Azad Rahim v. State of Kerala and Kollam Corporation and The Standing Committee for Taxes, Kollam Corporation

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **MONDAY, THE 22[ND] DAY OF MAY 2023 / 1ST JYAISHTA, 1945** ## **WP(C) NO.24012 OF 2010** ## **- PETITIONER :** AZAD RAHIM, AGED 58, S/O.A.A.RAHIM, MALIKAVEEDU, LAKSHMI NADA, KOLLAM – 691 001. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SRI.MAHESH V.MENON ## **- RESPONDENTS :** 1 STATE OF KERALA REPRESENTED BY THE SECRETARY TO GOVERNMENT, LOCAL SELF GOVERNMENT DEPARTMENT, GOVT.SECRETARIAT, THIRUVANANTHAPURAM – 695 001. 2 THE KOLLAM CORPORATION REP. BY ITS SECRETARY, KOLLAM P.O, KOLLAM DISTRICT, PIN – 691 001. 3 THE STANDING COMMITTEE FOR TAXES KOLLAM CORPORATION, KOLLAM DISTRICT, PIN – 691 001. BY ADVS. SRI.S.SREEKUMAR (KOLLAM) SMT.DEEPA NARAYANAN, SR.GP SRI.M.K.CHANDRA MOHAN DAS THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22.05.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO.24012 OF 2010 -: 2 :- ## JUDGMENT ## Dated this the 22nd day of May, 2023 This writ petition is filed seeking the following reliefs :- - “(i) To quash Ext.P10 notice issued by the 2[nd] respondent by the issue of a writ of certiorari or such other writ or order or direction. - (ii) To grant the petitioner such other incidental reliefs including the costs of these proceedings. - (iii) To quash Ext.P11 intimation issued by the 2[nd] respondent by the issue of a writ of certiorari or such other writ or order or direction.” 2. Heard the learned counsel for the petitioner and the learned Standing Counsel appearing for the respondent Corporation. 3. It is submitted by the learned counsel for the petitioner that the petitioner, who is a co-owner of a building housing a resort and a restaurant, was served with Ext.P1 notice demanding property tax for the year 1995-'96 to 2004-'05. It is submitted that though Ext.P1 notice is dated 27.11.2004, the demand raised was in respect of property tax for the year 1995-'96 to 2004-'05. The petitioner submitted Ext.P2 objection to the same. However, Ext.P3 notice was issued on 2.6.2005 WP(C) NO.24012 OF 2010 -: 3 :- requiring the petitioner to remit the amounts. Thereafter, the petitioner submitted an appeal before the Appeal Standing Committee for Taxes, which was also rejected and the demand was reiterated by Ext.P6. Against Ext.P6 order, though the petitioner filed W.P.(C) No.20177/2009 before this Court, by judgment dated 20.7.2009, this Court relegated the petitioner to the remedy under the statute against Ext.P6 order. It is submitted that against the said judgment, the petitioner filed W.A.No.2051/2009 and by judgment dated 22.9.2009, a Division Bench of this Court held that the demand raised against the petitioner without passing an order of assessment of property tax is improper and illegal. The demand notice was, therefore, set aside and the matter was remitted back to the Corporation to consider the assessment afresh after giving opportunity to the petitioner to put forth his case as contended in the writ petition as well as in the writ appeal. The conditional order directing the petitioner to remit an amount of Rs.3 lakhs was also passed by this Court. 4. It is submitted that thereafter also, the petitioner submitted Ext.P9 before the Secretary, but without considering WP(C) NO.24012 OF 2010 -: 4 :- the same and without issuing any order of assessment, Ext.P10 notice was again issued to the petitioner requiring him to pay an amount of Rs.21,50,196/- within 15 days. An interim order was rendered by this Court on 25.9.2019 requiring the 2[nd] respondent to place on record the order mentioned in Ext.P10 as per which tax assessment against the petitioner was completed pursuant to the directions in Ext.P7 judgment. The respondents were also required to explain the action taken consequent to Ext.P8 and whether the petitioner was heard based on his objections in Ext.P9. 5. Thereafter, the petitioner had been put on notice and heard and Ext.P11 proceedings were issued on 17.5.2022. In Ext.P11, it is stated for the first time that an assessment was conducted with respect to property tax of the property in question in the year 1998. It is further stated that since the petitioner did not pay the tax demanded as per the assessment, the time limit provided in Section 539 of the Kerala Municipality Act is not applicable to the petitioner. On the said reason, the petitioner's objections are rejected and the petitioner is required to pay the amounts demanded. WP(C) NO.24012 OF 2010 -: 5 :- 6. The learned counsel for the petitioner submits that the fact that an assessment order had been passed as provided in the Act in the year 1998 had not been pleaded in the earlier round of litigation and a Division Bench of this Court by Ext.P7 judgment had specifically found that there was no order of assessment. Thereafter, it is not open to the respondents to now contend that there was an order of assessment in existence. Further, it is submitted that no such order of assessment is produced by the respondents even though they have placed detailed pleadings on record. It is further contended that the specific contention of the petitioner that the amounts demanded fall foul of Section 539 of the Kerala Municipality Act and that no demand or distraint can be raised with reference to amounts which fell due more than three years prior to the date of demand is also not answered in Ext.P11. 7. A statement has been placed on record by the 2[nd] respondent contending that the petitioner had constructed an unauthorised building in Ward No.25 of the Kollam Corporation and the same was being used as an auditorium. The said building and the accessory buildings have been assessed as unauthorised WP(C) NO.24012 OF 2010 -: 6 :- and number was allotted under Section 242 of the Kerala Municipality Act, 1994 and tax was imposed in the year 1998 fixing the tax from 1995-'96. It is submitted that the petitioner had filed a writ petition in connection with demand for arrears of tax from 1995-'96 to 2016-'17. It is stated that arrears are due in respect of five building numbers of the petitioner and the details are given in the statement as below :- “1) MC 25/UA/263A Annual tax - 35175 Arrears of tax from 1995-96 to 2016-17 - 35175 x 22 = 773850/Library Cess 1759 x 22 = 38698/Penal interest - 968016/2) MC 25/UA/263B Annual tax - 17588/Arrears of tax from 1995-96 to 2016-17 - 17588 x 22 = 386936/Library Cess 879 x 22 = 19338/Penal interest - 484022/3) MC 25/UA/263C Annual tax - 4988 Arrears of tax from 1995-96 to 2016-17 - 4988 x 22 = 109736/Library Cess 249 x 22 = 5478/Penal interest - 137270/4) MC 25/UA/263D Annual tax - 3553 Arrears of tax from 1995-96 to 2016-17 - 3553 x 22 = 78166/Library Cess 178 x 22 = 3916/Penal interest - 97779/5) MC 25/UA/263E Annual tax - 4253 Arrears of tax from WP(C) NO.24012 OF 2010 -: 7 :- |1995-96 to 2016-17|-|4253 x 22 = 98566/-| |---|---|---| |Library Cess|-|213 x 22 = 4686/-| |Penal interest|-|117043/-| |Total arrears of tax|-|14,42,254/-| |Total Library Cess|-|72,116/-| |Total Penal Interest|-|18,04,130/-| |Total amount due|-|33,18,500/-| It is stated that in terms of the Government Order dated 7.11.2016, penal interest can be dispensed with if the entire amount is paid before 30.12.2016. 8. I have considered the contentions advanced. The petitioner had earlier approached this Court challenging Ext.P1 notice as well as the orders passed by the appellate authority as Ext.P6. The writ petition was initially dismissed, but by Ext.P7 judgment, a Division Bench of this Court found that there was no assessment supporting the demand raised against the petitioner. The Writ Appeal was, therefore, disposed of directing the Corporation to consider the assessment afresh, after giving opportunity to the petitioner. It appears that nothing was done by the Corporation thereafter. It is only pursuant to the interim order passed by this Court in this writ petition that the matter was reconsidered and the petitioner was heard. Thereafter, Ext.P11 proceedings have been issued on 17.5.2022. This Court, WP(C) NO.24012 OF 2010 -: 8 :- in Ext.P7 judgment, which has become final, had found that there is no order of assessment of property tax as against the petitioner. However, it is now stated in Ext.P11 proceedings that an assessment was completed against the petitioner in the year 1998. However, the copy of the order of assessment is not produced even in spite of the specific directions issued by this Court. A statement filed by the 2[nd] respondent on 29.11.2016 also does not contain a copy of the assessment order. Further, with regard to the specific contention raised by the petitioner in terms of Section 539 of the Kerala Municipality Act, it is contended that the said provision is not applicable in the instant case since the property tax had been assessed in accordance with Section 242. 9. The learned counsel for the petitioner places reliance on the decision of this Court in Payyannur Tourism Hotel v. Secretary, Payyannur Municipality [2022 (4) KLT 895] in support of the contention that no demand for property tax is sustainable in respect of amounts which admittedly fell due three years prior to the notice of the demand. An order of a Division Bench of this Court in The Bharat Sanchar Nigam Ltd. v. State of Kerala and WP(C) NO.24012 OF 2010 -: 9 :- Ors. [MANU/KE/1492/2018 (R.P.No.411/2018 in W.A.2620/2017)] is also relied on to contend that the respondents cannot proceed to recover dues subsisting three years prior to the demand raised by them. The learned counsel also places reliance on the decisions of this Court in K.Musthafa v. State of Kerala [2001 (Vol.122) Sales Tax Cases 565] and in Tharu v. Tahsildar [2003 (1) KLT 219] to contend that a proper assessment order has to be the basis on which a demand has to be raised. 10. Having considered the contentions advanced, I am of the opinion that since Ext.P7 judgment of the Division Bench of this Court has become final inter parties, the question with regard to the requirement or the existence of an assessment order cannot be raised by the respondents in these proceedings. The Division Bench of this Court had specifically found that there is no order of assessment of property tax and that the demand raised without such an assessment was illegal and improper. The matter had been remanded to the Corporation for passing an order of assessment after hearing the petitioner. Admittedly, such an exercise has not been undertaken by the respondent even as on today. The specific contention of the petitioner that WP(C) NO.24012 OF 2010 -: 10 :- the respondents cannot raise a demand with regard to amounts which fell due three years before the date of the demand also has not been considered in its proper perspective in Ext.P11. I am of the clear opinion that Ext.P11 proceedings are in clear violation of the directions contained in Ext.P7 judgment. In the above view of the matter, I am of the opinion that Ext.P11 proceedings cannot survive in the light of the specific directions contained in Ext.P7. Ext.P11 proceedings are, therefore, set aside. It will be open to the respondents to pass a fresh order of assessment in respect of the property, after hearing the petitioner and considering his contentions as well. However, it is made clear that the provisions of Section 539 of the Kerala Municipality Act shall be taken note of while raising any demand against the petitioner in terms of the assessment order, if any issued. This writ petition is ordered accordingly. Sd/ANU SIVARAMAN JUDGE Jvt/23.5.2023 WP(C) NO.24012 OF 2010 -: 11 :- ## **APPENDIX OF WP(C) 24012/2010** PETITIONER EXHIBITS :- Exhibit P1 COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT. Exhibit P2 COPY OF OBJECTION FILED BY THE PETITIONER. Exhibit P3 COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT. Exhibit P4 COPY OF OBJECTION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. Exhibit P5 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT. Exhibit P6 COPY OF ORDER ISSUED BY THE 3RD RESPONDENT. Exhibit P7 COPY OF JUDGMENT IN WA No.2051/09 OF THIS HON'BLE COURT. Exhibit P8 COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT. Exhibit P9 COPY OF OBJECTION FILED BY THE PETITIONER. Exhibit P10 COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT. Exhibit P11 COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT.