M/S SOUTHERN INVESTMENTS PVT. LTD. v. STATE OF KERALA and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON** **FRIDAY, THE 8TH DAY OF JUNE 2012/18TH JYAISHTA 1934** ## **WP(C).No. 9366 of 2008 (M)** **--------------------------** ## **PETITIONER(S):** **--------------------------** **M/S.SOUTHERN INVESTMENTS PVT.LTD., HHYS BUILDING, IST FLOOR, RAJAJI ROAD, KOCHI - 682 018.REPRESENTED BY ITS DIRECTOR OPERATIONS, JACOB CHANDY.** **BY ADV. SRI.BECHU KURIAN THOMAS** ## **RESPONDENT(S):** **-----------------------------** **1. STATE OF KERALA,** **REPRESENTED BY THE SECRETARY,** **DEPARTMENT OF REVENUE, SECRETARIAT, THIRUVANANTHAPURAM.** **2. THE DISTRICT COLLECTOR,ERNAKULAM.** **3. THE TAHSILDAR, KANAYANNOOR TALUK, KOCHI-11.** **R1 TO R3 BY SR GOVERNMENT PLEADER SRI.NOBLE MATHEW** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08-06-2012, ALONG WITH WPC.NO. 12450 OF 2008 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **sts** ## **WP(C)NO.9366/2008** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** - **P1 COPY OF THE PERMIT FOR CONSTRUCTION NUMBERED AS MOP3.214/94 DATED 9/10/1995 ISSUED BY THE CORPORATION OF COCHIN.** - **P2 COPY OF THE AGREEMENT FOR SALE OF UNDIVIDED INTEREST IN LAND DATED 4/11/96 EXECUTED BY THE PETITIONER WITH ONE MRS.MOLLY GEORGE AND GEORGE JOHN.** - **P3 COPY OF THE AGREEMENT DATED 4/11/96 ENTERED INTO BETWEEN THE PETITIONER AND MRS.MOLLY GEORGE AND GEORGE JOHN** - **P4 COPY OF OCCUPANCY CERTIFICATE DATED 17/1/2001 ISSUED BY THE TOWN PLANNING OFFICER.** - **P5 COPY OF THE PROPERTY TAX RECEIPT DATED 29/3/2006 ISSUED TO MRS.MOLLY GEORGE AND SRI.GEORGE JOHN IN RESPECT OF APARTMENT NO.10B** - **P6 COPY OF THE LIST OF APRATMENT OWNERS WITH THE DATE OF AGREEMENT, DATE OF FIRST AND LAST INSTALLMENTS PAID ALONG WITH THE TOTAL VALUE.** - **P7 COPY OF THE LETTER DATED 29/12/2006 STYLED AS AN ASSESSMENT NOTICE AND ISSUED BY THE 3RD RESPONDENT.** - **P8 COPY OF THE ASSESSMENT ORDER DATED 5/2/2007 ISSUED BY THE 3RD RESPONDENT.** - **P9 COPY OF THE JUDGMENT IN W.A.704/2007 DATED 19/3/2007.** - **P10 COPY OF THE WRITTEN OBJECTION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT.** - **P11 COPY OF THE ORDER DATED 22/2/2008 NO.B-3-13270/06 ISSUED BY THE 3RD RESPONDENT.** - **P12 COPY OF THE ASSESSMENT ORDER DATED 21/2/2008 AND NOTICE OF DEMAND ISSUED TO THE PETITIONER FOR FLAT NO.1 B OF CORAL CREST.** - **P12(A) COPY OF THE ASSESSMENT ISSUED TO THE PETITIONER FOR FLAT NO.1 C OF CORAL CREST.** - **P12(B) COPY OF THE ASSESSMENT ISSUED TO THE PETITIONER FOR FLAT NO.3 A OF CORAL CREST.** - **P12(C) COPY OF THE ASSESSMENT ISSUED TO THE PETITIONER FOR FLAT NO.3 B OF CORAL CREST.** **sts** **RESPONDENT'S EXHIBITS: NIL** **/TRUE COPY/** **P.A.TO.JUDGE** ## **P.R.RAMACHANDRA MENON, J.** ## **--------------------------------------------------** **W.P.(C) N0s.9366, 12450, 12451, 12452, 12453, 12777 and 12869 of 2008. --------------------------------------------------Dated this the 8th day of June, 2012** ## **JUDGMENT** The common issue involved in all these cases is whether the petitioner company is liable to be mulcted with the entire liability to satisfy the tax under the relevant provisions of the Kerala Building Tax Act, treating the building complex consisting of several apartments belonging to different persons as a 'single unit' or is it not liable to be assessed separately granting the benefit of 'explanation 2' to Section 2(e) of the Act . 2. But for the assessment order in W.P.(C) No.9366/2008, the orders impugned in all other cases are of February to March 2007; while the impugned order in W.P.(C)No.9366/2008 is of 22.2.2008 as borne by Ext.P11. The reason for declining the relief sought for, to have separate assessment, is almost similar in all the cases; mostly that the petitioner has not produced all the relevant documents necessary to sustain the plea claiming W.P.(C) N0s.9366 & connected cases. 2 the benefit of explanation 2 to Section 2(e) of the Act or that the construction the agreement executed in between has not been registered. 3. Coming to W.P.(C) No. 9366 of 2008, it is stated that the petitioner had earlier approached this Court by filing a W.P.(C) No. 8359 of 2007 seeking for similar relief, wherein the requisite extent of benefit was not obtained, which in turn was subjected to challenge by filing Writ Appeal No.704 of 2007. After analysing the merits involved, the writ appeal was disposed of as per Ext.P9 judgment dated 19.3.2007, setting aside the impugned assessment orders and the assessing authority was directed to effect reassessment, with liberty to the parties to produce all the requisite documents, raising all the relevant grounds. It was pursuant to said verdict, that Ext.P8 order in W.P.(C).No.9366/2008 came to be passed. Similar orders are passed in the other cases as well; (mostly produced as Ext.P5) though not pursuant to the verdict passed by the Division Bench, but W.P.(C) N0s.9366 & connected cases. 3 almost in similar circumstances. 4. The learned counsel for the petitioner submits that the observation made by the assessing authority in Ext.P11 order in W.P.(C) No.9366/2008 is not correct or proper and even going by the observations therein, particularly in paragraph 2, the different apartment owners turned up before the authority and submitted as many as 8 different documents as mentioned therein. However, the documents were simply given a 'go bye' and the assessing authority made some astrological assumptions, whereby some of the flats were exempted to have separate assessment and the remaining 45 flats were held as constructed by the petitioner; for want of sufficient material to arrive at a finding that the construction was effected jointly by the concerned flat owners utilising funds of their own, pumped into the common pool. 5. Absolutely nothing has been mentioned as to the particulars of the documents produced by the said 45 flat W.P.(C) N0s.9366 & connected cases. 4 owners; in what way the said documents differed from the documents produced by the other flat owners. As such, it can never be treated as a 'speaking order' directed to be passed by the Division Bench, vide Ext.P9; submits the learned counsel. With regard to the impugned orders in the other cases, they also have been passed almost in similar circumstances, referring to the alleged lapse on the part of the owners/petitioners to produce all the requisite documents to arrive at an inference in favour of the different apartment owners to have separate assessment, so as to extend the benefit of 'explanation 2' to Section 2(e) of the KBT Act. The learned counsel for the petitioner also refers to the forwarding letter presented before the concerned authority producing the relevant documents and also refers to the admission made by the assessing authority in some of the cases that the petitioner had sought for adjournment to produce additional documents/remaining documents. It is also stated that, the notice with regard to W.P.(C) N0s.9366 & connected cases. 5 the hearing scheduled was served to the petitioners just 2 or 3 days before and it was made rather impossible for the petitioner to have procured all the relevant materials on the date of hearing in turn, seeking for adjournment. But for making an observation therein in this regard, this Court finds that the party was never let known as to which date, the case was adjourned, so as to come with the documents. 6. Coming to the relevant provisions of law and the liability of the persons concerned, it remains a fact that the petitioner in all the above cases is one and the same. But the construction effected is in respect of different projects. Each building complex is a multi-storied one; with each floor having different apartments owned, possessed and enjoyed by different persons. The question is whether the parties have produced all the necessary documents before the concerned authority and if there is any lapse or defect, whether opportunity has been given to have it rectified. W.P.(C) N0s.9366 & connected cases. 6 7. Going by the relevant provisions of law, apart from the necessity to have the building constructed separately, it has also to be established that the requisite funds have been made available by the different flat owners of their own. Whether any such document to arrive at such an inference and to grant the benefit of the explanation 2 to Section 2(e) as aforesaid, is also a matter to be considered by the assessing authority, to have separate assessment. Similarly, in many cases it is pointed out that the construction agreement has not been registered, which is stated as an incriminating circumstance. This Court finds it difficult to accept the said proposition. Construction agreement, to have the building constructed by the builder on the requisition of the concerned owner, is not a document which is liable to be compulsorily registered as contemplated under Section 17 of the Registration Act. Since there is no provision of law which compels a construction agreement to be registered and since no W.P.(C) N0s.9366 & connected cases. 7 judicial precedent, if any, in this regard is brought to the notice of this Court, the observation of the assessing authority that the construction agreements have not been registered cannot bar the way of the petitioners/different owners from availing the benefit of Explanation 2 to Section 2(e) of the Building Tax Act, if they are otherwise eligible. 8. Considering the totality of the circumstances, this Court finds that this is a matter, which requires to be considered by the assessing authority afresh, granting one more opportunity to the petitioners concerned to establish their case. This is more so, since the requirements of the statutory prescription and the procedure to be followed have been explained by this Court subsequently, as per the decision in _**Bavasons Construction (P) Ltd. v. State of Kerala (2007 (3) KLT 101).**_ It has also to be borne in mind, that except in the first case, in all other cases, the impugned orders were passed either in February 2007 or on W.P.(C) N0s.9366 & connected cases. 8 16.3.2007 that is before pronouncing the above verdict on 23.3.2007. 9. In the above circumstances, all the impugned assessment orders are set aside and the assessing authority is directed to reconsider the matter after giving an effective opportunity of hearing to the petitioners to produce all the relevant documents to show the separate ownership by way of separate sale agreements, sale deeds, construction agreements, separate property tax assessments, separate electricity connections, procurement of funds from different sources and such other particulars. The petitioners shall co-operate with the assessment as above and it will be for the petitioners herein to furnish the particulars of the separate owners and also the materials with regard to the procurement of funds by the persons concerned so as to enable the assessing authority to complete the assessment and the same shall not be left to be the look out of the different persons who got the W.P.(C) N0s.9366 & connected cases. 9 construction effected through the petitioner. 10. All these writ petitions are disposed of, making it clear that the petitioners or the authorised representative shall appear before the assessing authority 'on 2.7.2012' or on such other date to which the case is adjourned, producing all the requisite documents. The matter shall be finalized in accordance with law, of course with reference to the law declared by this Court in **Bavasons cases** (cited Supra) as expeditiously as possible, at any rate, within 3 months from the date of receipt of a copy of this judgment. ## **P.R.RAMACHANDRA MENON, Judge.** mns/-