High Court of KeralaDivision Bench2014-12-19Writ appeal is dismissed accordingly, affirming...

K.N. Aravindakshan & T.K. Geetha v. The Tahsildar, Chittur; The Revenue Divisional Officer, Palakkad; The District Collector, Palakkad

Case / Petition Number:WA.No.1571/2012; WP(C).3296/2008

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Antony Dominic
Anil K. Narendran
Judgment Date: 2014-12-19
Court Decision / Holding: Writ appeal dismissed; the judgment of the learned Single Judge is affirmed; no interference with Ext.P10 order and Ext.P12 demand notice; the entire building is treated as a single unit for luxury tax purposes under Section 5A.
Final Disposition: Writ appeal is dismissed accordingly, affirming the Single Judge's order; no relief granted to the appellants.

Parties to the Case

Appellants / Petitioners

K.N. ARAVINDAKSHAN
T.K. GEETHA

Respondents

THE TAHSILDAR, CHITTUR, PALAKKAD DISTRICT-678101
THE REVENUE DIVISIONAL OFFICER, PALAKKAD-678001
THE DISTRICT COLLECTOR, PALAKKAD-678001

Legal Representation & Advocates

Counsels for Petitioners

• Sri V.G. Arun
• Sri T.R. Harikumar

Counsels for Respondents

• Sri Sebastian Champapilly (Sr. Government Pleader)

Case Synopsis & Summary

The appellants, K.N. Aravindakshan and T.K. Geetha, challenged Exts.P10 (order) and P12 (demand notice) seeking a writ of certiorari to quash luxury tax levied under Section 5A of the Kerala Building Tax Act, 1975, and a declaration that two structures bearing Nos. 23/328A and 23/328B are distinct buildings not liable for luxury tax. The Single Judge declined to interfere, directing the appellants to clear the outstanding tax within a month to avoid interest, failing which steps would be taken to realize the dues with interest. The High Court, hearing the Writ Appeal, upheld the learned Single Judge’s order, finding no basis to treat the two portions as separate buildings. The court relied on Section 2(e) and its Explanation 2, which creates a separate-building presumption only when different apartments owned by different persons exist and the construction costs were borne jointly. It noted that Exts.P1 and P3 plans are in the joint names of the appellants, and there is no proof that the first floor’s construction costs were borne by the second appellant or that the two floors are owned by different persons. Consequently, the entire building is taxed as a single unit, and the appeal was dismissed. The decision also references governing authorities on building tax and the interpretation of Explanation 2 in light of Abdulla’s pronouncements on 278.7 sq.m. threshold.

Provisions of Law Cited

Kerala Building Tax Act, 1975 - Section 2(e) (definition of building)Kerala Building Tax Act, 1975 - Section 5A (Charge of building tax)Kerala Building Tax Act, 1975 - Section 5 (general provision on building tax)Explanation 2 to Section 2(e)Kerala Finance Act, 2014 (reference to as to the act under which changes post-1999 were considered)

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellants argued that the second floor (first floor) was separately constructed and separately numbered, with a distinct building number and even a separate electric connection. They contended that the portion with plinth area of 113.82 sq.m. belonged exclusively to the second appellant and that, therefore, the ground floor and first floor could not be clubbed for building tax assessment. Relying on Explanation 2 to Section 2(e) of the Kerala Building Tax Act, 1975, they argued that if different apartments owned by different persons exist and construction costs were met jointly, each flat should be treated as a separate building for assessment, thus avoiding luxury tax under Section 5A if the area falls outside the threshold. They urged quashing of Exts.P10 and P12 and declaring the two portions as distinct buildings.

Contentions of Respondents

The respondents contended that Exts.P1 and P3 permits were in the joint names of the appellants and there is no evidence showing that the first floor’s construction costs were borne by the second appellant or that the two floors are owned by different persons. They argued that Explanation 2 of Section 2(e) requires proof of separate ownership and joint construction costs; lacking this, the two floors must be treated as a single building for the purpose of luxury tax assessment. They relied on the controlling authority that Section 5A applies to buildings meeting the 278.7 sq.m threshold, considering the plinth area of the building as a whole (including additions post-1999), and on Abdulla and related Full Bench decisions to support corporate interpretation and measurement approach. The appeal sought to uphold the tax assessment and demand notices.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
District Collector v. Sreekumari Kunjamma	2011 (1) KLT 248	Positive	Full Bench held that separate assessment is required under Explanation 2 of Section 2(e) only if the building consists of different apartments owned by different persons and construction costs were borne jointly.
Varghese P.D. and others v. State of Kerala and others	2013 (2) KLT 831	Positive	Division Bench followed that to claim the benefit of Explanation 2 to Section 2(e), it must be proved that the building consists of different apartments owned by different persons and that the construction costs were made by all such persons jointly.
State of Kerala v. Abdulla	2012 (1) KLT 178	Positive	Full Bench held that Section 5A applies to residential buildings whose plinth area after post-1999 additions reaches/exceeds 278.7 sq.m., and that the plinth area must be considered as a whole including additions after 1.4.1999.

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Extracted Judgment Text

Exact text extracted from official judgment records.

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **FRIDAY, THE 19TH DAY OF DECEMBER 2014/28TH AGRAHAYANA, 1936** **WA.No. 1571 of 2012 () IN WP(C).3296/2008** **-------------------------------------------** **AGAINST THE JUDGMENT IN WP(C) 3296/2008 of HIGH COURT OF KERALA DATED 12-04-2012** **------------------------------------** ## **APPELLANTS/PETITIONERS:** **---------------------** ## **1. K.N.ARAVINDAKSHAN,** **PUNARTHAM, SREEKURUMBAKAVU, THATHAMANGALAM P.O. PALAKKAD.** **2. T.K.GEETHA, PUNARTHAM, SREEKURUMBAKAVU, THATHAMANGALAM P.O. PALAKKAD.** **BY ADVS.SRI.V.G.ARUN SRI.T.R.HARIKUMAR** ## **RESPONDENTS/RESPONDENTS:** ## **-------------------------** ## **1. THE TAHSILDAR** ## **CHITTUR, PALAKKAD DISTRICT-678101.** ## **2. THE REVENUE DIVISIONAL OFFICER PALAKKAD-678001.** ## **3. THE DISTRICT COLLECTOR** ## **PALAKKAD-678001.** ## **R BY SR.GOVERNMENT PLEADER, SRI.SEBASTIAN CHAMPAPILLY** **THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 19-12-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **W.A.No.1571/2012** ## **APPENDIX** **ANNEXURE-1: COPY OF THE LEASE DEED DT.06.04.2010 EXECUTED BY THE 2ND APPELLANT. ANNEXURE-II: COPY OF THE LEASE DEED DT.21.11.2011 EXECUTED BY THE 2ND APPELLANT. ANNEXURE-III: COPY OF THE OCCUPANCY CERTIFICATE DT.24.11.2011 ISSUED BY THE SECRETARY, CHITTUR - THIRUVANANTHAPURAM MUNICIPALITY.** ## **//TRUE COPY//** **PA TO JUDGE** ## **ANTONY DOMINIC & ANIL K. NARENDRAN, JJ.** - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ## **W.A.No.1571 OF 2012** - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 19[th] day of December, 2014 ## **JUDGMENT** ## _**Anil K. Narendran, J.**_ The appellants are the petitioners in W.P.(C)No.3296/08. They have filed the said Writ Petition seeking a writ of certiorari to quash Exts.P10 order and P12 demand notice and for a declaration that their buildings bearing Nos.23/328A and 23/328 B are distinct and separate and are not liable for luxury tax under Section 5A of the Kerala Building Tax Act, 1975. The learned Single Judge by the judgment under appeal declined to interfere with the said order and demand notice. It was further clarified that if the appellants satisfy the entire outstanding liability towards luxury tax under Section 5A of the said Act, within one month from the date of receipt of a copy of the judgment, no interest shall be realised from them. If the payment is not effected within the time as aforesaid, the respondents were directed to proceed with further steps for realisation of the entire amounts with interest and such other amounts, if any, by resorting to W.A.No.1571 OF 2012 : 2 : appropriate steps in accordance with law. It is aggrieved by the judgment of the learned Single Judge, the appellants are before us in this Writ Appeal. 2. We heard the arguments of the learned counsel for the appellants and also the learned Senior Government Pleader appearing for the respondents. 3. Appellants are husband and wife. They have constructed a building on the basis of Ext.P1 building permit, which is having a total plinth area of 136.49 sq.m. On completion of the construction, the same was subjected to assessment for building tax under Section 5 of the Act and as per Ext.P2 assessment order the plinth area was fixed as 174.33 sq.m. and the tax demanded was satisfied by the appellants. 4. Few years thereafter, the appellants wanted to construct the first floor, for which an application was submitted before the concerned local authority. After considering the said application, Ext.P3 building permit was granted to the appellants on 31.3.1999. The case of the appellants is that the said portion having a plinth area of '113.82' sq.m. has been separately constructed and numbered by the local authority, W.A.No.1571 OF 2012 : 3 : giving a different building number and that a separate electric connection has also been provided to the said portion. As borne out from Ext.P6, the contention raised by the appellants before the third respondent was that the said portion exclusively belonged to the second appellant i.e., the wife of the first appellant and that under no circumstance, could both these buildings be clubbed together for the purpose of assessment. ## 5. Section 2(e) of the Kerala Building Tax Act reads as follows: _“building” means a house, out-house, garage or any other structure, or part thereof, whether of masonry, bricks, wood, metal or other material but does not include any portable shelter or any shed constructed principally of mud, bamboos, leaves, grass or thatch or a latrine which is not attached to the main structure;_ Going by explanation 2 of Section 2(e), 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. 6. In District Collector Vs. Sreekumari Kunjamma (2011 (1) KLT 248) a Full Bench of this Court held that, separate assessment of each and every flat is called for, only in respect of constructions covered by W.A.No.1571 OF 2012 : 4 : Explanation 2 of Section 2(e) of the Act. Following the Full Bench judgment referred to above, a Division Bench of this Court in Varghese P.D. and others Vs. State of Kerala and others (2013 (2) KLT 831) held that, in order to claim the benefit of explanation 2 to Section 2(e) of the Act, it must be proved that the building consists of different apartments/flats owned by different persons and that the cost of construction of the buildings was made by all such persons jointly. Only if this condition is fulfilled, it can be treated as separate building for the purpose of assessment of tax. 7. Section 5A of the Act deals with _Charge of building tax_ . As per Sub Section (1) of Section 5A of the Act, as it stood prior to the Kerala Finance Act 2014, notwithstanding anything contained in this Act, there shall be charged a luxury tax of two thousand rupees annually on all residential buildings having a plinth area of 278.7 square meters or more and completed on or after the 1[st] day of April, 1999. A Full Bench of this Court in _**State of Kerala v. Abdulla (2012 (1) KLT 178)**_ has held that, Section 5A of the Act applies to residential buildings, the plinth area of which after extensions or additions made after 1.4.1999 reach or W.A.No.1571 OF 2012 : 5 : exceed 278.7 sq.mts. The Full Bench further held that, the plinth area of building as a whole has to be considered with additions or extensions made after 1.4.1999. 8. The contention of the appellants that, the total plinth area of the building does not exceed 278.7 sq.mts. has been rejected in Et.P6 order, after measuring the building in their presence. The said finding in Ext.P6 cannot be interfered with by this Court, in the absence of any vitiating circumstances pointed out by the appellants. The further contention of the appellants is that, since the Municipality has numbered the ground floor and the first floor of the building independently and the said buildings are having separate electric connections, the plinth area of both floors should not be taken into account for charging luxury tax under Section 5A of the Act. We are unable to agree. Going by explanation 2 to Section 2(e) of the Act, in order to contend that the ground floor and the first floor of the building should not be taken into account for charging luxury tax, the appellants will have to establish that those different floors are owned by different persons, and further the cost of construction was made by all such W.A.No.1571 OF 2012 : 6 : persons jointly. Exts.P1 and P3 building permits are in the joint name of the appellants. There is absolutely no materials to show that the cost of construction of the first floor was made by the second appellant. In the absence of any documents to show that the ground floor and first floor of the building are owned by different persons and that the cost of construction was made by all such persons jointly, the respondents can not be found fault with in treating the entire building as a single unit. 9. In such circumstances, the reasoning of the learned Single Judge in the impugned judgment in upholding Ext.P10 order and Ext.P12 demand notice cannot be found fault with. We find absolutely no ground to interfere with the judgment of the learned Single Judge. Writ appeal is dismissed accordingly. _Sd/-_ **ANTONY DOMINIC, Judge** _Sd/-_ **ANIL K. NARENDRAN, Judge** _jes_