High Court of KeralaSingle Judge2010-01-05Writ petition dismissed; right to challenge fut...

P. C. Samuel v. District Collector, Pathanamthitta; Tahsildar, Ranny

Case / Petition Number:WP(C).No. 26730 of 2006(F)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P. R. Ramachandra Menon
Judgment Date: 2010-01-05
Court Decision / Holding: Relief sought for refund of Luxury Tax paid is not entertained; the writ petition is disposed of. The court holds that Luxury Tax is a continuing liability and that the petitioner must challenge any future demands, with all necessary materials, before the assessing authority. However, the petitioner’s right to fight future liabilities is preserved.
Final Disposition: Writ petition dismissed; right to challenge future Luxury Tax demands preserved; no refund of amounts paid

Parties to the Case

Appellants / Petitioners

P. C. Samuel

Respondents

District Collector, Pathanamthitta
Tahsildar, Ranny

Legal Representation & Advocates

Counsels for Petitioners

• Sri Jacob P. Alex

Counsels for Respondents

• Government Pleader Mathew Vadakkel

Case Synopsis & Summary

The petitioner, P. C. Samuel, challenges the assessment of Luxury Tax under Section 5A of the Kerala Building Tax Act for a building constructed before 01.04.1999, arguing that liability under the Luxury Tax regime cannot attach to him since the building fell below the threshold area or predated the operative date. The records show Ext.P3 plan and Ext.P1/P2 receipts indicating pre-1999 construction, while the Village Officer’s report submitted to the Tahsildar recorded a plinth area of 282.7 sq.m., exceeding the 278.7 sq.m. threshold. After due process, the petitioner was heard and initially paid Building Tax of Rs. 9,000 following an assessment under Sections 9 and 10, acknowledging the measured plinth area. However, during an Audit, the Accountant General flagged that Luxury Tax had not been assessed, prompting a demand for Rs. 2,000 per annum from 1999-2000 onwards. The petitioner contested this later demand, filing WP(C) 26730 of 2006. The court notes that Luxury Tax is a continuing liability, unlike the one-time Building Tax, and addresses whether the petitioner may challenge subsequent years’ demands. It ultimately holds that refund of previously paid Luxury Tax is not warranted but preserves the petitioner’s right to contest future demands with appropriate evidence, citing Mohamad Sadik v. Tahsildar for a related principle.

Provisions of Law Cited

Section 5A of the Kerala Building Tax ActSections 9 and 10 of the Kerala Building Tax Act

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that the building was completed before 01.04.1999 and that the plinth area, as evidenced by Ext.P3, does not justify Luxury Tax under Section 5A. He relies on Exts.P1 and P2 to show pre-1999 construction and asserts that the liability under the Luxury Tax cannot be imposed retroactively. He accepted the initial Building Tax assessment and paid Rs. 9,000 after hearing, but the subsequent Luxury Tax demand (2000 onward) arose due to an audit finding that Luxury Tax had not been assessed, and he seeks either a refund or a correct, limited liability for future years, with supporting documents. The petitioner also invokes Mohamad Sadik v. Tahsildar to support the right to challenge future demands and to raise all defenses when those demands arise.

Contentions of Respondents

The respondents argue that the petitioner never disputed liability under the Luxury Tax, nor challenged the plinth area or the 01.04.1999 appointed day, and that the Building Tax assessment was completed after hearing. They point to the Village Officer’s report showing a plinth area of 282.7 sq.m., and note the petitioner remitted Building Tax under Sections 9 and 10. With the audit finding, a demand for Luxury Tax from 1999-2000 onward was issued. The respondents contend that the writ petition challenges only a post-audit demand and is not maintainable for refund; however, they acknowledge that the petitioner may contest future yearly demands with proper evidence.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Mohamad Sadik v. Tahsildar	2006 (3) KLT 271	Positive	Cited to support the proposition that the petitioner can challenge remittance of Luxury Tax for subsequent years; used as authority for continuing liability and rights to contest future demands.

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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 TUESDAY, THE 5TH JANUARY 2010 / 15TH POUSHA 1931 **WP(C).No. 26730 of 2006(F)** **--------------------------** PETITIONER: --------------- P.C.SAMUEL, PADINJARAMANNIL, POOVANMALA, RANNY, PATHANAMTHITTA. BY ADV. SRI.JACOB P.ALEX RESPONDENTS: --------------- 1. DISTRICT COLLECTOR, PATHANAMTHITTA. 2. TAHSILDAR, RANNY. BY GOVERNMENT PLEADER ADV. MR. MATHEW VADAKKEL. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 05/01/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **WP(C).No. 26730 of 2006(F)** ## **APPENDIX** ## PETITIONER'S EXHIBITS: EXT.P1 : TRUE COPY OF BUILDING TAX PAYMENT RECEIPT DATED 23.12.1998. EXT.P2 : CERTIFICATE ISSUED BY SECRETARY ANGADI PANCHAYAT DATED 27.122.2005 EXT.P3 : DRAWING PREPARED BY THE ENGINEER. EXT.P4 : LUXURY TAX PAYMENT RECEIPT DATED 09.01.2004. EXT.P5 : REPRPESENTATION TO 1ST RESPONDENT DATED 08.01.2006. /TRUE COPY/ P.S. TO JUDGE. ## **P.R. RAMACHANDRA MENON, J.** .............................................................................. ## **W.P.(C) No. 26730 OF 2006** ......................................................................... **Dated this the 5[th] January , 2010** ## **J U D G M E N T** The petitioner is aggrieved of the assessment of 'Luxury Tax' under Section 5A of the Kerala Building Tax Act, whereby, the petitioner has been assessed to pay a sum of Rs. 2000/every year in respect of the building in question, which, according to him, was constructed before 01.04.1999, the date from which the liability under Section 5A was brought into force. It is also the contention of the petitioner that the building in question does not have the requisite area of 278.7Sq.M, so as to attract the 'Luxury Tax', which is sought to be substantiated by producing Ext.P3 plan prepared by an engineer engaged by the petitioner. 2. The learned Government Pleader, with specific reference to the contents of the counter affidavit filed by the second respondent, submits that the petitioner did never have a case **2** ## _**W.P.(C) No. 26730 OF 2006**_ disputing his liability to pay 'Luxury Tax' under Section 5A at any point of time. It is also submitted that the petitioner had never chosen to challenge the 'plinth area' or fixation of liability under the Kerala Building Tax Act and that there was no whisper that the building was constructed prior to 01.04.1999. 3. The learned Counsel for the petitioner, placing reliance on Exts.P1 and P2 issued from the concerned Grama Panchayat, submits that the building was constructed much before the appointed day i.e., prior to 01.04.1999 and hence that no liability could be mulcted on the petitioner under Section 5A towards 'Luxury Tax' . But the factual position as narrated by the respondents in the counter affidavit shows that, after completion of construction of the residential building, the Village Officer had submitted a report bearing No. 529/99 dated 29.11.1999 along with the return duly signed by the owner of the building and a rough sketch before the Tahsildar, Ranni, showing the plinth area of the building as 282.7 Sq.M. 4. Pursuant to the further steps taken for assessment under the Kerala Building Tax Act, the petitioner was heard. **3** ## _**W.P.(C) No. 26730 OF 2006**_ Notice of hearing was issued on 16.10.2000 and the petitioner was heard on 27.10.2000, who, after hearing, accepted the measurement reported by the Village Officer and remitted the 'Building Tax' of Rs.9000/-. No objection whatsoever was raised by the petitioner, either as to the measurement or as to the date of completion of the building, pursuant to the assessment order and demand notice dated 27.10.2000 issued under Sections 9 and 10 of the Kerala Building Tax Act. The due amount was satisfied on the very same date. 5. Subsequently, the office of the Accountant General observed, during the course of the audit, that despite the building having constructed after the appointed day and was having the plinth area above the prescribed extent, no assessment of Luxury Tax was ever made, which hence was sought to be remedied, leading to the proceedings taken by the concerned respondent . It was accordingly, a demand notice was issued to the petitioner directing to remit the Luxury Tax of Rs.2000/- per annum from the financial year 1999-2000 onwards, which was sought to be challenged by the petitioner **4** ## _**W.P.(C) No. 26730 OF 2006**_ by filing appeal before the Revenue Divisional Officer on 26.06.2002. The appeal was dismissed as per the order dated 18.03.2003 as not maintainable. Pursuant to the demand raised, it is stated that the petitioner has remitted Luxury Tax for four years, i.e., Rs.8000/- as per Chalan No. 1061 dated 31.3.2003 for the period from 1999-2000 to 2002-03, Rs. 2000/- each for the period of 2003-04 and 2004-05 vide Chalan No. 412 dated 16.1.04 and 984 dated 28.02.2005 respectively in the Sub Treasury, Ranni. 6. The learned Government Pleader also brought it to the notice of this Court, with reference to paragraph No.6 of the counter affidavit, that the petitioner has only stated in the return filed by him that the construction of the building was completed in 1999, while he has consciously omitted to note the month and date of construction. It is also stated that, at the time of hearing, no argument was put forth by the petitioner as to the date of completion of the building or about the measurement reported by the Village Officer; nor did he submit any documents to prove the same. It was accordingly that the assessing **5** ## _**W.P.(C) No. 26730 OF 2006**_ authority completed the proceedings and 'Luxury Tax' was levied, which hence is stated as not assailable under any circumstances. 7. The specific averments raised by the second respondent in the counter affidavit have not been chosen to be rebutted by the petitioner by filing any reply affidavit. In the said circumstances, this Court does not require any second thought to doubt the voluntary action pursued by the petitioner in choosing to suffer the 'Luxury Tax' imposed upon him, pursuant to the assessment and demand made in respect of the building in question. However, unlike the Building Tax, imposition of the 'Luxury Tax' under Section 5A is not a 'one time affair' and it is liable to be satisfied every year. For the very same reason, the petitioner is entitled to challenge remittance of further amount in respect of any subsequent year, as and when the cause of action arises, more so, in view of the law declared by this Court in _**Mohamad Sadik vs. Tahsildar (**_ **2006 (3) KLT 271** ). **6** ## _**W.P.(C) No. 26730 OF 2006**_ 8. In the above facts and circumstances, the relief prayed for by the petitioner for issuing necessary direction to refund the amount already paid by him towards 'Luxury Tax' under Section 5A of the Kerala Building Tax Act is not liable to be entertained and interference is declined. However, this will be without prejudice to the right of the petitioner to file appropriate proceedings before the assessing authority with regard to the liability to pay the Luxury Tax as and when demands are made in respect of the subsequent years, raising all necessary contentions and by producing all necessary supporting documents to substantiate the said pleading. With the above observations, the matter is disposed of. **P.R. RAMACHANDRA MENON, JUDGE.** lk