Gijo George v. State of Kerala and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **WEDNESDAY, THE 1ST DAY OF FEBRUARY 2017/12TH MAGHA, 1938** ## **WP(C).No. 7604 of 2014 (A)** **---------------------------** **PETITIONER(S):** **-----------------------** **GIJO GEORGE, S/O.M.J. GEORGE, MUKKADAYIL HOUSE, C.P. UMMER ROAD, ERNAKULAM, KOCHI-35.** **BY ADVS.SRI.K.I.MAYANKUTTY MATHER, SRI.ARUN KUMAR.P.** **RESPONDENT(S):** - **--------------------------1. STATE OF KERALA, REPRESENTED BY PRINCIPAL SECRETARY (REVENUE), SECRETARIAT, THIRUVANANTHAPURAM- 695 001.** **2. THE TAHSILDAR, KANAYANNUR TALUK, ERNAKULAM-682 313.** **3. DISTRICT COLLECTOR, ERNAKULAM -682 030.** **BY GOVT. PLEADER SMT.N.M. JASMINE.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01-02-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** rs. ## **WP(C).No. 7604 of 2014 (A)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:-** - **EXHIBIT P1 COPY OF THE OCCUPANCY CERTIFICATE/OWNERSHIP CERTIFICATE ISSUED BY THE THRIKKAKARA GRAMA PANCHAYATH DATED 14/10/1992.** - **EXHIBIT P2 COPY OF LICENCE ISSUED BY THE LOCAL AUTHORITY FOR THE PERIOD 1993-94 DATED 13/08/1993.** - **EXHIBIT P2(A) COPY OF LICENCE ISSUED BY THE LOCAL AUTHORITY FOR THE PERIOD UPTO 1998 DATED 07/02/1998.** - **EXHIBIT P2(B) COPY OF LICENCE ISSUED BY THE LOCAL AUTHORITY FOR THE PERIOD UPTO 31.03.2000 DATED 03/12/1999.** - **EXHIBIT P2(C) COPY OF LICENCE ISSUED BY THE LOCAL AUTHORITY FOR THE PERIOD 2002-03 DATED 13/09/2002.** - **EXHIBIT P2(D) COPY OF LICENCE ISSUED BY THE LOCAL AUTHORITY FOR THE PERIOD 2004-05 DATED 20/11/2004.** - **EXHIBIT P2(E ) COPY OF LICENCE ISSUED BY THE LOCAL AUTHORITY FOR THE PERIOD 31/03/2006 DATED 02/06/2005.** - **EXHIBIT P2(F) COPY OF LICENCE ISSUED BY THE LOCAL AUTHORITY FOR THE PERIOD 31/03/2007 DATED 18/07/2006.** - **EXHIBIT P2(G) COPY OF LICENCE ISSUED BY THE LOCAL AUTHORITY FOR THE PERIOD 31/03/2008 DATED 18/09/2007.** - **EXHIBIT P2(H) COPY OF LICENCE ISSUED BY THE LOCAL AUTHORITY FOR THE PERIOD 31/03/2009 DATED 06/06/2008.** - **EXHIBIT P3 COPY OF THE RECEIPT EVIDENCING REMITTANCE OF D & O LICENSE FEE OF THE BUILDING (1994-95 TO 1996-97) DATED 05/02/1998.** - **EXHIBIT P3(A) COPY OF THE RECEIPT EVIDENCING REMITTANCE OF D & O LICENSE FEE OF THE BUILDING (1997-98) DATED 05/02/1998.** - **EXHIBIT P3(B) COPY OF THE RECEIPT EVIDENCING REMITTANCE OF D & O LICENSE FEE OF THE BUILDING (1998-99) DATED 28/10/1998.** **....2/-** ## **WP(C).No. 7604 of 2014 (A)** - **EXHIBIT P3(C) COPY OF THE RECEIPT EVIDENCING REMITTANCE OF D & O LICENSE FEE OF THE BUILDING (1999-00) DATED 02/11/1999.** - **EXHIBIT P3(D) COPY OF THE RECEIPT EVIDENCING REMITTANCE OF D & O LICENSE FEE OF THE BUILDING (2001-02 AND 2002-03) DATED 07/09/2002.** - **EXHIBIT P3(E) COPY OF THE RECEIPT EVIDENCING REMITTANCE OF D & O LICENSE FEE OF THE BUILDING (2007-08) DATED 27/02/2007.** - **EXHIBIT P3(F) COPY OF THE RECEIPT EVIDENCING REMITTANCE OF D & O LICENSE FEE OF THE BUILDING (2008-09) DATED 20/02/2008.** - **EXHIBIT P4 COPY OF THE PROPERTY TAX DEMAND NOTICE DATED 12/11/1993.** - **EXHIBIT P4(A) COPY OF THE PROPERTY TAX RECEIPT FOR THE PERIOD 1996-97 DATED 08/04/1997.** - **EXHIBIT P4(B) COPY OF THE PROPERTY TAX RECEIPT FOR THE PERIOD 1997-98 DATED 22/11/1997.** - **EXHIBIT P4(C) COPY OF THE PROPERTY TAX RECEIPT FOR THE PERIOD 1999-02 DATED 20/06/2002.** - **EXHIBIT P4(D) COPY OF THE PROPERTY TAX RECEIPT FOR THE PERIOD 2006-07 DATED 30/01/2007.** - **EXHIBIT P4(E) COPY OF THE PROPERTY TAX RECEIPT FOR THE PERIOD 2007-08 DATED 15/02/2008.** - **EXHIBIT P5 COPY OF THE SETTLEMENT DEED NO. 4305/2007 OF THRIKKAKARA SUB REGISTRY OFFICE DATED 03/10/2007.** - **EXHIBIT P6 COPY OF THE NOTICE ISSUED BY THE 2ND RESPONDENT DATED 03/02/2014.** - **EXHIBIT P7 COPY OF THE REPLY FILED BY THE PETITIONER DATED 21/02/2014.** - **EXHIBIT P8 COPY OF THE ASSESSMENT ORDER UNDER THE KERALA BUILDING TAX ACT DATED 07/03/2014.** - **EXHIBIT P8(A) COPY OF THE DEMAND NOTICE ISSUED BY THE RESPONDENT DATED 07/03/2014.** **RESPONDENT'S EXHIBITS:NIL.** **//TRUE COPY//** ## **P.S. TO JUDGE** rs. ## **K. VINOD CHANDRAN, J.** -----------------------------------------W.P.(C) No. 7604 of 2014 (A) -----------------------------------------Dated: 1[st] February, 2017 ## **J U D G M E N T** The petitioner is aggrieved with the order of assessment made under Ext.P8 and a notice of demand made under Ext.P8(a), invoking the provisions of the Kerala Building Tax Act, 1975 ('Act' for short). 2. The petitioner obtained title to the property and the building by way of a settlement deed, at Ext.P5 dated 03.10.2007. The building is said to have been originally constructed for a factory and though the same was constructed in the year 1992, no return was filed since there was a claim of exemption under Section 3 of the Act. There was also no assessment proceedings taken against the building. Subsequently, the petitioner obtained the land and building by Ext.P5. ## **W.P.(C) No. 7604/2014** **-2-** The petitioner converted it as a godown and in such circumstance, the petitioner was issued with an order of assessment under Section 3B of the Act. 3. The petitioner's contention is that the building itself was used as a factory from 1992 to 2007 and the incidence of levy under Section 5 of the Act, being on the completion of the building and the purpose for which it was built being to run a factory, there could be no subsequent levy on the change of user. Further, it is contended that the claim of exemption, as per sub section (2) of Section 3 of the Act, has to be considered by the Government and when there is a denial of such exemption, the same also has to be considered by the Government. 4. The contention that the incidence of levy is at the time of completion is correct, but, however, Section 3B of the Act takes care of situations where there is ## **W.P.(C) No. 7604/2014** **-3-** change of user of the building. Section 3B speaks of misuse of exemption, which could only be a change of user, which user is not eligible for an exemption under the Act. The provision also speaks of penal interest at the rate of 12% per annum from the date of completion of the building, which, however, could be levied only if there is a contumacious conduct and a deliberate intent to misuse, after claiming exemption. 5. The contention with respect to the exemption possible of being cancelled only by the Government, cannot be countenanced in the facts of the case. In the present case, there was no exemption as such granted to the petitioner's father. The petitioner's father, who had constructed the building, did not, admittedly, file any return. There was never any claim raised nor was exemption granted and hence there is no question of a cancellation. The petitioner relies on the decision ## **W.P.(C) No. 7604/2014** **-4-** reported in **Victory Paper and Boards (India) Ltd. v. R.D.O. - 2000 (2) KLT SN 83** to urge the exclusive jurisdiction of the Government to consider exemptions. That was a case in which the assessing officer declined reference to the Government for consideration of the claim of exemption. The Division Bench of this Court held that the minute a claim of exemption under Section 3 is raised the matter has to be referred to the Government. Here there is no subsisting claim for exemption and admittedly now the petitioner is not using the building as a factory. 6. The contention of the petitioner is only that the building was used as a factory and then converted to a go-down after the same was settled in his name in the year 2007. The petitioner has produced a number of documents to substantiate his contention that the building at the time of construction was intended to be ## **W.P.(C) No. 7604/2014** **-5-** used as a factory. However, even then; there ought to have been a return filed under the Act and if entitled to exemption, a specific claim made on that account ought to have been granted by the Government. Now, admittedly, the building is used as a go-down, which definitely is not entitled to any exception under the Act. At least on such conversion of user, it was incumbent on the petitioner to have filed a return. 7. None of this having been done, it was perfectly within the jurisdiction of the assessing authority to proceed to assess the building regularly or under Section 3B of the Act. According to this Court, the building tax being a one-time tax on change of user there could now be no exemption claimed from the assessment. The fact that the building was, at the time of construction and thereafter for a considerable period, used as a factory would not also absolve the liability ## **W.P.(C) No. 7604/2014** **-6-** when there is a change of user; to one which is not entitled to exemption. It would also be futile to refer the question to the Government for consideration of exemption when, as of now, the building is used for a different purpose which does not entitle a claim for exemption. The petitioner having admitted to the use of the building as a go-down and there being no return filed or exemption claimed, there could be an assessment made under the Act especially since the building, admittedly, was constructed after that appointed day. 8. However, the assessment having been taken up under Section 3B, interest was levied. It has to be examined as to whether the building was constructed in the year 1992 and carried on as a factory during the said period. If the petitioner's father had carried on the factory in the said building from 1992 to 2007, then, **-7-** ## **W.P.(C) No. 7604/2014** necessarily, there is no reason why the penal provision should be invoked. 9. In such circumstance, Exts.P8 and P8(a) have to be re-quantified only on the interest aspect. To facilitate such re-quantification, Exts.P8 and P8(a) are set aside. It is made clear that the assessment, as such, is upheld and the same has to be done, in any event, from 2007 or the date from which the factory ceased to operate, at the rates applicable at that point of time. The interest component would be re-quantified on the basis of the directions herein above, on the petitioner submitting evidence to substantiate the claim of exemption for the prior period. There would be no requirement for referring the claim to the Government since, as of now, there can be no claim for exemption. Hence if the petitioner substantiates the claim of a factory having been run in the building, then, there need be no penal ## **W.P.(C) No. 7604/2014** **-8-** interest charged for the prior period. The writ petition, hence, would stand disposed of with the above directions. Sd/K.VINOD CHANDRAN, JUDGE jjj 2/2/17