Abbas and Shahul Hameed v. The State of Kerala and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **WEDNESDAY, THE 29TH DAY OF JANUARY 2020 / 9TH MAGHA, 1941** ## **WP(C).No.1250 OF 2020(E)** ## **PETITIONER/S:** |**1**||**ABBAS**| |---|---|---| |||**AGED 50 YEARS**| |||**S/O. MOHAMMED JAMALSHA, 10/647, INDUSTRIAL ESTATE,**| |||**PUDUPPARIYARAM P.O., PALAKKAD DISTRICT, PIN-678 0731**| |||**REPRESENTED BY POWER OF ATTORNEY HOLDER SHAHUL**| |||**HAMMED.**| |**2**||**SHAHUL HAMEED**| |||**AGED 52 YEARS**| |||**S/O. MOHAMMED JAMALSHA, 10/647, INDUSTRIAL ESTATE,**| |||**UDUPPARIYARAM P.O., PALAKKAD DISTRICT, IN-678 0731.**| |||**BY ADV. SRI.A.R.GANGADAS**| |**ENT/S**|**:**|| |**1**||**THE STATE OF KERALA**| |||**REPRESENTED BY THE SECRETARY, REVENUE DEPARTMENT,**| |||**SECRETARIAT, THIRUVANANTHAPURAM-695 001.**| |**2**||**THE REVENUE DIVISIONAL OFFICER**| |||**RDO OFFICE, PALAKKAD-678 001.**| |**3**||**THE TAHASILDAR**| |||**TALUK OFFICE, BEHIND CIVIL STATION PALAKKAD-678 001.**| |**4**||**THE VILLAGE OFFICER**| |||**PUDUPPARIYARAM-II, PUDUPPARIYARAM P.O., PALAKKAD**| |||**DISTRICT, PIN-678 0731.**| ## **RESPONDENT/S:** ## **OTHER PRESENT:** ## **SMT.M.M.JASMINE, GOVT.PLEADER** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29.01.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No.1250 OF 2020(E)** **2** ## **ALEXANDER THOMAS, J.** ## **-----------------------------------------** ## **W.P.(C.) No. 1250 of 2020** **----------------------------------------Dated this the 29[th ] day of January, 2020** ## **JUDGMENT** The prayers in the above W.P.(C.) are as follows : _(i) “issue a writ of certiorari or any other appropriate writ order or direction to quash Exhibit P5A, B,C,D and Exhibit P6_ _(ii) issue a writ of mandamus any other appropriate writ order or direction to the respondent 3 and 4 to measure the plinth area of the building and revise the building tax._ _(iii) Issue such other further orders deemed fit and proper in the circumstances of the case._ _(iv) Award the cost of the petitioners in this proceeding. “_ 2. Heard Sri.A.R.Gangadas, learned counsel for the petitioners and Smt.M.M.Jasmine, learned Government Pleader appearing for the respondents. 3. The case set up in this W.P.(C.) is as follows : That the petitioners are brothers who were in possession of 11.41 cents of land comprises in survey No.448/2011 of Puthupariyaram – II village under valid title. That the petitioners applied and obtained permission to construct a two storied building having an extent of 269.87 sq.metres in the ground floor and further extent of 16.78 sq.metres in the 1[st] floor. Since there were some changes in the plan, the petitioners submitted an application to revise the permit changing the plinth area of the 1[st] floor to 277.79 sq.metres and 2[nd] floor to 16.75 sq.metres. Thereafter, the **WP(C).No.1250 OF 2020(E)** **3** petitioners have started construction of the building. During the stage of the construction, the petitioners have jointly executed Ext.P3 registered partition deed No.1159/2011 dated 2.4.2011 of SRO, Olavakkod, whereby the entire extent of the 1[st] floor has been divided to 2 equal halves and A schedule thereof is allotted to the 1[st] petitioner and B schedule thereof is allotted to 2[nd] petitioner and the ground floor has been kept in common. 4. Further that, after completion of the building in June, 2014, two houses of the 1[st] floor were separately numbered by Puthupariyaram Grama Panchayat as door Nos. 10/586 and 10/587. The ground floor door number is 10/647. Thereafter, the 3[rd] respondent, Tahsildar made the assessment in terms of the provisions contained in the Kerala Building Tax Act. The assessment of the building for the purpose of building tax and luxury tax as per the provisions contained in the Kerala Building Tax Act and has issued assessment orders dated 28.7.2017 and dated 16.7.2017 (referred to as No.1 in the impugned Ext. P5(a)), whereby the 1[st] respondent has treated the whole building as a single unit and tax was assessed as Rs, 5,100/- and luxury tax as Rs.16,000/-. The petitioners had then challenged the abovesaid assessment order dated 28.7.2017 and 16.7.2017 issued by the 3[rd] respondent, Tahsildar by filing statutory appeal before the 2[nd] respondent Revenue Divisional Officer appellate authority. The 2[nd] respondent after hearing the petitioners had set aside the abovesaid impugned assessment orders and remitted the matter to the 3[rd] respondent Tahsildar for **WP(C).No.1250 OF 2020(E)** **4** consideration fresh. After the remit, the 3[rd] respondent Tahsildar has passed Ext. P5(a) order No.(GI)2015/12577/9/500 dated 30.6.2018 fixing the tax amount of Rs. 56,700/- as building tax for the ground floor which is to be used for commercial purposes and Rs.15,300/- as building tax for the 1[st] floor treating it as a single unit and Rs.15,300/- as luxury tax for the 1[st] floor by treating it as a single unit and thus totalling to Rs. 87,300/-. 5. Aggrieved by Ext.P5(a) order dated 30.6.2018 issued by the 3[rd] respondent, Tahsildar, the petitioners have preferred statutory appeal before the 2[nd] respondent, Revenue Divisional Officer. According to the petitioners, they have specifically contended before the 3[rd] respondent and have also produced Ext.P3 registered partition deed dated 2.4.2011 of SRO Olavakkode as can be seen from para No.3 of Ext.P5 order and still the 1[st] respondent has proceeded on the basis, as if the luxury tax and the building tax of the 1[st] floor should be assessed by treating both the units as a single unit. Further that, in the abovementioned appeals, the 2[nd] respondent Revenue Divisional Officer, appellate authority again committed same mistake and has treated the 1[st] floor as a single unit though there are 2 separate units in the 1[st] floor, one owned by the 1[st] petitioner and the other owned by the 2[nd] petitioner as per the stipulations in Ext.P3 registered partition deed. It is pointed out that the 2[nd] respondent RDO has erroneously stated that the petitioners have not produced documents as in Ext.P3 registered partition deed. **WP(C).No.1250 OF 2020(E)** **5** 6. After hearing both sides, it can be seen, more particularly, from the reading of para no.3 of Ext.P5(a) order dated 30.06.2018 rendered by the 3[rd] respondent Tahsildar that the petitioner has indeed produced an authenticated copy of Ext.P3 registered partition deed of SRO, Olavakkode, before the said authority. It is now well settled by a series of rulings of this Court as in _**Hi Lite Realtors (India) LLP v.Revenue Divisional Officer**_ [2018 (3) KLT 237] where lawful ownership of the buildings have been conveyed to separate owners through registered deeds before the initial assessment as per the provisions contained in Kerala Building Tax Act is effected, then the building tax and the luxury tax should be assessed by treating those units as separate units and by not treating the said unit as a single composite one. It is profitable to refer to para No.11 of the judgment of this Court in _**Hi Lite Realtors (India) LLP** (supra)_ _“11. Now I shall come to the statutory provisions. The provisions contained in Sections 7 and 9 of the Act indicate beyond doubt that taxable event is completion of the construction of the building and the liability to pay tax is on the owner of the building. S.2(e) of the Act defines 'building'. Explanation 2 to S.2(e) of the Act clarifies that where a building consists of different apartments or flats owned by different persons and the cost of construction of the building was met by all such persons jointly, each such apartment or flat shall be deemed to be a separate building for the purpose of the Act. Explanation 2 referred to above reads thus:_ _**“Explanation 2** - Where a building consists of different apartments or flats owned by different persons and the cost of construction of the building was met by all such persons jointly, each such apartment or flat shall be deemed to be a separate building.”_ _If Explanation 2 to S.2(e) is understood in the light of Sections 7 and 9 of the Act, it is clear that when a building consisting of different apartments or flats is constructed jointly by different persons, each contributing to the cost of construction of his/her respective units, each unit has to be assessed in the name of its owner. In other words, the object of Explanation 2 to S.2(e) of the Act is to ensure that the building is assessed only in the name of the person to whom it belongs. It is on account of the said reason that this Court passed Exhibit P6 judgment directing the assessing authority to consider whether the building is liable to be treated as a composite one_ **WP(C).No.1250 OF 2020(E)** **6** _or different individual units for the purpose of assessment under the Act. If one would apply the same reasoning, there is no difficulty in holding that if the building is one constructed by a developer for another, the same has to be assessed in the name of the person for whom the same was constructed. The owner may get right in the property before or after the completion of construction. The same is not decisive at all in the matter of deciding the issue whether the independent units in the buildings are to be treated as separate buildings for the purpose of assessment under the Act. Similar view is seen taken by this Court in Balu v. State of Kerala (1994 (2) KLT 42). Paragraph 3 of the said judgment reads thus:_ _The sole question for decision is whether the assessment of the entire building consisting of twenty two flats as one unit is legal and valid. There is no dispute about the facts of the case. The building is an integral one consisting of twenty two flats. It is a multistoryed one. The land belongs to the various flat owners in co-ownership, after the transfer effected to them of the undivided interest in the land, the transfer being effected after the construction of the flats was complete. What Explanation 2 lays down is that if a building consists of different apartments or flats owned by different persons, and the cost of construction of the building is met by such persons jointly, each apartment or flat shall be deemed to be a separate building. The ingredients of the Explanation are (a) the existence of a building, (b) that building must consist of different apartments or flats, (c) the apartments or flats must be owned by different persons and (d) the cost of construction of the building should be met by such persons jointly. If these ingredients concur, each of the apartments or flats will be deemed to be a separate building, though the building is one structurally and there is an integral connection between the various parts of the building. The Explanation in effect splits on otherwise integral unit or building into multiple buildings, liable to be assessed separately. It would have been otherwise going by the main part of the definition alone. Evidently this has been done to encourage construction of apartments and flats and to alleviate the burden that will otherwise fall heavily by assessing the entire building as one unit. The fact that the undivided interest in the land is transferred only subsequent to the construction of the flats is in my opinion, irrelevant in deciding on the applicability of Explanation 2. The building in this case therefore satisfies the conditions of Explanation 2 to S.2(e). The assessing authority has not given any reasons in Ext.P7 to deny the benefit of separate assessment to the flat owners in this case, or any justification for assessing the entire building as one unit on the developer. Such assessments without keeping in mind the basic philosophy underlying the Explanation will only act as a damper to such construction activity in the State.”_ _Section 7 of the Act provides for furnishing of the return by the owner of the building for the purpose of assessment. S.8 of the Act provides that if a person has not furnished the return within the time stipulated, he may furnish the return at any time before the assessment is made. S.9 of the Act provides for assessment in cases where return is filed and also in cases where return is not filed. In other words, as far as multi-storied buildings consisting of independent units are concerned, it appears to me that the scheme of the statute is that after completion of the construction, the owner has to obtain conveyance deed in respect of the unit from the developer and file the return. In case the return is not filed, the owner has time till the time of assessment for obtaining conveyance deed and for filing return. In other words, in cases where transfer of property is not effected before the assessment proceedings, as the obligation in terms of the statute to pay tax for the_ **WP(C).No.1250 OF 2020(E)** **7** _building is on the owner of the building and as the agreement for sale does not confer any title on the agreement holder, such units cannot be assessed in the name of the persons with whom the developer has entered into the agreement for sale, for, the same cannot be treated as units owned by such persons. It is, therefore, to be clarified that conveyance deeds have to be obtained at any rate by the owners concerned before the assessment of the building. This is the only plausible view which can be taken in a matter like this since it is not certain that the developer would certainly convey ownership of the unit to persons with whom they have entered into agreements for sale after the assessment. If for some reason, the agreement holder does not make the payment in full, the developer may not convey ownership of the unit to him and the assessing authority is not expected to wait until appropriate conveyance deed is executed by the developer in respect of all the units constructed by them.”_ 7. From a reading of the pleadings and materials on record, it is seen that the initial assessment was done by the 3[rd] respondent Tahsildar under the provisions of the Kerala Building Tax Act for the determination of the building tax as well as luxury tax as prescribed under the said statute on 28.7.2017 and 16.7.2017 as can be seen from the reference No.1 in Ext.P5 order. According to the petitioner, even before the completion of the construction, the petitioner had lawfully partitioned their rights by way of execution of registration of partition deed as per Ext.P3 registered partition deed No.1159/2011 dated 2.4.2011 of SRO, Olavakkode. It is well before the initial assessments effected in July, 2017 and that therefore, the petitioners are entitled to succeed in this case and that the assessments should have been done separately by treating the 2 units allotted in the 1[st] floor as 2 separate units, as it has already been duly partitioned as schedule A and schedule B respectively of Ext.P3 registered partition deed and that the respondents have erred in holding that the assessment is to be effected by treating the entirety of the 1[st] floor as a single and composite unit. **WP(C).No.1250 OF 2020(E)** **8** 8. The learned Government Pleader would point out that a reading of the impugned Ext.P6 appellate order would show that the 2[nd] respondent RDO has clearly stated therein that the petitioners have not produced any documents to establish their claims that the units in the 1[st] floor are 2 separate units. 9. Having regard to the categorical admission made by the 3[rd] respective Tahsildar in para No.3 of Ext.P5(a) that the petitioner has indeed produced the abovesaid Ext.P3 registered partition deed, it is the bounded duty of the 2[nd] respondent to meticulously and precisely examine those issues and if a copy of Ext.P3 partition deed, which has produced before the 3[rd] respondent, Tahsildar as is stated in Ext.P5(a) was infact not immediately available before the 2[nd] respondent, RDO in the appellate authority, then the 2[nd] respondent ought to have given reasonable opportunity to the petitioners to produce attested and authenticated copy of Ext.P3 deed and then should have heard the petitioners and then decided the said issue as to whether or not the units in the 1[st] floor of the building are separate units, going by the partition made as per Ext.P3 registered partition deed or whether lawfully effected only as a single composite unit. Therefore, the matter requires serious reconciliation at the hands of the respondents and it warrants remit. 10. For effectuating such a remit, it is ordered that the impugned Ext.P5(a) order dated 3.6.2018 issued by the 3[rd] respondent, Tahsildar and **WP(C).No.1250 OF 2020(E)** **9** impugned Ext.P6 appellate order dated 3.10.2019 rendered by the 2[nd] respondent RDO will stand set aside and quashed and the matters in relation to the assessment for the luxury tax and building tax of the subject properties as per the provisions contained in the Kerala Building Tax Act will stand remitted to the 3[rd] respondent Tahsildar, for consideration and decision afresh. By way of abundant caution, the petitioners may produce a photocopy of Ext.P3 partition deed before the 3[rd] respondent, without any further delay. Thereupon, the 3[rd] respondent will verify the photocopy with the original of Ext.P3 partition deed and also ensure that he or any of the gazetted officers of the office may attest the photocopy and thereafter the 3[rd] respondent may return back the original of the partition deed to the petitioners. 11. Thereafter, the 3[rd] respondent will issue notices of hearing to the petitioners and will afford reasonable opportunity of being heard to the petitioners through the authorized representative or counsel, if any and then will consider the matter afresh and untrammeled and uninfluenced in any manner by the previous orders of either by the 3[rd] respondent Tahsildar or 2[nd] respondent Revenue Divisional Officer/appellate authority. In this regard, the 3[rd] respondent will bestow his anxious consideration to the crucial and oral fact as to whether or not the units in the 1[st] floor of the building is to be treated as 2 separate units going by the partition effected as per Ext.P3 registered partition deed dated 2.4.2011 and whether the **WP(C).No.1250 OF 2020(E)** **10** said conveyance of lawful ownership of partition cases has to be effected before the initial assessment done on July, 2017. It is found that the ownership of the units in the 1[st] floor has been lawfully partitioned and allotted to 2 separate owners, before July, 2017, then the units in the 1[st] floor will have to be treated as separate units and not as a single composite unit. The learned Government Pleader would submit that the ground floor which is now used for commercial purposes will be subjected only to building tax and not for luxury tax and that will be assessed even otherwise separately. A considerable decision on the abovesaid aspects should be rendered by the 3[rd] respondent Tahsildar without much delay, preferably within a period of 2-3 months from the date of production of certified copy of this judgment. Since the impugned Ext.P5 and Ext.P6 orders have now been set aside and then the matter be remitted. All consequential proceedings issued by way of demand notice for the enforcement of the said impugned orders will also stand automatically set aside and quashed. With these observations and directions, the above W.P.(C.) will stand disposed of. Sd/- **ALEXANDER THOMAS, JUDGE** SKS **WP(C).No.1250 OF 2020(E)** **11** ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE BUILDING PERMIT NO.BP 82/2009-10 DATED 12.6.2009 ISSUED BY THE PUDUPPARIYARAM GRAMMA PANCHAYATH TO THE PETITIONERS.** **EXHIBIT P2 TRUE COPY OF THE REVISED PERMIT NO.BP 82/2009-10 DATED 10.12.2009 ISSUD BY PUDUPPARIYARAM GRAMMA PANCHAYATH TO THE PETITIONERS.** - **EXHIBIT P3 TRUE COPY OF THE REGISTERED PARTITION DEED NO.1159 OF 2011 DATED 2.4.2011 OF SRO OLAVAKKODE.** - **EXHIBIT P4 TRUE COPY OF THE TAX RECEIPTS DATED 25.8.2017 ISSUED BY THE VILLAGE OFFICER PUDUPPATIYARAM-II.** - **EXHIBIT P5 A TRUE COPY OF THE ORDER NO. (G1)2015/12577/9/500 DATED 30.6.2018 ISSUED BY THE 3RD RESPONDENT.** - **EXHIBIT P5 B TRUE COPY OF THE DEMAND NOTICE NO. (G1)2015/12577/9/500 DATED 30.6.2018 (BUILING I D35807) ISSUED BY THE SECOND RESPONDENT.** - **EXHIBIT P5 C TRUE COPY OF THE ORDER NO. (G1)2015/12577/9/500 DATED 30.6.2018 (BUILING I D35808) ISSUED BY THE SECOND RESPONDENT.** - **EXHIBIT P5 D TRUE COPY OF THE ORDER NO. (G1)2015/12577/9/500 DATED 30.6.2018 (BUILING I D35807) ISSUED BY THE SECOND RESPONDENT.** **EXHIBIT P5 TRUE COPY OF THE ORDER AND DEMAND NOTICE NO(G1)2015/12577/9/500 DATED 30.6.2018 ISSUED BY THE 3RD RESPONDENT.** **EXHIBIT P6 TRUE COPY OF THE ORDER NO.C-4286/2018 DATED 3.10.2019 ISSUED BY THE 2ND RESPONDENT.**