P. V. Basheer Ahamed v. The Tahsildar, Revenue Recovery, Tellicherry & Tahsildar (Assessing Authority), Building Tax, Tellicherry

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN TUESDAY, THE 7TH OCTOBER 2008 / 15TH ASWINA 1930 OP.No. 570 of 2002(P) --------------------PETITIONER(S): --------------P.V.BASHEER AHAMMED,MANAGING PARTNER, LIBERTY PARADISE,A.V.K.NAIR ROAD,TELLICHERRY BY ADV. SRI.K.V.SOHAN RESPONDENT(S): --------------- 1. THE TAHSILDAR,REVENUE RECOVERY, TELLICHERRY. 2. THE TAHSILDAR,(ASSESSING AUTHORITY), BUILDING TAX,TELLICHERRY. GOVERNMENT PLEADER THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 7.10.2008 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: O.P.NO.570/02. ## APPENDIX ## PETITIONER'S EXHIBITS: - P1. COPY OF THE ORDER OF ASSESSMENT DTD.2.2.00. P2. COPY OF THE DEMAND NOTICE. P3. COPY OF THE ORDER BY R1 DTD.18.12.01. - P4. COPY OF THE CALCULATION. - P5. COPY OF THE REPRESENTATION DTD.29.12.01. ## Sdk+ ///True copy/// P.A. to Judge ## S.SIRI JAGAN, J. ================== ## O.P.No. 570 of 2002 ================== Dated this the 7[th] day of October, 2008 J U D G M E N T The issue involved in this original petition is as to what is the rate of interest payable by a defaulter in payment of building tax under the Kerala Building Tax Act, 1975. The petitioner has been assessed to building tax by Ext.P1 order. Ext.P2 demand notice was also issued under the Kerala Revenue Recovery Act, whereby the petitioner was directed to pay interest at 12 per cent per annum from 2.2.2000. The petitioner is challenging that part of Ext.P2 wherein the petitioner has been directed to pay interest at 12 per cent. According to the petitioner, the rate of interest payable on arrears of building tax is fixed by the Kerala Building tax Act itself under Section 19 wherein the rate fixed is 6 per cent per annum from the date of default. The petitioner has already paid the entire amount demanded to avoid further coercive action. The petitioner now submits that the petitioner is entitled to refund of the excess interest collected from the petitioner. The petitioner also disputes the demand for collection charges at the rate of five percent. According to the petitioner, except issuing 2 Ext.P2 demand notice the Revenue authorities have not taken any further steps for recovery of the amount and the petitioner himself directly paid the amount demanded. Therefore, going by the decision of this Court in _**Bhaskaran v. Sub Registrar**_ reported in 2005 (3) KLT 150, the petitioner is not liable to pay collection charges also. 2. A counter affidavit has been filed by the 1[st] respondent justifying the collection of interest on the basis of Section 6 of the Kerala Revenue Recovery Act. They also justify the collection of 5 per cent collection charges, since the petitioner paid the amount only after revenue recovery notice was issued to the petitioner. 3. I have considered the rival contentions in detail. 4. The first question to be decided is as to whether the petitioner is liable to pay interest in excess of the rate fixed in Section 19(1) of the Kerala Building tax Act. Section 19(1) reads thus: “ **19. Mode and time of recovery** .- (1) When building tax or luxury tax is not paid on the due date, the arrears of tax shall bear interest at the rate of six per cent per annum from the date of default.” 5. The contention of the 1[st] respondent is that they are o.p.570/02 3 entitled to collect interest from the petitioner at the rate of 12 per cent per annum in view of Section 6 of the Kerala Revenue Recovery Act. Section 6 of the Kerala Revenue Recovery Act reads thus: “ **6. Interest on arrears of public revenue due on Land.** - Arrears of public revenue due on land shall bear interest at the rate of 12 per cent per annum or at such other rate as may be notified by the Government from time to time in the Gazette.” Arrears of building tax is not an arrear of public revenue due on land. Simply because arrears of building tax also can be recovered by resort to proceedings under the Revenue Recovery Act, as if the same was also a public revenue due on land, the amount does not become public revenue due on land, on which alone interest is payable at the rate of 12 per cent per annum. When the Kerala Building Tax Act fixes rate of interest payable on defaulted building tax as 6 per cent, the Revenue authorities while recovering building tax under that Act, cannot recover interest in excess of the rate prescribed in the Act. Therefore, the recovery of interest in excess of 6% is clearly without jurisdiction. 6. As far as the recovery of collection charges is concerned, the petitioner's reliance on _**Bhaskaran's case**_ (supra) is well founded in so far as in the counter affidavit the 1[st] 4 o.p.570/02 respondent has no case that except issuing a notice under the Revenue Recovery Act, they have taken any further steps for collection of the defaulted amount from the petitioner. Admittedly on receipt of the recovery notice, the petitioner had paid the amounts due directly. That being so, recovery of five per cent collection charges is also unsustainable going by the _**Bhaskaran's case**_ (supra). Therefore, I am satisfied that the petitioner is entitled to refund of the interest collected from him in excess of the six per cent as also the five per cent collection charges recovered from him. The said amount shall be refunded to the petitioner, as expeditiously as possible, at any rate, within two months from the date of receipt of a certified copy of this judgment, if the same has been collected from the petitioner. The original petition is allowed as above. sdk+ Sd/S.SIRI JAGAN, JUDGE ///True copy/// P.A. to Judge 5 o.p.570/02 S.SIRI JAGAN, J. ================ O.P.No. 570 of 2002-P ================ J U D G M E N T 7[th] October, 2008 o.p.570/02 6