Shobha Sureshkum ar Palliyil Lane v. The Tahsildar, Thrissur; The Village Officer, Vellappaya, Thrissur

## **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. 30275 of 2010 (H)** **----------------------------** **PETITIONER(S): -------------** **SHOBHA SURESHKUMAR PALLIYIL LANE, VELLAPAYA, THRISSUR DISTRICT.** **BY ADVS.SRI.N.SASI SRI.N.SASI ( BY ORDER)** ## **RESPONDENT(S):** **--------------** ## **1. THE THAHSILDAR, THRISSUR-680001** **2. THE VILLAGE OFFICER, VELLAPPAYA, THRISSUR 689705** **BY SENIOR GOVERNMENT PLEADER SRI.V.K.SHAMSUDHEEN** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 14/10/2016, ALONG WITH WPC. 34590/2010, THE COURT ON 04-01-2017 DELIVERED THE FOLLOWING:** ## **bp** **WP(C).No. 30275 of 2010 (H)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS :** **P1: COPY OF THE PLAN DRAWN BY THE ARCHITECT.** **P2(a)TO(e): COPIES OF THE DEMAND NOTICES ISSUED BY THE KSE BOARD TO THE 9 DIFFERENT BUILDINGS.** **P3(a)&(b): COPIES OF THE DEMAND NOTICE ISSUED BY THE KSE BOARD TO THE 9 DIFFERENT BUILDINGS. P4: COPY OF THE NOTICE DT 9/2/2009 ISSUED BY THE R1. P5: COY OF THE ASSESSMENT ORDER FROM THE 1ST PETITIONER DT 27/2/2009. P6: COPY OF THE RECEIPT DT 12/3/2009. P7: COPY OF THE REPRESENTATION DT 1/12/2009. P8: COPY OF THE NOTICE OF DEMAND DT 25/1/2010.** ## **RESPONDENT'S ANNEXURES :** **----------------------** **ANNEXURE R1(a): ORDER OF ASSESSMENT UNDER THE KERALA BUILDING TAX ACT 1975.** **//TRUE COPY//** **P.S. TO JUDGE** **bp** ## **A.M. SHAFFIQUE, J.** =============== W.P. (C) Nos. 30275 & 34590 of 2010 ========================= Dated this, the 4[th] day of January, 2017 ## **J U D G M E N T** These writ petitions are filed by the same petitioner with reference to similar issues and hence heard and decided together. In WP(C) No. 30275/2010, petitioner challenges Ext.P8 and P9 and seeks for a declaration that the building in question is not liable to be levied for the purpose of luxury tax under Section 5A of the Kerala Building Tax Act, 1975. Ext.P8 is the notice of demand for luxury tax and Ext.P9 is a demand made by the Village Officer. 2. The facts involved in the writ petition would disclose that the petitioner was the owner of 80 cents of property. She transferred 40 cents to a firm consisting of 4 persons including her husband. 3. Nine different villa type houses were constructed in the year 2006 in the said property. Out of the nine buildings, 6 buildings were having an area of 84.71 sq.metres each and two were having around 710 sq.ft and another building having a plinth area of 137.72 sq.metres. Construction was completed in the year 2007. Separate numbers were taken for each building. Petitioner was served with a W.P(C) Nos.30275 & 34590/10 -:2:- notice for assessment of building tax for one of the nine buildings on 9/2/2009 as Ext.P4. The order of assessment is Ext.P5. Petitioner remitted the tax, which is evident from Ext.P6. Petitioner received another notice dated 9/11/2009 by which a proposal was made to pay luxury tax under Section 5A. It is contended that in the notice, the assessing authority had clubbed the area of all the buildings together for the purpose of luxury tax, which according to the petitioner is not justified. The total area shown in Ext.P8 is 1046.02 sq.metres. It is contended that each building has to be separately assessed. According to the petitioner, residential buildings less than 100 sq.metres is not liable for payment of tax and all the separate buildings are having less than 100 sq.metres. 4. Statement is filed on behalf of the 1[st] respondent wherein it is stated that the nine buildings were clubbed together and assessed as one unit. After the filing of the writ petition, a verification was made. It is stated that building No.1 includes ground floor, first part and second part. First part is being used as a canteen and ground floor two part as its kitchen. It is also stated that building Nos. II to IX are given on rent to students of ## W.P(C) Nos.30275 & 34590/10 -:3:- professional colleges. 5. In WP(C) No. 34590/2010, petitioner challenges Exts.P7 and P9 by which a demand has been made for building tax under Section 5 of the Act by treating all the buildings together. It is contended that in so far as the buildings are separate and distinct, it cannot be clubbed together. 6. The position of law is well settled in this regard. Even if a person is the owner of separate buildings, the buildings are to be assessed separately. “Building” is defined under Section 2(e) as under:- _“2(e) “building” means a house, out-house, garage, or any other structure, or part thereof, whether of masonry, bricks, wood, metal or other material, but does not include any portable shelter or any shed constructed principally of mud, bamboos, leaves, grass or thatch or a latrine which is not attached to the main structure.”_ ## “Plinth area” is defined under Section 2(k) as under:- _“2(k) “plinth area means the area included in the floor of a building and where a building has more than one floor the aggregate area included in all the floors together.”_ ## “Residential building” is defined under Section 2(l) as under:- ## W.P(C) Nos.30275 & 34590/10 ## -:4:- _(l) “residential building” means a building or any other structure or part thereof built exclusively for residential purpose including out-houses or garages appurtenant to the building for the more beneficial enjoyment of the main building but does not include hotels, boarding places, lodges and the like.”_ The meaning of residential building indicates that if a building is built exclusively for residential purpose, it has to be treated as a residential building, in which event, it includes out-houses or garages appurtenant to the building for the more beneficial enjoyment of the main building. Therefore, a reading of the definition of plinth area clearly indicates that if a building consists of more than one floor, the aggregate has to be taken. The only exemption is in respect of buildings referred to in Explanation 2 to Section 2(e). Therefore, if one is constructing two separate buildings in a property, two separate assessments have to be made. This is clear from the judgment of the learned Single Judge in _**Lalitha v. State of Kerala**_ (1994 (2) KLT 66), wherein this Court held at paras 6 to 9 as under:- _“6. Now, to the merits of the cases. S.5 is the charging section, and it levies tax in respect of every building the construction of which is completed on or_ W.P(C) Nos.30275 & 34590/10 ## -:5:- _after the 1st day of April, 1973 and the capital value of which exceeds Rs.75,000/-. The charge is thus on the building, though necessarily it has got to be collected from a person, namely the owner of the building (S.5(6)). Accordingly, S.7 of the Act requires the owner of the building as defined in S.2(i), to file return in the prescribed form for the purpose of assessment containing the prescribed particulars. Once the return is filed, the procedure for assessment laid down in S.9 has to be followed and the assessment completed. Thereafter the demand for tax is made on the assessee, and a charge is created on the building under S. 19(2), for the amount of building tax due, and interest._ _7. Building is defined in S.2(e) as follows:_ _“(e) “building” means a house , out-house, garage, or any other structure, or part thereof, whether of masonry, bricks, wood, metal or other material but does not include any portable shelter or any shed constructed principally of mud, bamboos, leaves, grass or thatch or a latrine which is not attached to the main structure.”_ _There are two Explanations to this definition, the first of which relates to housing accommodation for workers residing in plantations provided pursuant to the Plantation Labour Act and buildings constructed under the Government of India subsidised housing scheme for industrial workers, in which each part of the building is treated as a separate building. The other Explanation relates to apartments and flats owned by different persons in abuilding, the cost of_ ## W.P(C) Nos.30275 & 34590/10 ## -:6:- _construction of which is borne by them jointly, in which case each of the apartments or flats is deemed a separate building._ _8. What is noteworthy in the above mentioned provisions is that the charge is on the building as such, and not with reference to its owner. The taxable event is the completion of construction of the building. There is no provision in the Act for clubbing together various buildings constructed by the same owner either in the same financial year or otherwise. A building as defined in S.2(e) is an assessable entity by itself, liable to be assessed in respect of its capital value, as defined in S.2(f) (now plinth area). A person may construct separate buildings in the same property or in different properties, but there is no provision for clubbing together these buildings which are otherwise separate. What is brought to assessment as a building is what is defined in S.2(3) which, to put it shortly, means a building and its appurtenances like out-hosue, garage and such other structures which are attachments to it and form parts thereof though they may be physically or structurally separated from it. A building with all its necessary appurtenances is a single unit; but totally different units which otherwise have no connection with each other, either structurally or functionally are separate buildings. Two separate units may constitute one building, if they are built for the purpose of one or the other, and are functionally integrated.For example, a house with a garage, out-house for servants, latrines, cow-shed and so on forms an integral unit and has to_ ## W.P(C) Nos.30275 & 34590/10 ## -:7:- _be assessed as such. A hotel complex which may consist of numerous buildings like, cottages, kitchen complex, shopping arcade and so on or a factory complex with its appendages may constitute one unit for purposes of assessment. But when there is no such inherent connection between the buildings, when they do not exist for each other and are otherwise separate, there is no provision anywhere in the Act which requires such separate entities to be clubbed together into one or which deems them to be one building. Naturally so, because the tax payable under the Act is a one time payment, for which the taxable event is the completion of the construction of the building. Therefore, and even apart from anything else, it is impossible to club together different buildings into one for the purpose of assessment under this Act merely because they belong to the same owner._ _9. The buildings with which we are concerned in this case are structurally separate buildings separated from each other by a road. The buildings concerned in O.P. No.7744 of 1992 belong to different firms, though they have same common partners. Each can exist without the other. It cannot be stated that they have been constructed with a view to provide necessary facilities for the occupants of the other building or to be complementary to each other. They can exist independently of the other. There is no reason why such different buildings should be treated as one taxable entity when the Act does not specifically provide for it. I am therefore of the view_ W.P(C) Nos.30275 & 34590/10 **==> picture [21 x 9] intentionally omitted <==** _that the authorities have erred in clubbing together the separate buildings put up by the respective petitioners in the two cases, and in bringing them to one common assessment.”_ In the light of the above finding, I am of the view that this writ petitions are only to be allowed. Accordingly, Exts.P7 and P9 in WP(C) No. 34590/10 and Exts.P8 and P9 in WP(C) No. 30275/2010 are hereby quashed. Sd/- ## **A.M. SHAFFIQUE, JUDGE** Rp //True Copy// P.S to Judge