MRF Ltd. v. Corporation of Kochi

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE N.NAGARESH** **WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941** ## **WP(C).No.26867 OF 2010(G)** ## **PETITIONER:** **MRF LTD. 124, GREANS ROAD, CHENNAI-600 006, REPRESENTED BY ITS POWER OF ATTORNEY HOLDER, SAJAN MATHEW, AGED 42, S/O. LATE MATHEW KURIAN, OFFICE MANAGER, ERNAKULAM.** **BY ADVS.** **SRI.PRAMOD KOCHUTHOMMEN.E. SRI.P.VISWANATHAN (SR.) SRI.AJITH VISWANATHAN** ## **RESPONDENTS:** **1 CORPORATION OF KOCHI REPRESENTED BY THE SECRETARY, OFFICE OF THE CORPORATION OF KOCHI,, ERNAKULAM, KOCHI-682 011.** - **2 CHAIRMAN** **STANDING COMMITTEE (TAX APPEAL), CORPORATION OF KOCHI, P.B.NO.1016, ERNAKULAM, KOCHI-682 011.** **BY SRI.RAJESH S.SUBRAHMANIAN,SC,COCHIN CO** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 18.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C) No.26867 OF 2010(G)** **2** ## **J U D G M E N T** ~ ~ ~ ~ ~ ~ ~ ~ ~ _**Dated this the 18[th] day of March, 2020**_ The petitioner, a company incorporated under the Companies Act, 1956 with its registered office at Chennai, is aggrieved by the exorbitant property tax assessed for its building situated in Elamkulam Village, disregarding the observations and directions of the Tribunal for Local Self Government Institutions. 2. The petitioner constructed an integrated building for accommodating its sales office and godown, in the year 2000. The 1[st] respondent-Corporation of Kochi assessed the building as two units and assigned two door numbers. Halfyearly property tax was assessed at ₹1,08,018/- and ₹1,448/- respectively. The building is a single unit and the assessment was exorbitant, contended the petitioner. Remitting ₹1,14,939/- as demand amount, the petitioner **WP(C) No.26867 OF 2010(G)** **3** filed an appeal. The appellate authority ordered the appeal on 02.07.2001 cancelling the splitting up of building for tax purpose, but confirming the tax amount. Aggrieved, the petitioner filed appeal before the 2[nd] respondent-Standing Committee (Tax Appeals). In the said appeal, the petitioner produced documents in proof of lesser rate of tax levied on the adjacent building. The said appeal was disposed of by the Standing Committee as per Ext.P3 order dated 18.08.2001 reducing the tax to ₹1,04,606/- plus library cess of ₹5,230/-. 3. Aggrieved by the nominal reduction in property tax allowed, the petitioner filed CMA No.803/2001 before the District Court, Ernakulam. The petitioner was forced to pay ₹1,04,606/- for the period 2001-'02 (first half), while preferring this appeal. The District Court allowed the appeal as per Ext.P5 judgment dated 31.03.2004 setting aside the impugned order and remanded the case to the Standing Committee (Taxation), with a direction to dispose of the matter in the light of the observations made in the judgment. **WP(C) No.26867 OF 2010(G)** ## **4** 4. The petitioner submits that in spite of the observations and findings contained in Ext.P5 judgment of the District Court, Ernakulam, the 2[nd] respondent, without conducting any enquiry, took an erroneous decision as per Ext.P6 order dated 13.07.2006, whereby the 2[nd] respondent revised the assessment giving only a nominal reduction and revised the property tax to ₹90,026/- and library cess to ₹4,501/-. Ext.P6 decision is wrong and is without taking into account Ext.P5 order in CMA No.803/2001, contended the learned Senior Counsel Sri.P.Viswanathan assisted by Advocate Pramod, the counsel for the petitioner. 5. The petitioner therefore filed R.P. No.64/2006 before the Tribunal for Local Self Government Institutions, aggrieved by Ext.P6 order. The petitioner was mad to pay the exorbitant property tax for the period 2006-2007 (second half) under the threat of non-renewal of godown licence. The Tribunal found the assessment erroneous, but setting aside the impugned orders, the Tribunal directed the 1[st] respondent to make fresh assessment taking into **WP(C) No.26867 OF 2010(G)** **5** consideration the rent prevailing in the area and the annual value fixed for the assessment of similar and similarly situated buildings, particularly the buildings bearing Nos.35/48, 35/48B, 35/48C, 35/48C1 and 35/48C2. 6. The Secretary thereupon issued Ext.P13 proceedings dated 17.08.2007 whereby a re-assessment was made without departing from the Annual Rental Value fixed by the Appeal Committee and assessing the property tax at ₹90,026/- and Library Cess at ₹4,501/-. Ext.P13 communication by which this was communicated to the petitioner does not in any manner indicate that the Secretary considered the tax in respect of similar buildings, in spite of the directions contained in Ext.P12 order of the Tribunal. The petitioner thereupon filed an appeal dated 06.09.2007. The Appeal Committee heard the petitioner. The Appeal Committee noted that the buildings pointed out by the petitioner and indicated by the Tribunal for comparison are either house building or buildings with lesser area and were assessed at different years. Therefore, rates applicable to **WP(C) No.26867 OF 2010(G)** **6** those buildings cannot be made applicable to the building of the petitioner. This was communicated to the petitioner as per Ext.P14 order dated 05.02.2010. 7. The petitioner thereupon again approached the Tribunal for Self Government Institutions, filing R.P. No.34/2010. The Tribunal, in Ext.P16 order, held that assessment of property tax as per Section 234 of the Kerala Municipality Act is to be done taking into consideration the assessment of other similarly situated buildings also. If there is no other exactly similar or similarly situated building, then the assessment of that building nearest in such similarity to the building to be assessed, will have to be adopted as the basis and the difference in the assessment will have to be explained with reference to the difference in the building. The Tribunal held that the Committee ought to have found that which building is nearest in similarity to the building of the petitioner and should have adopted the annual rental value of that building as the basis and assessment of petitioner's building should have been done **WP(C) No.26867 OF 2010(G)** **7** by considering the difference between petitioner's building and explaining the difference in such assessment. After holding so, the Tribunal set aside the impugned decision and notice and directed the Secretary of the Corporation to make fresh proper assessment, as indicated in the order. 8. The counsel for the petitioner submitted that having found the impugned order unsustainable, the Tribunal by itself ought to have made an assessment. The findings of the Tribunal in Ext.P6 that the Tribunal has no such independent authority, is wrong, contended the learned counsel for the petitioner. The counsel for the petitioner submits that no purpose will be served by remanding the matter again as the past conduct of the respondents would show that they are acting as if they are not bound by the findings of the District Court or the Tribunal. The petitioner therefore seeks to set aside Ext.P16 order of the Tribunal and to direct the Tribunal to fix the Annual Rental Value of the petitioner's building on the basis of the Annual Rental Value of similarly situated buildings. **WP(C) No.26867 OF 2010(G)** **8** 9. The thrust of argument of the learned Senior Counsel is that the respondents, disregarded Ext.P5 judgment of the District Court and Exts.P12 and P16 orders of the Tribunal and refused to assess the building, comparing it with the Annual Rental Value of similarly situated buildings in the area, and therefore the Tribunal ought not have remitted the matter back to the same authorities again for reconsideration, when the Tribunal had before it an Advocate Commission Report and all other materials which would have enabled the Tribunal to decide the issue finally. The Tribunal fell in error in holding that it has no such powers. The learned Senior Counsel relied on the judgment of this Court in _**Krishnan Nair K. and another v. Secretary, Corporation of Thiruvananthapuram** [2010 (2) KLT 128]_ . In the said judgment, this Court held that the Tribunal for Local Self Government Institutions will be well within its authority to make appropriate recommendations when a Local Self Government Institution defaults or acts in excess of its powers in implementing lawful orders and **WP(C) No.26867 OF 2010(G)** **9** directions. 10. Adverting to Sections 276 and 271S of the Kerala Panchayat Raj Act, 1994, a Division Bench of this Court also held in the judgment in _**Jomi C. Nidheeri v. Elanji Grama Panchayat and others** [2007 (2) KLT 345]_ that the appellate Tribunal is vested with the power to hear appeals on merits and can decide the matter like any other appellate authority and that the Tribunal's order is not restricted on procedural matters only. 11. Sri. Rajesh S. Subramanian, learned Standing Counsel for the Corporation of Kochi, opposed the writ petition and contended that the assessment of the building of the petitioner, to property tax, has been carried out with due diligence, taking into account the Annual Rental Value of similarly situated buildings. The age of the building is also a relevant factor. The building of the petitioner was a new one at the time of assessment. Permissible reduction in the assessed tax was given to the petitioner by the statutory authorities. The Tribunal has only remanded the **WP(C) No.26867 OF 2010(G)** **10** matter for consideration afresh and there is no justifiable reason to interfere with the Tribunal's order and the writ petition is therefore liable to be dismissed. 12. I have heard learned counsel for the petitioner and learned Standing Counsel appearing for the respondents. 13. The argument made on behalf of the petitioner is that the respondents are consistently refusing to re-assess the property tax in the light of the observations and directions of the District Court in Ext.P5 judgment and Exts.P12 and P16 orders of the Tribunal and considering the property tax assessed to buildings of similar nature in the same area. The petitioner in CMA No.803/2001 filed in the District Court challenging the order dated 18.08.2001 passed by the 2[nd] respondent, had specifically contended that the assessment in respect of the building of the petitioner is excessive, comparing the same with other similar buildings in the same area. The District Court found that the contentions of the petitioner are not seen dealt with **WP(C) No.26867 OF 2010(G)** **11** in the order of the Standing Committee. The District Court found that the impugned order is non-speaking and hence, set aside the same with direction to pass fresh orders. The respondents thereafter passed Ext.P6 order nominally reducing the half-year tax from ₹10,466/- to ₹90,026/- and the library cess from ₹5,230/- to ₹4,501/-. Ext.P6 would show that the respondents have compared the half-yearly tax of a nearby building accommodating Hero Honda Showroom and refused a comparable property tax on the grounds that the said showroom building is situated still eastward and the said building was originally assessed long ago in 1989. Particulars of other nearby buildings are not reflected in Ext.P6. 14. In R.P. No.64/2006 preferred by the petitioner before the Tribunal, the petitioner has taken out a Commission. Ext.P10 Commission Report would show that there are other commercial buildings near the building of the petitioner. The property tax levied on those buildings was not seen specifically considered by the respondents in **WP(C) No.26867 OF 2010(G)** **12** Ext.P6. The petitioner has also produced Ext.P11 extract of property tax assessment list, before the Tribunal to enable the Tribunal to come to a fair assessment of annual value and tax. However, a perusal of Ext.P11 list would show that certain particulars like the year of construction of those buildings and their proximity to public roads etc. are not indicated therein. At the same time, it is evident that in spite of Exts.P5, P12 and P16, the respondents have not reassessed petitioner's building as per the directions contained therein. 15. While agreeing with the proposition of law projected by the counsel the petitioner relying on the judgments of this Court in _**Jomi C. Nidheeri v. Elanji Grama Panchayat and others** (supra)_ and _**Krishnan Nair K. and another v. Secretary, Corporation of Thiruvananthapuram** (supra)_ that the Tribunal for Local Self Government Institutions is competent to adjudicate issues before it on merit, I find no reason to interfere with Ext.P16 order of the Tribunal. This is due to the fact that all **WP(C) No.26867 OF 2010(G)** **13** the materials and facts which are relevant to make a fair assessment, were not before the Tribunal, in spite of Ext.P10 Commission Report and Ext.P11 assessment list produced by the petitioner though those documents would be of great help to the competent authorities in determining the property tax that can be levied on the building in question. 16. In the circumstances, while refusing to interfere with Ext.P16 order of the Tribunal, I am inclined to dispose of this writ petition directing the respondents to assess the Annual Rental Value and property tax in respect of the building of the petitioner as directed by the Tribunal, in Exts.P12 and P16 orders taking into account Ext.P10 Commission Report, Ext.P11 property tax assessment list and any other further materials which may be produced by the petitioner. The respondents shall indeed make a comparative assessment of property tax with reference to nearby buildings of similar nature made mention in Exts.P10 and P11 and if the respondents propose to make substantial **WP(C) No.26867 OF 2010(G)** **14** departure therefrom in respect of petitioner's building, reasons thereof should be reflected in the order to be passed by the respondents. The direction of the Tribunal in Ext.P16 order that the assessment shall be based on Annual Rental Value of a building nearest in such similarity to the building of the petitioner, with specific reasons given for departure therefrom, should be strictly adhered to. The petitioner shall be given an opportunity of hearing while passing such order. A final decision in this regard shall be taken within a period of three months from the date of receipt of a copy of this judgment. Writ petition is disposed of with the afore directions. Sd/- **N. NAGARESH, JUDGE** aks **WP(C) No.26867 OF 2010(G)** **15** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1 THE TRUE PHOTOSTAT COPY OF THE RECEIPT SHOWING THE REMITTANCE OF** ` **1,14,939.00 BEFORE THE 1ST RESPONDENT EXHIBIT P2 THE TRUE PHOTOCOPY OF THE ORDER PASED BY THE 1ST RESPONDENT DATED 02.07.2001.** **EXHIBIT P3 THE TRUE COPY OF THE ORDER PASSED BY THE 2ND RESPONDENT DATED 18.08.2001.** **EXHIBIT P4 THE TRUE PHOTOCOPY OF THE RECEIPT FOR A SUM OF** ` **1,04,733.00 SHOWING THE REMITTANCE OF THE TAX EXHIBIT P5 THE TRUE COPY OF THE JUDGMENT DATED 31.03.2004. EXHIBIT P6 THE TRUE PHOTOCOPY OF THE SAID ORDER PASSED BY THE 2ND RESPONDENT DATED 13.07.2006. EXHIBIT P7 THE TRUE PHOTOCOPY OF RECEIPT FOR A SUM OF RS.9,14,656.00 SHOWING THE REMITTANCE OF THE PROPERTY TAX FOR THE PERIOD 2000-01 (SECOND HALF) TO 2006-07 (FIRST HALF)** **EXHIBIT P8** - **THE TRUE PHOTOCOPY OF RECEIPT FOR A SUM OF** ` **94,527.00 SHOWING THE REMITTANCE OF THE PROPERTY TAX** **EXHIBIT P9** **EXHIBIT P9 THE TRUE PHOTOCOPY OF RECEIPT FOR A SUM OF** ` **94,527/- SHOWING THE REMITTANCE OF THE PROPERTY TAX EXHIBIT P10 TTHE TRUE PHOTOCOPY OF THE COMMISSION REPORT EXHIBIT P11 THE TRUE PHOTOCOPY OF THE ASSESSMENT REGISTERS PRODUCED BY THE PETITIONER BEFORE THE TRIBUNAL PERTAINING TO THE** **WP(C) No.26867 OF 2010(G)** **16** **BUILDING INSPECTED BY THE ADVOCATE COMMISSIONER.** ## **EXHIBIT P12** **EXHIBIT P13** **EXHIBIT P14** **EXHIBIT P15** **EXHIBIT P16** **THE TRUE PHOTOCOPY OF THE ORDER PASSED BY THE TRIBUNAL IN REVISION PETITION NO.64 OF 2006 DATED 25.01.2007.** **THE TRUE PHOTOCOPY OF THE ORDER PASSED BY THE 1ST RESPONDENT DATED 17.08.2007.** **THE TRUE PHOTOCOPY OF THE ORDER PASSED BY THE 2ND RESPONDENT DATED 05.02.2010.** **THE TRUE PHOTOCOPY OF THE RECEIPT SHOWING THE REMITTANCE OF AN AMOUNT OF RS.4,72,635.00 BEFORE THE 1ST RESPONDENT ON 27.03.2010 VIDE RECEIPT NO. 07410.** **THE TRUE PHOTOCOPY OF THE ORDER PASSED BY THE TRIBUNAL IN REVISION PETITION NO.34 OF 2010 DATED 21.05.2010.**