed: “The Respondent is refusing to give in writing the cost breakup for certain compliance and tax purposes. The respondent/builder keeps changing the amount shown under different heads, including GST. The Respondent is indulging in unfair trade practices, which is manifest on record, and the evidence, CD conversation, and electronic evidence produced are proving the fact stated in the complaint.”

The authority held that such conduct squarely amounted to unfair trade practice and violated the obligations cast on a promoter under the Real Estate (Regulation and Development) Act, 2016. Referring to judicial precedents on Section 18 of the RERA Act, K-RERA reiterated that an allottee has an unqualified right to seek refund with interest where the promoter breaches statutory or contractual obligations. Since the builder’s actions remained unchallenged and unsupported by any explanation, the authority concluded that the homebuyer was entitled to a full refund.

Also Read: Homebuyer Cannot Be Compelled To Take Possession Of Unallotted Flat; Full Refund With Interest Directed: Rajasthan REAT

Accordingly, K-RERA directed Casagrande Garden City Builders to refund the booking amount, franking charges and TDS, together with interest calculated at SBI MCLR plus two percent, aggregating to ₹52.74 lakh, within the time stipulated in the order. The ruling reinforces the obligation of developers to maintain transparency in pricing and tax disclosures and affirms that arbitrary changes in cost components—especially statutory levies like GST—will attract strict consequences under the RERA framework.

Cause Title: Ramkumar & Anr Versus Casagrande Garden City Builders Private Limited

Case No: Complaint No. 00729/2024

Coram: Authority Member G.R. Reddy