High Court of KeralaSingle Judge2012-03-02Writ petition allowed; assessment and demand se...

Mohammed Althaf v. State of Kerala and Others

Case / Petition Number:W.P.(C).No.4192 of 2007 (Y)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: K. Vinod Chandran
Judgment Date: 2012-03-02
Court Decision / Holding: The writ petition is allowed. Exhibit P4 assessment and Exhibit P5 demand are set aside. However, the 2nd respondent is free to proceed under the Kerala Building Tax Act for assessment of the subject building’s tax and recovery as provided under the Act, either from the owners or by enforcing the first charge on the building.
Final Disposition: Writ petition allowed; assessment and demand set aside; authorities may proceed to assess the subject building for tax against the actual owners or by enforcing the first charge on the building under the Building Tax Act.

Parties to the Case

Appellants / Petitioners

Mohammed Althaf V.S.

Respondents

State of Kerala, represented by Secretary, Revenue Department
Tahsildar, Kanayannur Taluk
Village Officer, Edappally (North)
Malabar Builders, a Partnership Firm
Abdul Majeed
Abdul Rahiman
Mrs. Shameena
Iby Sara John
Shyma Vazeem
Adv. Divakaran
Dr. Rajesh
Shamsudheen
Rafeeq
Dr. Mohammed Ali
Shahid Yakub
K.P. Ulahannan
Fathima Majeed Kunju
Manoj Mathew
Mohan K. Varkey
Sivakami Rajan Babu
Nirmala Pillai
V.M. Kartha
Ibrahim
Anil P. Elias
Thankamani

Legal Representation & Advocates

Counsels for Petitioners

• Sri. P. Sanjay
• Smt. A. Parvathi Menon

Counsels for Respondents

• Sri. S. Sudhish Kumar (Special Government Pleader - Taxes)

Case Synopsis & Summary

The petitioner, Mohammed Althaf V.S., as power of attorney holder for landowners (respondents 5 and 6), challenged the Kerala Building Tax Act, 1975 assessment (Exhibit P4) and the corresponding demand (Exhibit P5) in respect of a building constructed on land in Edappally North. The core issue is whether the petitioner can be treated as an “owner” under Section 5(6) of the Act, given that ownership and sale deeds were in the names of the beneficiaries/purchasers, with the petitioner acting as an attorney to execute documents. The court notes that the building was handed over to purchasers via construction agreements and sale deeds (Exhibits P1–P3), and the petitioner’s status as POA-holder did not amount to owner-ship for tax purposes. The court accepts this argument and holds that the assessment and demand cannot stand against the petitioner as an owner. It recalls a prior interim order and emphasizes that recovery must be properly directed to the actual liable parties, either the owners or by invoking a first charge on the building, rather than against the petitioner who is not an owner. The judgment cites Bavasons Constructions (P) Ltd. v. State of Kerala, State of Kerala v. Alex George, and Govind Saran Ganga Saran v. CST to underscore that tax is a constitutional-imposed obligation requiring legitimate, realistic assessments, not mere revenue collection. The petition is allowed with directions for the proper authorities to proceed against the rightful owners or the building’s first charge.

Provisions of Law Cited

Kerala Building Tax Act, 1975Section 5(6)

Legal Doctrines & Maxims

Concept of tax with four components: imposition, person liable, rate, and valuation (Govind Saran Ganga Saran v. CST, AIR 1985 SC 1041; cited via State of Kerala v. Alex George, 2005 (1) SCC 299)
Tax is a charge on the property; assessments must be legal and realistic, not merely for revenue collection (State of Kerala v. Alex George; Govind Saran Ganga Saran v. CST)
Bavasons Constructions (P) Ltd. v. State of Kerala referenced for principles on unit vs. apartment assessment (Mentioned)

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that as a power of attorney holder for landowners, he cannot be deemed the ‘owner’ under Section 5(6) of the Kerala Building Tax Act, 1975. The sale deeds (Exhibit P3) and construction agreements (Exhibits P1–P2) show execution on behalf of owners, with undivided shares in land transferred to purchasers who then built and took possession. Therefore, the building tax assessment (Exhibit P4) and demand (Exhibit P5) imposed on him are illegal and must be set aside. The petitioner also cites prior interim orders and case law to argue that recovery must be targeted at owners, not at the POA holder.

Contentions of Respondents

The authorities argued that building tax is a charge on the property and that the assessment should reflect the liability of the parties who own or occupy the property. They contend that the drafting and classification of units (apartment vs. whole building) require consistent application of the Building Tax Act, and that recovery proceedings have to be pursued following due process. The State’s representation emphasizes that the petitioner, as POA-holder, was not a proper liable owner to bear the tax, yet the respondents seek to retain the assessment against the property, with relief constrained to the owners or by first charge.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Bavasons Constructions (P) Ltd. v. State of Kerala	2007 (3) KLT 101	Mentioned Only	Cited to reference principles on whether the building should be assessed as a single unit or as independent apartments; used as background, not expressly applied or distinguished.
State of Kerala v. Alex George	(2005) 1 SCC 299	Positive	Quoted to articulate constitutional principles of tax and the necessity of proper assessment, reinforcing the notion that tax is a charge on property and must be lawful.
Govind Saran Ganga Saran v. CST	AIR 1985 SC 1041	Positive	Cited for the four components of the concept of tax (imposition, liable person, rate, and valuation) as a foundational doctrine guiding proper taxation.

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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 K.VINOD CHANDRAN FRIDAY, THE 2ND DAY OF MARCH 2012/12TH PHALGUNA 1933 ## **W.P.(C).No.4192 of 2007 (Y)** -------------------------------------------------- PETITIONER:- -------------------- MOHAMMED ALTHAF V.S., VALIYAVEETTIL HOUSE, FORT VALLEY MUNDAMPALAM CROSS ROAD, KUSUMAGIRI P.O., KAKKANAD, ERNAKULAM. BY ADVS.SRI.P.SANJAY SMT.A.PARVATHI MENON RESPONDENTS:- ------------------------ 1. STATE OF KERALA, REPRESENTED BY SECRETARY, REVENUE DEPARTMENT, SECRETARIAT, TRIVANDRUM. 2. THE TAHSILDAR, - KANAYANNUR TALUK, ERNAKULAM. 3. VILLAGE OFFICER, - EDAPPALLY (NORTH), ERNAKULAM. 4. MALABAR BUILDERS, A PARTNERSHIP FIRM HAVING ITS OFFICE AT B.M.P.O., THRIKKAKARA, KOCHI-21. 5. ABDUL MAJEED, S/O. ABDUL KHADER, PUTHENKULAM HOUSE, KURIKUZHI P.O. KARIPPAMANGALAM VILLAGE, KODUNGALLUR, THRISSUR. 6. ABDUL RAHIMAN, S/O. KUNJU MOHAMMED, THINDIKKAL HOUSE, KURIKUZHI P.O. KAIPPAMANGALAM VILLAGE, KODUNGALLUR, THRISSUR. 7. MRS. SHAMEENA, FLAT NO.A & B,MALABAR GATE, N.H.BYE-PASS, EDAPPALLY, KOCHI. 8. IBY SARA JOHN, FLAT NO.A, MALABAR GATE, N.H.BYE-PASS, EDAPPALLY, KOCHI. W.P.(C).NO.4192 OF 2007 **- 2 -** ## 9. SHYMA VAZEEM, FLAT NO.C, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. ## 10. ADV. DIVAKARAN, FLAT NO.D, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. ## 11. DR. RAJESH, FLAT NO.1A, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. ## 12. SHAMSUDHEEN, FLAT NO.1B, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. ## 13. RAFEEQ, FLAT NO.1C, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. 14. DR. MOHAMMED ALI, FLAT NO.1D, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. ## 15. SHAHID YAKUB, FLAT NO.2A, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. ## 16. K.P.ULAHANNAN, FLAT NO.2B, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. ## 17. FATHIMA MAJEED KUNJU, FLAT NO.2 C, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. ## 18. MANOJ MATHEW, FLAT NO.2D, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. 19. MOHAN K. VARKEY, FLAT NO.3 A, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. 20. SIVAKAMI RAJAN BABU, FLAT NO.3B, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. ## 21. NIRMALA PILLAI, FLAT NO.3C, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. W.P.(C).NO.4192 OF 2007 **- 3 -** 22. V.M.KARTHA, FLAT NO.3D, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. 23. IBRAHIM, FLAT NO.4B, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. 24. ANIL P. ELIAS, FLAT NO.4C, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. 25. THANKAMANI, FLAT NO.4D, MALABAR GATE, N.H.BYE PASS, EDAPPALLY, KOCHI. R1 TO R3 BY SPECIAL GOVERNMENT PLEADER (TAXES) SRI.S.SUDHISH KUMAR. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02-03-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- W.P.(C).NO.4192 OF 2007 ## **APPENDIX** ## PETITIONER'S EXHIBITS:- |PETITIONER'S EXHIBITS:-|PETITIONER'S EXHIBITS:-| |---|---| |--------------------------------------|| |EXT.P1 -|TRUE COPY OF THE AGREEMENT DATED 20.5.1996.| |EXT.P2 -|TRUE COPY OF THE AGREEMENT DATED 30.10.1996.| |EXT.P3 -|TRUE COPY OF THE SALE DEED DATED 22.9.2000.| |EXT.P4 -|TRUE COPY OF THE ASSESSMENT ORDER NO.5-13260/06| ||DATED 11.1.2007.| |EXT.P5 -|TRUE COPY OF THE NOTICE NO.B5.13260/06 DATED 11.1.2007.| |EXT.P6 -|TRUE COPY OF THE CLARIFICATION ISSUED BY THE 1ST| ||RESPONDENT NO.75386/SC 1/06/RD Dated 29.12.06.| ## RESPONDENT'S EXHIBITS:- ----------------------------------------- NIL. - true copy - ## K. Vinod Chandran, J. -------------------------------------W.P.(C).No.4192 of 2007-Y --------------------------------------Dated this, the 2[nd] day of March, 2012 ## JUDGMENT The petitioner challenges the order of assessment, Exhibit P4, made under the Kerala Building Tax Act, 1975 and the notice of demand, Exhibit P5. The assessment has been made for a total plinth area of 2168.70 sq.m., being an apartment building in Survey No.1/5 of Edappally North village. The petitioner's contention is that the land which belonged to the respondents 5 and 6 was sought to be developed and the petitioner was the power of attorney holder for the owners for executing sale deeds in favour of the intending purchasers. On the strength of the power of attorney, the petitioner had executed sale deeds similar to Exhibit P3 in the name of the intending purchasers, conveying undivided share in the land. The purchasers then entered into construction agreements with the 4[th] respondent, similar to Exhibits P1 and P2. It was on the basis of the sale deed as also the construction agreement referred to above that the building was constructed and handed over to the respective purchasers. The petitioner being only a power of attorney holder of the owners and not having constructed the building, cannot be deemed to be an “owner” of the building under Section 5(6) of the Act, is the short point raised in the writ petition. - 2 - W.P.(C).No.4192 of 2007 2. I find much force in the contention of the petitioner. In the status of a power of attorney, the petitioner cannot be proceeded with for recovery of tax on the building constructed on the land which the said power of attorney conveyed to the purchasers even before the construction commenced. The assessment made under Exhibit P4 and the demand Exhibit P5, in the circumstances, have to be set aside. 3. However, I notice that a learned Single Judge of this Court had, on 31.5.2007, passed an interim order in the writ petition on the following lines: “Since building tax is charge on the property, it is for the recovery authority to attach the property after issuing notice to the apparent owners and sell it in R.R. proceedings. It is for the owners to settle difference, among them, if any. Stay of recovery against the petitioner will stand revived and extended by two weeks.” 4. The learned Government Pleader would submit before me that no proceedings have been taken till date. It is also not clear as to whether the building has to be assessed as a single unit or independent apartments based on the principles laid down in _**Bavasons Constructions (P) Ltd. v. State of Kerala**_ [2007 (3) KLT - 3 - W.P.(C).No.4192 of 2007 101]. Obviously the interim stay originally granted by this Court had not only stayed the recovery proceedings against the petitioner, but had also stalled the assessment against the building which is to be made under the Building Tax Act which was sought to be rectified by the above interim order. The haphazard attitude of the assessing authority in not properly examining the provisions of the Act and proceeding against the person not at all liable under the Act has affected the recovery of tax due to the Government. The Government's interest would be better protected if the authorities under the statute take care to proceed in accordance with the law and desist from making blatantly illegal assessments. The concept of tax has been succinctly stated in _**State of Kerala v. Alex George**_ [(2005) 1 SCC 299]: “In the case of Govind Saran Ganga Saran v. CST (AIR 1985 SC 1041) this Court has held that the first component in the concept of a tax is the character of imposition, the second is a clear indication of the person on whom the levy is imposed and who is obliged to pay the tax, the third is the rate at which the tax is imposed and the fourth is the value to which the rate is applied for computing the tax liability”. Any deviation would lead to the Courts coming down heavily on such W.P.(C).No.4192 of 2007 - 4 - action and at times even prevent collection from the person who actually has the liability; as has happened in this case. Assessments should be legal and realistic and should not proceed merely on the principle of collection of revenue. 5. The petitioner's challenge against the recovery proceedings having been found to be valid, I am of the opinion that this writ petition need not be kept pending here for service on all of the respondents who are said to be the purchasers. In such circumstances, Exhibit P4 assessment and Exhibit P5 demand are set aside. However, the 2[nd] respondent is free to proceed under the provisions of the Building Tax Act for assessment of the tax of the subject building and recovery as provided under the Kerala Building Tax Act; from the owners or by enforcing the first charge on the building. The writ petition is allowed with the above observation. ## Sd/- K.Vinod Chandran, Judge. vku/- - true copy -