Anna Kutty Antony Kallidantiyil and Antony Mathew v. District Collector, Kottayam and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** **WEDNESDAY, THE 29TH DAY OF JUNE 2016/8TH ASHADHA, 1938** ## **WP(C).No. 9375 of 2013 (V)** ## **---------------------------** ## **PETITIONER(S) :** **--------------------------** **1. ANNAKUTTY ANTONY KALLIDANTHIYIL HOUSE, KURICHITHANAM P.O., MARANGATUPALLY PANCHAYT, PALAI, KOTTAYAM, KERALA – 686634.** **2. ANTONY MATHEW** - **VELLAMBEL HOUSE, KURICHITHANAM P.O., MARANGATUPALLY PANCHAYAT, PALAI, KOTTAYAM, KERALA – 686 634.** **BY ADV. SRI.P.J.JOSEPH** ## **RESPONDENT(S) :** - **----------------------------** **1. THE DISTRICT COLLECTOR KOTTAYAM - 686 001.** **2. THE REVENUE DIVISIONAL OFFICER PALAI, KOTTAYAM DISTRICT - 686 575.** **3. THE TAHSILDAR, MEENACHIL TALUK PALAI, KOTTAYAM DISTRICT- 686 575.** **4. THE VILLAGE OFFICER KURICHITHANAM VILLAGE, MARANGATUPALLY PANCHAYAT PALAI, KOTTAYAM - 686 635.** **5. THE SECRETARY MARANGATUPALLY GRAMA PANCHAYAT, MARANGATUPALLY P.O., KOTTAYAM - 686 635.** - **R1 TO R4 BY GOVT. PLEADER SRI. BOBBY JOHN R5 BY ADV. SRI.SUNIL CYRIAC** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 31-05-2016, THE COURT ON 29-06-2016 DELIVERED THE FOLLOWING:** **Mn** **...2/-** ## **WP(C).No. 9375 of 2013 (V) --------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS :** ## **----------------------------------------** **EXT.P1 - TRUE COPY OF THE AGREEMENT FOR SALE ENTERED INTO BETWEEN BY THE PETITIONERS DATED 24-11-2006.** **EXT.P2 - TRUE COPY OF THE SETTLEMENT DEED NO.3049/98 OF SUBREGISTRAR, KURIVILANGAD DATED 4-12-2008. EXT.P3 - TRUE COPY OF THE PROPERTY TAX RECEIPTS AND KSEB CONSUMER DOCUMENTS. EXT.P4 - TRUE COPY OF THE JUDGMENT DATED 20-7-2010 IN WPC. NO.18633 OF 2010. EXT.P4(a) - TRUE COPY OF THE JUDGMENT IN ABDUL SHUKKOOR VS. DISTRICT COLLECTOR, ERNAKULAM AND OTHER. EXT.P5 - TRUE COPY OF THE ORDER NO.B8(A)5047/08 DATED 12-11-2010 ISSUED BY THE 3RD RESPONDENT** **EXT.P6 - TRUE COPY OF THE PROCEEDINGS NO.B8(A)5047/08 DATED 12-11-2010 ISSUED BY THE 3RD RESPONDENT. EXT.P7 - TRUE COPY OF THE ORDER NO.D.5187/10/K.DIS. DATED 7-9-2012 ISSUED BY 3RD RESPONDENT. EXT.P8 - TRUE COPY OF THE JUDGMENT DATED 5-11-2012 OF THIS HONOURABLE COURT IN WPC.NO.22133 OF 2012 EXT.P9TRUE COPY OF THE REVISION PETITION DATED 19-11-2012 FILED BEFORE THE 1ST RESPONDENT.** **EXT.P10 - TRUE COPY OF THE EXPENDITURE BILLS.** **EXT.P11 - TRUE COPY OF THE ORDER NO.B10(1)2012/57295/5 DATED 7-3-2013 ISSUED BY THE IST RESPONDENT.** ## **RESPONDENT(S)' EXHIBITS : NIL** ## **------------------------------------------------------------------** **//TRUE COPY//** **Mn** **P.A. TO JUDGE** ## **A.M.SHAFFIQUE, J * * * * * * * * * * * *** W.P.C.No.9375 of 2013 ---------------------------------------Dated this the 29[th] day of June 2016 ## **J U D G M E N T** Petitioners challenge Exts.P5, P6, P7 and P11 orders passed by the authorities under the Building Tax Act, 1975 (hereinafter referred to as 'the Act'). Petitioners also seek for a declaration that the petitioner is the owner of building No.VI/447 D and the 2[nd] petitioner is the owner in possession of building No.VI/447 E on the basis of ownership document issued by the 5[th] respondent as per Ext.P3 series. Ext.P5 is a notice issued by the Tahsildar Meenachal on 12/11/2010 by which the petitioner was informed that they are liable to pay luxury tax from 2008-2009. It is mentioned in Ext.P5 that building was constructed on 29/05/2008 and that assessment was made for an amount of Rs.5,400/- along with luxury tax from 2008-09 onwards. The 1[st] petitioner had transferred half undivided right and one portion of the building in the name of her husband, Antony as per registered settlement deed dated 04/12/2008. It was found that, since there were no documents to show that both of them together have incurred expenditure for constructing the building, they are liable to pay W.P.C.No.9375/2013 2 luxury tax. Ext.P6 is the demand made for luxury tax from 200809 onwards. Appeal was filed before the Revenue Divisional Officer, who, by Ext.P7 dated 07/09/2012 dismissed the same. 1[st] Petitioner challenged the aforesaid order by filing W.P.C.No.22133/2012. The writ petition was disposed of by permitting the 1[st] petitioner to file revision petition before the District Collector. Pursuant to the same, petitioner preferred a revision petition, which was disposed of as per Ext.P11 order. In Ext.P11, it is stated that the settlement deed dated 04/12/2008 cannot be taken as a document to assess the building separately. The building has to be assessed as a single unit and both the building tax and luxury tax has to be imposed on it. It is observed that the building is lying as a single unit and no materials are produced to show that it can be separately assessed. 2. While impugning the aforesaid order, the learned counsel for the petitioner placed reliance on the judgment of the Supreme Court in **State of Kerala v. Mammikutty** _[2015(3) KLT 138]_ wherein while considering the scope and effect of 5A of the Act, it was held at paragraph 14 as under: W.P.C.No.9375/2013 3 _“14. In this context, it is imperative to analyse what is meant by “residential building”. The definition in clause 2(l), means a building or any other structure or part thereof used for residential purpose and house or out-house or garage appurtenant to a building for more beneficial enjoyment. It excludes hotels, boarding places, lodges and the like. Thus, the expression “residential building” cannot be interpreted without reference to the term “building” and Explanation II to S.2(e) of the Act. Therefore, each residential building owned by single owner would be subjected to luxury tax, if it has the plinth area which exceeds 278.7 sq.mts. It makes no difference whether the residential building consists of one floor or it is two-storied or three-storied or consists of multiple flats or apartments. The entire plinth area in the residential building owned by a singular owner is required to be aggregated. It is noticeable that S.5A does not refer to aggregate plinth area of all the floors. The intention of the legislature is apparent that if a person is the owner of the plinth area of 278.7 sq.mts or more in one building, even if it consists of separate or distinct apartments, he would be liable to pay the luxury tax under S.5A of the Act. It also becomes further clear when the definition of “plinth area” in S.2(k) is properly appreciated. It clearly postulates that “plinth area” means the area included in the floor of the building and where building has_ W.P.C.No.9375/2013 4 _more than one floor aggregate area included in all the floors are taken together. The proviso to the said definition lays down that in case of a building referred to in the Explanation II to clause (e), the “plinth area” shall be calculated separately. Thus, S.2(k) has an insegragable nexus with the definition of “building”. Explanation II to S.2(e) which defines “residential building” only conveys about the building meant for residential purpose and what it includes. S.5A is the charging Section and as has been stated earlier, it commences with a non-obstante clause. It determines the annual luxury tax on all residential buildings having a plinth area of 278.7 sq. mts. or more. It provides a date for completion that is 1st April 1999. Though, it does not provide for aggregate it refers to residential building definition of which refers to a building. S.2(k) defines “plinth area” of the building. S.5A also includes “plinth area”. Though the term “aggregate” is not mentioned but the words therein are buildings having plinth area and in that context one is required to scan and analyse the meaning of the term “building” and the “plinth area” as defined under S.2(e) and 2(k) respectively. “Plinth area” as defined clearly provides that when one building has more than one floor, the aggregate area includes all the floors. To give an example, a building consisting of four storeys belongs to a single owner, the aggregate of all the floors are to be included for_ W.P.C.No.9375/2013 5 _calculation of the plinth area and thereby the computation of the luxury tax has to be determined as provided under Section 5A. Be it noted, the proviso to S.2(k) clearly stipulates that if a building as referred falls under Explanation II to S.2(e), the plinth area shall be calculated separately. The Explanation II refers to different apartments or flats owned by different persons. It also states that the cost of the construction of the building is to be met by all such persons jointly. This Explanation, as noted before, is required to be appositely understood. The learned counsel for the State would submit that if there is initial booking and the persons have contributed for the construction definitely there shall be separate computation. The Explanation II has to be read with S.5A which starts with a non obstante clause. S.5A as has been mentioned before refers to “residential building” having plinth area 278.7 sq. mts. or more and, therefore, the said provision also takes note of this definition. In view of the above, the contention advanced by the learned counsel for the State is difficult to accept. The definitions have to be given a proper construction. There can be a case where the owner erects a multi-storied building consisting 10 floors. He builds it at his own cost and thereafter he sells the apartments or flats to 10 persons and in that event he ceases to be the owner of the building. The 10 purchasers become the owners of flats and in such_ W.P.C.No.9375/2013 6 _a situation it will lead to an absurdity because one single person who once owned the entire building or several apartments, though has ceased to be the owner in law yet is asked to pay the luxury tax solely on the ground that at the time of construction there was no contribution by the purchasers or to put it differently there had been no prior booking. This is not the intention. The Explanation II to Section 2(e) has to be read harmoniously with proviso to S.2(k) and S.5A of the Act. The intention of the legislature as gatherable is that ownership of different flats and the cost of construction of building are met by all such persons. The meeting of the cost jointly is not to be narrowly construed to mean that there has to be an investment before the commencement of the construction of the building. The persons who purchase afterwards they really share the value of the construction cost apart from the profit margin due to the builder or the seller. Unless such an interpretation is placed, the original owner of flats when he ceases to be the owner of the building or the purchaser of a small apartment less then 278.7 square meters would still be liable to pay luxury tax. Such an interpretation would lead to absurdity.”_ 3. This is also a case where after construction, one portion of the building has been assigned by the 1[st] petitioner in favour of the 2[nd] petitioner. Ext.P2 is the settlement deed dated W.P.C.No.9375/2013 7 04/12/2008. By virtue of Ext.P2, 1[st] petitioner has settled in favour of the 2[nd] petitioner, her husband, one half right and the 1[st] floor of the building with the right to use the stair case. It is mentioned that the construction has not been completed and there is a separate stair case to the 1[st] floor. 4. Once the petitioner has settled one half undivided right of the property along with the right over the first floor of the building which has a separate entry, it amounts to sale or transfer of an apartment. The Apex Court held that when the building owner parts with the building, each apartment is segragable for the purpose of luxury tax. Though it is not an apartment complex, each floor of the building can be treated as an apartment as it has separate entrance and the right is transferred, each unit will have to be separately assessed for the purpose of luxury tax. However, for the purpose of building tax, there need not be any such segregation on account of the fact that the settlement deed was executed only on 04/12/2008 and the assessment was made as early as on 29/05/2008. Hence it is declared that, while the petitioners are liable to pay the building tax in terms of Section 5 read with Section 6, there is no W.P.C.No.9375/2013 8 obligation to pay luxury tax in terms of Section 5A, after 04/12/2008. In the aforesaid circumstances, this writ petition is disposed of as under: i) The impugned order charging luxury tax under Section 5A is set aside. However, the petitioners will be liable to pay the building tax, as assessed by the authorities. ii) Each building has to be separately assessed for the purpose of luxury tax under Section 5A. (sd/-) **(A.M.SHAFFIQUE, JUDGE)** jsr