P. J. George v. State of Kerala and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** **WEDNESDAY, THE 4TH DAY OF JANUARY 2017/14TH POUSHA, 1938** **WP(C).No. 26771 of 2013 (V)** **----------------------------** **PETITIONER:** **-----------** **P.J.GEORGE, S/O.P.K.JOSEPH,AGED 62 YEARS, RESIDING AT PUTHAN PARAMBIL, SEA VIEW WARD, BAZAR PO, ALAPPUZHA - 688012.** **BY ADV. SRI.ABDUL JALEEL.A** **RESPONDENT(S):** **--------------** **1. STATE OF KERALA, REPRESENTED BY THE PRINCIPAL SECRETARY, DEPARTMENT OF REVENUE, THIRUVANANTHAPURAM-695 001.** **2. THE DISTRICT COLLECTOR, COLLECTORATE, CIVIL STATION, ALAPPUZHA-688 001.** **3. THE REVENUE DIVISIONAL OFFICER, OFFICE OF THE SUB DIVISIONAL MAGISTRATE, ALAPPUZHA 688 011.** **4. THE TAHASILDAR, TALUK OFFICE, AMBALAPPUZHA - 688 561.** **5. THE VILLAGE OFFICER, PADINJARE VILLAGE OFFICE, ALAPPUZHA-688 011.** **BY GOVERNMENT PLEADER SRI V.K.SHAMSUDHEEN** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04-01-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **K.V.** ## **WP(C).No. 26771 of 2013 (V)** ## **----------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** **-----------------------** **EXT.P1 - A TRUE COPY OF THE PROCEEDINGS PASSED BY 4TH RESPONDENT BEARING NUMBER BT-325/05/J2 DATED 03-10-2013.** - **EXT.P2 - A TRUE COPY OF THE SAID APPELLATE ORDER DATED NO.C-999/2013 DATED 31-05-2013 PASSED BY 3RD RESPONDENT.** - **EXT.P3 - A TRUE COPY OF THE ORDER OF 2ND RESPONDENT BEARING NUMBER B2-26344/13 DATED 21-08-2013.** - **EXT.P4 - A TRUE COPY OF THE SPECIAL NOTICE NO.T13/169/91 AND T 3/XIX/11/2001 ISSUED BY MUNICIPALITY** - **EXT.P5 - A TRUE COPY OF THE ORDER NO.D 4/325/05 DATED 16-01-206 PASSED BY 4TH RESPONDENT.** - **EXT.P6 - A TRUE COPY OF THE DEMAND NOTICE DATED 28-09-2012 ISSUED BY 5TH RESPONDENT** - **EXT.P7 - A TRUE COPY OF THE SAID NOTICE OF RECOVERY PROCEEDINGS NO.BD-325/05/J2 DATED 30-01-2013** - **EXT.P8 - A TRUE COPY OF THE JUDGMENT IN WPC.NO.7101/2013 DATED 21-03-2013.** - **EXT.P9 - A TRUE COPY OF THE ORDER PASSED BY THE COMMISSION IN HRMP NO.1283/2013 DATED 08-05-2013.** - **EXT.P10 - A TRUE COPY OF THE NEWS REPORTED IN NEWSPAPERS.** - **EXT.P11 COPY OF THE PROCEEDINGS OF MUNICIPAL SECRETARY DATED 30.3.2000.** - **EXT.P12 COPY OF THE REVISED PLAN.** - **EXT.P13 COPY OF THE APPROVED PLAN OF OLD BUILDING.** - **EXT.P14 COPY OF THE DOCUMENT DATED 12/12/2005 SHOWING THE NEW BUILDING NO 19/759 A ALLOTTED TO PETITIONER.** ## **RESPONDENT(S)' EXHIBITS NIL -----------------------** ## **/TRUE COPY/** ## **P.A.TO JUDGE** ## **K.V.** ## **A.M. SHAFFIQUE, J.** =============== W.P. (C) No. 26771 of 2013 ================== Dated this, the 4[th] day of January, 2017 ## **J U D G M E N T** This writ petition is filed challenging Exts.P1 to P3 by which orders had been passed by the assessing authority, the appellate authority and the revisional authority under the Building Tax Act, 1975 by which the building of the petitioner has been assessed to building tax as well as luxury tax. 2. The short facts involved in the writ petition would disclose that the petitioner was served with Ext.P1 order dated 3/10/2013 by which he was informed that the building having an extent of 421.14 sq.metres was assessed to tax whereby he was called upon to pay an amount of `25,800/-. The original order of assessment was passed on 16/1/2006. An appeal was filed in which a contention was raised that the building is in the name of two persons. However, in the absence of any evidence, the appeal was dismissed. Petitioner preferred a revision before the District Collector. Though the same contentions were urged, the revision came to be dismissed as per order dated 21/8/2013. This order came to be passed since it was W.P(C) No.26771/13 ## -:2:- observed that the petitioner had made additional constructions in the property in 2001 and therefore he becomes liable to pay luxury tax under Section 5A of the Building Tax Act. Accordingly, petitioner was called upon to pay luxury tax from 2003-04 onwards. 3. Exts.P2 and P3 were the orders passed in appeal and revision filed against the original order of assessment. Petitioner submits that the building was completed in the year 1991 and he started occupying the same in 1990. Some major improvements and repairs were carried out during the year 2001. Both the buildings were given separate municipality numbers. Petitioner is served with Ext.P5 dated 16/1/2006 by which he was called upon to pay `25,800/- as building tax. It is stated that he had filed an appeal on 24/2/2006 before the 3[rd] respondent, but, so far, no action had been taken in the matter on the ground that the files were misplaced. It is thereafter that a demand had been made for recovering the amount by revenue recovery proceedings. Ext.P6 is the revenue recovery notice claiming an amount of `17,200/with interest and other expenses. Another notice was served on the petitioner on 30/1/2013, produced as Ext.P7, by which the W.P(C) No.26771/13 -:3:- same amount was demanded with interest and other expenses. Petitioner filed WP(C) No. 7101/2013 before this Court and by judgment dated 21/3/2013, this Court had permitted the petitioner to treat Ext.P5 in the said writ petition as an appeal and orders were directed to be passed. It is pursuant to the same that Ext.P2 appellate order was passed. It is stated that the petitioner filed a complaint before the Human Rights Commission, which was disposed of directing the District Collector to take appropriate action in the matter. It is in this background challenging the levy of luxury tax and building tax that this writ petition is filed. 4. Counter affidavit has been filed by 4[th] respondent _inter alia_ stating that petitioner is the owner of a residential building having a plinth area of 450.20 sq.metre as reported by the Village Officer on 3/10/2005. The Tahsildar inspected and remeasured the building and noticed that it has an area of 421.14 sq.metres. Petitioner was heard and he was asked to produce necessary certificates from the local authority. On verifying the certificate from the Municipality, it was noticed that an extension was done to the existing building. Accordingly, assessment order was issued on 16/1/2006 directing him to remit an amount of W.P(C) No.26771/13 -:4:- `25,800/- as building tax. He remitted the first instalment and preferred an appeal. But there was no appeal pending before the Revenue Divisional Officer. Therefore, steps were taken for recovering the amount and thereafter the petitioner filed WP(C) No. 7101/2013. On the basis of the directions issued by the Court, the RDO remeasured the building and found that it has a plinth area of 428.40 sq.metres after exempting the car porch. Petitioner preferred a revision before the District Collector who upheld the order of the RDO. 5. It is further submitted that on the basis of judgment of the High Court dated 30/11/2011 in WA Nos.910 and 1759/2009 and also Government circular dated 15/2/2013, direction was issued that where there is an enhancement in the plinth area after 01/4/1999 in respect of buildings constructed prior to the said date, the said area has to be included for assessing luxury tax. It is in the said circumstances luxury tax was imposed from 2003. It is submitted that though two separate numbers had been given, the building belongs to the petitioner himself. No document was produced to prove that the ownership vests with two persons. It is also submitted that the building was renovated in the year W.P(C) No.26771/13 -:5:- 2001 and therefore the assessment of building tax as well as luxury tax is well justified and is in conformity with the Full Bench judgment in _**State of Kerala v. Abdulla**_ (2012 (1) KLT 178). 6. The short question to be considered is whether the petitioner is liable to pay building tax and luxury tax in terms with the provisions of the Building Tax Act. 7. Perusal of the records clearly indicate that Exts.P2 and P3 have been issued when a challenge was made to the imposition of building tax. The said orders had become final. Petitioner does not have a case that no tax can be levied to the building. The original order was passed as early as on 16/1/2006, which was reopened as per judgment in WP(C) No. 7101/13. The revisional authority in Ext.P2 had indicated that the petitioner had raised a contention that the building is owned by the petitioner and his son and it has two numbers. But, no materials had been produced to prove the said fact. Even if two numbers are given, ownership remains with the petitioner, in which event, the petitioner is liable to pay building tax for the entire area. This finding cannot be disputed. This finding by the RDO is confirmed by the District Collector as per Ext.P3 order. They also suggested W.P(C) No.26771/13 -:6:- that since additional construction had been made in the year 2001, there is an obligation to pay luxury tax as well. 8. It is in the light of the observation made in Exts.P2 and P3 that Ext.P1 order of assessment had been made. 9. There is no dispute about the fact that the petitioner had made major improvements in the year 2001. Therefore, for the purpose of levy of tax, necessarily, the said area is also to be computed in terms of Section 5. 10. A Full Bench of this Court in _**Abdulla**_ (supra), held at para 6 as under:- _“6. Going by the above scheme of levy of tax on constructed buildings and periodical revision of building tax as and when additions or modifications of the existing building are made, we feel the same scheme applies to luxury tax as well. The liability for luxury tax is on residential buildings with plinth area of 278.7 sq.ms. or more, the construction of which are completed after 1.4.1999. So much so, if any modification is made to an existing residential building after 1.4.1999 leading to increase in plinth area reaching 278.7 sq.ms. or more, the building will attract luxury tax under S.5A of the Act. S.5A does not authorise independent assessment of additional plinth area constructed to a residential building after 1.4.1999 for the purpose of luxury_ -:7:- ## W.P(C) No.26771/13 _tax alone. So much so, in our view, the judgment of the Division Bench above referred declaring the liability for luxury tax for extensions made to residential buildings after 1.4.1999 only if such additions exceed the limit of plinth area provided under S.5A is against the statutory scheme of levy of luxury tax. In fact, the statute does not visualise separate treatment of existing or already completed constructions and additions made to such buildings. A residential building remains the same and should be treated only as one building, no matter modifications or additions are made periodically leading to extension of plinth area. Since the assessment is only on building constructed, reconstructed or modified with extension, luxury tax has to be considered with reference to the total plinth area of the building with the additions. So much so, there is no scope for considering liability for luxury tax with reference to the additional plinth area constructed after 1.4.1999 as held by the Division Bench. We, therefore, hold that S.5A applies to residential buildings, the plinth area of which after extensions or additions made after 1.4.1999 reach or exceed 278.7 sq.ms. In other words, for the purpose of levy of luxury tax plinth area of the building as a whole has to be considered with the additions or extensions made after 1.4.1 999. We, therefore, hold that the view expressed by the Division Bench in the above judgment is not correct and accordingly, we overrule the above referred_ W.P(C) No.26771/13 ## -:8:- ## _Division Bench judgment._ In so far as the legal position is very clear and since the petitioner had made major changes in the building after 01/04/1999, the said area is to be computed for the purpose of levy of luxury tax. 11. In the said circumstances, nothing survives to be considered in the present writ petition. Petitioner has the obligation to pay building tax as well as luxury tax as assessed by the competent authorities. Writ petition is, therefore, dismissed. Sd/- ## **A.M. SHAFFIQUE, JUDGE** Rp //True Copy// P.S to Judge