High Court of KeralaSingle Judge2012-05-28Writ petition dismissed; liberty to pursue liab...

Latha R. Nair v. State of Kerala and Tahsildar, Kanayannur Taluk, Ernakulam

Case / Petition Number:WP(C).No. 1184 of 2007 (N)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P. R. Ramachandra Menon
Judgment Date: 2012-05-28
Court Decision / Holding: Writ petition dismissed; interference is declined. The building is not to be separately assessed; petitioner may pursue proportionate liability against other parties to recover her share in accordance with law.
Final Disposition: Writ petition dismissed; liberty to pursue liability against others for proportionate share

Parties to the Case

Appellants / Petitioners

Latha R. Nair

Respondents

State of Kerala represented by Secretary, Taxes Department, Thiruvananthapuram
Tahsildar, Kanayannur Taluk, Ernakulam

Legal Representation & Advocates

Counsels for Petitioners

• P. K. Ravisankar

Counsels for Respondents

• Govt. Pleader, Noble Mathew

Case Synopsis & Summary

This Kerala High Court writ petition concerns whether the petitioner, Latha R. Nair, who acquired an undivided 1/6th share in land and engaged in construction via a builder, is entitled to separate assessment under Explanation 2 to Section 2(e) of the Kerala Building Tax Act, rather than being assessed as a single building. The petitioner contends that six co-owners funded and participated in the erection of a multi-storied building (TR Residency) with multiple flats; she submitted Exts. P3 to P6 for separate assessment and sought relief under the statutory provision. The Assessing Authority treated the building as a single unit, levying tax under Section 5 and Section 5A on the aggregate, arguing lack of tangible material for separate assessment and that a construction agreement need not be registered for such assessment. The government pleader emphasizes that there is no bonafide basis for separate assessment, pointing to occupancy declarations and the owner’s action of constructing and transferring flats, asserting that the petitioner did not arrange funds as claimed. After examining the documents (Exts. P1–P11) and the case file, the court rejects the petitioner’s plea for separate assessment, noting inconsistencies with Ext. P1 and the overall statutory framework, and concludes the petition lacks merit. The court dismisses the writ petition, but allows the petitioner to pursue liability against other co-owners to recover proportionate shares.

Provisions of Law Cited

Kerala Building Tax Act, Explanation 2 to Section 2(e)Kerala Building Tax Act, Section 5Kerala Building Tax Act, Section 5A

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner argues that she is entitled to separate assessment for her flat under Explanation 2 to Section 2(e) of the Kerala Building Tax Act, rather than a single combined assessment. She produced documents (Exts. P1–P11) showing undivided ownership and funding through loans and construction agreements to justify separate assessment for a multi-flat building, asserting that the scheme of the Act and precedents imply entitlement to separate levy. She contends that the registration requirement for the construction agreement should not defeat the right to separate assessment, and that the assessment records (Exts. P5–P6) do not reflect the true structure of ownership and liability. The petitioner maintains that there is material to support separate assessment, and the decision Bavasons Constructions (P) Ltd. v. State of Kerala supports such relief. respondent’s notes to the contrary emphasize lack of tangible materials and that the conveyances and occupancy details indicate a single project financed by a single owner, with liable parties to be determined later.

Contentions of Respondents

The respondents contend there is no basis for separate assessment under the statutory framework. They argue that the building was constructed and flats conveyed by the owner, Ramachandra Menon, with six flats, and the petitioner’s role does not establish entitlement to separate assessment. The file includes occupancy declarations, and the Assessing Authority found no reliable materials for separate assessment; the construction agreement’s registration status is not determinative. The respondents assert the assessment under Sections 5 and 5A is valid for the entire building and that the petition’s challenge is unfounded. They highlight that Exts. P1–P6 indicate a single unit being developed and conveyances executed post-construction after funding by the owner; thus, allowing separate assessment would contravene the statute’s scheme and legal precedents, including Bavasons Constructions (P) Ltd. v. State of Kerala.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Bavasons Constructions (P) Ltd. v. State of Kerala	2007(3) KLT 101	Distinguished	The judgment refers to Bavasons to support the argument that separate assessment is not permissible in the present facts; the High Court distinguishes Bavasons on its facts and the statutory framework, holding that separate assessment is not warranted here.

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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 P.R.RAMACHANDRA MENON** ## **MONDAY, THE 28TH DAY OF MAY 2012/7TH JYAISHTA 1934** ## **WP(C).No. 1184 of 2007 (N)** **-----------------------------------------** **PETITIONER:** ## **------------------** **LATHA R. NAIR, W/O. L.GOPAKUMAR, KIZHAKKEMADOM, THURUTHY TEMPLE ROAD, MARADU P.O. ERNAKULAM.** **BY ADV. SRI.P.K.RAVISANKAR** **RESPONDENTS:** **-----------------------** **1. STATE OF KERALA, REPRESENTED BY SECRETARY, TAXES DEPOT., THIRUVANANTHAPURAM.** ## **2. TAHSILDAR,** **KANAYANNUR TALUK, ERNAKULAM.** **BY ADV. GOVERNMENT PLEADER SRI.NOBLE MATHEW** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 28-05-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **MG** ## **WP(C).No. 1184 of 2007 (N) ----------------------------------------** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXT.P1:COPY OF THE SALE DEED PURCHASING 1/6TH SHARE IN THE LAND DATED 21.03.2005. EXT.P2:COPY OF THE AGREEMENT FOR CONSTRUCTION OF FLAT. EXT.P3:COPY OF THE RETURN UNDER KERALA BUILDING TAX ACT FILED BY THE PETITIONER.** **EXT.P4:COPY OF THE LETTER WRITTEN BY THE PETITIONER DATED 05.12.2006 BEFORE THE 2ND RESPONDENT.** **EXT.P5:COPY OF THE ORDER OF ASSESSMENT SSUED BY THE 2ND RESPONDENT DATED 06.12.2006.** **EXT.P6:COPY OF THE ORDER OF 2ND RESPONDENT DATED 12.12.2006. EXT.P7:COPY OF THE CIRCULAR ISSUED BY THE GOVERNMENT OF KERALA. EXT.P8:COPY OF THE ELECTRICITY BILL FOR AN AMOUNT OF RS.488/- DATED 13.10.2006.** **EXT.P9:COPY OF THE RECEIPT SHOWING PROPERTY TAX OF THE PETITIONER'S FLAT DATED 12.04.2006. EXT.P10:COPY OF THE LETTER DATED 05.12.2006 SUBMITTED BY THE PETITIONER BEFORE THE TAHSILDAR, ERNAKULAM.** **EXT.P11:COPY OF THE LOAN AGREEMENT.** ## **RESPONDENT'S EXHIBITS: NIL** ## **//TRUE COPY//** ## **PA TO JUDGE** ## **MG** ## **P.R.RAMACHANDRA MENON, J.** - - - - - - - - - - - - - - - - - - - - - ## **W.P.(c) No.1184 OF 2007** - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 28[th] day of May, 2012 ## **JUDGMENT** Whether the petitioner is entitled to have the benefit of Explanation 2 of Section 2(e) of the Kerala Building Tax Act to have separate assessment, instead of assessing the building as a single unit is the issue involved. 2. The case of the petitioner is that, the petitioner and five other persons wanted to purchase undivided interest in a total of 8 cents of land originally belonged to one Mr.Ramachandra Menon, who was the owner of the land and 1/6[th] of the undivided interest in the said land was conveyed to the petitioner for valuable sale consideration as per Ext.P1 dated 21/03/2005 with right to effect construction in the property. Ext.P2 is a copy of the construction agreement dated 31/12/2005 executed between the petitioner and the builder by name M.T.Varghese, who happens to be the Executive Director of T.R.Residency ( the name of the establishment having been referred to WPC.No.1184/2007 2 in other records including in Ext.P1 as well). 3. The case of the petitioner is that, making use of the funds procured by the petitioner from appropriate sources, the construction was completed and Ext.P3 return was filed seeking for assessment of the flat owned by the petitioner. Inspite of producing the relevant materials seeking for separate assessment, the same was not accepted by the assessing authority, who passed Ext.P5 order dated 6/12/2006 holding that no reliable materials were produced to call for separate assessment. Accordingly, the building was assessed with a total area of 777.38 M.sq.,. fixing the liability under Section 5 of the Act as Rs.86,100/ in the name of all the six persons, taken together. This was followed by Ext.P6 order with regard to the liability to be satisfied toward the 'luxuary tax' under Section 5A as well. The petitioner is challenging the said proceeding stating that, the assessment has been finalized as above, treating the building as a single unit, which is contrary to the scheme of the statute and the law declared by this Court as per the decision reported in _**Bavasons Constructions (P) Ltd. v. State of Kerala**_ (2007(3) KLT 101). The petitioner also contends that WPC.No.1184/2007 3 the main reason noted in Ext.P5 is that the construction agreement is not a 'registered' one. The necessity to have the construction agreement to be registered is also under serious challenge, with reference to the relevant provisions of law. 4. The respondents have filed a counter affidavit explaining the facts and circumstances. Inspite of granting opportunity to have the benefit of separate assessment, as provided under the statute, no tangible material was produced to have had such a course and it is asserted that the proceedings pursued by the assessing officer are within the four walls of law. 5. The petitioner has filed a reply affidavit, producing Exts.P10 and P11, substantiating the source from where the petitioner arranged the funds, virtually, by way of loan provided by a commercial bank. Learned counsel for the petitioner submits that, Ext.P11 loan was sanctioned on 21/03/2006 and payment has been effected by the petitioner accordingly, satisfying the remaining portion from such other sources. Even though these documents were produced, they were simply ignored by the assessing authority, which, hence is sought to be WPC.No.1184/2007 4 interfered in this writ petition. 6. Learned Senior Government Pleader appearing for the respondents submits that, there is absolutely no merit or bonafides in the writ petition, in so far as, there was no case for anybody else, than the petitioner herein, to the effect that, the building required to be assessed separately. It is further stated that the owner of the land himself had filed a submission dated 17/04/2006 before the Revenue Officer of the Corporation of Cochin stating that, he himself had completed the construction of the building having six flats and that 3 flats had already been conveyed to the concerned purchasers, one of whose names given is that of the petitioner. This being the position, the learned Government Pleader submits that the construction cannot be deemed as having effected by the petitioner making use of the funds from the sources as alleged and that the conveyance was actually effected after constructing the building and hence, the petitioner is not entitled to have the benefit of Explanation 2 to Section 2 (e) of the KBT Act. 7. During the course of hearing, the relevant file pertaining to WPC.No.1184/2007 5 the assessment was placed for consideration of this Court by the learned Government Pleader. On going through the contents of the file, this Court finds that there is considerable force in the submission made by the learned Government Pleader as to the actual facts and figures. The submission, stated as, made by the owner of the property on 17/04/2006 before the Revenue Officer of the Corporation, the 'occupancy certificate', the request made before the Assessing Authority to have one half of the liability to be mulcted upon the owner i.e. Mr.Ramachandra Menon stating that he owned only three flats and that the rest had to be satisfied by the others, to whom the flats had been transferred etc. form part of the file. This being the position, this Court does not find the case projected by the petitioner as acceptable to have separate assessment. 8. That apart, even going by the contents of Ext.P1, transfer of undivided interest in the landed property to the petitioner , it is stated in the 'third paragraph' that the vendor by name T.Ramachandra Menon had entrusted the petitioner ( Letha R.Nair) to construct, as building - contractor, a multi storied building known as T.R.Residency in the said WPC.No.1184/2007 6 property, consisting of 'five' 3 bed room apartments and 'one' 2 bed room apartment with common area such as septic tank, staircases etc. The pleadings and proceedings filed by the petitioner virtually run contrary to the contents of Ext.P1. That apart, the petitioner has not chosen to implead the other five persons or atleast the original owner of the landed property by name T.Ramachandra Menon in the party array. In the above circumstances, this Court does not find it as a fit case to call for separate assessment at the hands of different persons. Interference is declined and the writ petition is dismissed. However, it is made clear that the petitioner will be at liberty to proceed against the others concerned with regard to the actual liability of the petitioner and to have proportionate share from the parties concerned, in accordance with law. ## **P.R.RAMACHANDRA MENON JUDGE** sv. WPC.No.1184/2007 7