High Court of KeralaSingle Judge2012-01-18Writ petition allowed; no costs; directions for...

T.V. Meenakshi and others v. The District Collector, Thrissur and others

Case / Petition Number:W.P.(C).No.21938 of 2008-J

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: K. Vinod Chandran
Judgment Date: 2012-01-18
Court Decision / Holding: The writ petition is allowed. No costs. The original assessment under Form V (P3), the appellate order (P4) and the revisional order (P11) are set aside for non-compliance with mandatory provisions; the assessing authority is directed to proceed with fresh assessment after verifying separate unit returns, giving notice and hearing to the petitioners, retaining documents related to construction costs and allowing local inspection if necessary, and applying the principles for separate apartment assessment as in Bavasons Constructions (P) Ltd. v. State of Kerala, within one month from the date of hearing.
Final Disposition: Writ petition allowed; no costs; directions for fresh assessment following separate-unit principles with notice and hearing.

Parties to the Case

Appellants / Petitioners

T.V. Meenakshi
T.V. Thylambal
T.V. Seshadri
T.V. Ramachandran

Respondents

The District Collector, Thrissur
Tahsildar, Assessing Authority - Under the Building Tax Act, Taluk Office, Thrissur
The Revenue Divisional Officer, Thrissur

Legal Representation & Advocates

Counsels for Petitioners

• Adv. K.B. Gangesh
• Smitha Chathanaramath

Counsels for Respondents

• Senior Government Pleader S. Sudhish Kumar

Case Synopsis & Summary

Four siblings, T.V. Meenakshi, Thylambal, Seshadri and Ramachandran, inherited property by partition and planned a four-unit building as a single structure, agreeing that each unit’s construction costs would be borne separately. They filed separate building tax returns in Form II on 30 January 1995, but the assessing authority (the 2nd respondent) issued Exhibit P3, an assessment order in Form V treating the building as a single unit under the Kerala Building Tax Act, 1975. The petitioners appealed (Exhibit P4) but the appellate order upheld the assessment with a slight modification in rates and remanded the computation to the original authority. The revision before the 1st respondent was dismissed on the ground that it is bound by the remand-order, while the petitioners pressed for review, which the District Collector later decided (Exhibit P11) against them, prompting the present writ petition. The petitioners contended that Exhibit P3 lacked reasons and did not reflect separate-unit assessment; they relied on documents (Exhibit P12) showing separate accounts audited by a CA, and asserted that they had produced these before the original authority and appellate bodies. The court, citing Tharu v. Tahsildar and Bavasons Constructions (P) Ltd., held that the Act’s mandatory provisions for notice, hearing, and reasons had not been complied with, set aside the challenged orders, and directed fresh assessment in accordance with separate-unit principles, with hearing and documents duly considered. It ordered local inspection if necessary and to determine cost of construction per unit, following Bavasons; liabilities to be determined after hearing; implementation within one month.

Provisions of Law Cited

Kerala Building Tax Act, 1975Section 9(1) of the Kerala Building Tax Act, 1975Section 9(2) of the Kerala Building Tax Act, 1975

Legal Doctrines & Maxims

Mandatory notice and hearing under Section 9(2) of the Kerala Building Tax Act (as explained in Tharu v. Tahsildar)
Principles for assessment of tax in respect of separate apartments laid down in Bavasons Constructions (P) Ltd. v. State of Kerala

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners contend that after partition the property was to be used as four separate units; they filed separate Form II returns and kept separate cost accounts; Exhibit P3 assessing order treated the building as a single unit; the order lacks reasons and there was no notice before completion; Section 9(1) requires assessment based on return and Section 9(2) requires reasons and notice; they rely on Tharu v. Tahsildar for mandatory notice and hearing; Exhibit P12 shows separate accounts audited by a CA and produced before the original authority; after this Court’s Exhibit P10, the District Collector passed Exhibit P11; the petitioners seek reassessment for separate units; they argue for compliance with mandatory procedures and evidentiary requirements, and for applying Bavasons’ principles to separate-unit construction costs.

Contentions of Respondents

The respondents oppose, asserting there is no evidence of separate construction before the authorities; Exhibit P11 shows no separate unit; the original Form V is not invalid per se; the petitioners should pursue statutory remedies; even if remand is necessary, the revisional order cannot be set aside unless mandatory procedures are followed; the authority would consider separate unit returns if available; the evidence before the District Collector does not prove separate construction; a careful examination of costs per unit should be made only with proper notices and hearing.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Tharu v. Tahsildar	2003 (1) KLT 219	Positive	Cited for mandatory notice and opportunity to produce evidence under Section 9(2).
Bavasons Constructions (P) Ltd. v. State of Kerala	2007 (3) KLT 101	Positive	Cited for principles guiding assessment where there are separate apartments.
OP No. 9953/2003	OP 9953/2003	Mentioned Only	EXT.P10 judgment cited for reference rather than direct proposition.

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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 K.VINOD CHANDRAN WEDNESDAY, THE 18TH DAY OF JANUARY 2012/28TH POUSHA 1933 ## **W.P.(C).No. 21938 of 2008 (J)** ------------------------- PETITIONERS:- ---------------------- 1. T.V.MEENAKSHI, - “LIONGUARD”, XXVI/337, CONVENT ROAD, THRISSUR. 2. T.V.THYLAMBAL - “LIONGUARD”, XXVI/337 - CONVENT ROAD, THRISSUR 3. T.V.SESHADRI, - “LIONGUARD”, XXVI/337, CONVENT ROAD, THRISSUR. 4. T.V.RAMACHANDRAN, - “LIONGUARD”, XXVI/337, CONVENT ROAD, THRISSUR. BY ADV. SRI.K.B.GANGESH SMT.SMITHA CHATHANARAMBATH ## RESPONDENTS:- ------------------------- ## 1. THE DISTRICT COLLECTOR, THRISSUR 2. TAHSILDAR, ASSESSING AUTHORITY - UNDER THE BUILDING TAX ACT, TALUK OFFICE, THRISSUR. 3. THE REVENUE DIVISIONAL OFFICER, THRISSUR. R1 TO R3 BY SENIOR GOVERNMENT PLEADER SRI.S.SUDHISH KUMAR. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 18-01-2012, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:- W.P.(C).NO.21938 OF 2008 ## **APPENDIX** PETITIONERS' EXHIBITS:- ------------------------------------- EXT.P1 - TRUE COPY OF THE PARTITION DEED DATED 27.2.1988. EXT.P2 - TRUE COPY OF THE RELEASE DEED DATED 22.9.92. - EXT.P3 - TRUE COPY OF THE ORDER OF ASSESSMENT REFERENCE NO.G2-31/95 DATED, 9.10.2001 BY THE 2ND RESPONDENT. - EXT.P4 - TRUE COPY OF THE ORDER NO.C1-16023/01/K.DIS. DATED 29.8.2002 PASSED BY THE R.D.O., THRISSUR. - EXT.P5 - TRUE COPY OF THE REVISION PETITION SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT DATED 16.12.2002. - EXT.P6 - TRUE COPY OF THE ORDER DATED 13.1.2003 ISSUED BY THE 1ST RESPONDENT AS NO.EL-2/57215/2002/L.DIS. - EXT.P7- TRUE COPY OF THE REVISION PETITION SUBMITTED BY THE PETITIONERS BEFORE THE 1ST RESPONDENT DATED 21.1.2003. - EXT.P8 - TRUE COPY OF THE ORDER OF THE FIRST RESPONDENT AS NO.C9-4148/2003/L.DIS. DATED, 25.2.2003. - EXT.P9 - TRUE COPY OF THE REVISED ASSESSMENT ORDER NO.G2-31/95/BT DATED 29.11.2002 BY THE 2ND RESPONDENT. - EXT.P10 - TRUE COPY OF THE JUDGMENT OF THIS HON'BLE COURT IN O.P.NO.9953/2003 DATED 20.8.2007. - EXT.P11 - TRUE COPY OF THE ORDER OF THE FIRST RESPONDENT AS ORDER NO.G9-18861/2003 DATED 14.3.2008. - EXT.P12 - TRUE COPY OF THE TRIAL BALANCE OF THE PETITIONERS CERTIFIED BY THE CHARTERED ACCOUNTANT. RESPONDENTS' EXHIBITS:- --------------------------------------- NIL. - TRUE COPY - ## **K. Vinod Chandran, J.** **--------------------------------------** **W.P.(C).No.21938 of 2008-J** **--------------------------------------Dated this, the 18[th] day of January, 2012** ## **JUDGMENT** **The petitioners are siblings, on whom a property devolved on partition, evidenced by Exhibits P1 and P2. The petitioners decided to construct a building with four separate units as a single structure, but constructed, possessed and enjoyed separately. It is also averred that there was an understanding between them that the cost of construction of each unit was to be borne by the respective petitioners and that the construction was proceeded with as per the said understanding. On completion of the construction, building tax returns were filed by the petitioners separately in Form II on 30.1.1995. The assessing authority, being the 2[nd] respondent, passed Exhibit P3 assessment order in Form V, assessing the building as a single unit under the Kerala Building Tax Act, 1975 (hereinafter referred to as “the Act”). The petitioners filed appeal before the 3[rd] respondent, which was dismissed by Exhibit P4, but with a slight modification regarding the rates applied, the computation of which was remanded to the original authority.** WP(C).No.21938 of 2008-J - 2 - **The revision filed by the petitioners before the 1[st] respondent was dismissed on the ground that since the original authority has passed an order on remand, the petitioner has to necessarily avail the statutory remedy available under the Act. The petitioners, however, filed an application for review, contending that the original order, which confirmed the assessment of the petitioners' apartments as a single unit, was under challenge. The revisional authority having declined to consider the review, the petitioners were before this Court by way of Original Petition, which was disposed of by Exhibit P10 judgment. Pursuant to Exhibit P10, the District Collector considered the issue and passed Exhibit P11 order, against which the petitioners are before this Court in the present writ petition.** **2. The specific contention of the petitioners is that the order passed by the revisional authority was not in accordance with Exhibit P10 judgment, nor has the judgments, referred to in Exhibit P10, considered by the revisional authority. The petitioners' counsel would contend that Exhibit P12 series of** WP(C).No.21938 of 2008-J - 3 - **documents would show that the petitioners had maintained separate accounts, which were audited by a Chartered Accountant and the said documents were also produced before the original authority as also the appellate and revisional authorities. The learned Government Pleader would oppose the contention of the petitioners on the ground that it is clear from the order of the District Collector, Exhibit P11, that there was no evidence produced by the petitioners before the District Collector to establish the separate construction. However, the learned counsel for the petitioners would reiterate that in fact even before the original authority the said documents were produced.** **3. Be that as it may, Exhibit P3, in my opinion, suffers from a fundamental infirmity, in so much as the same is an assessment order passed under Form V without any reasons and merely computing the tax in accordance with the plinth area. Section 9(1) of the Act speaks of an assessment in the event of the assessing officer being satisfied about the return filed and Section 9(2) provides for an assessment in the event of** WP(C).No.21938 of 2008-J - 4 - **no return being filed or in the context of the assessing officer not being satisfied with the return filed. In such circumstances, this Court in** _**Tharu v. Tahsildar**_ **[2003 (1) KLT 219] has held that a notice regarding the non-satisfaction of the authority as also an opportunity to produce evidence in support of the return is mandatory. This Court also held that the assessment order passed under Section 9(2) has to contain reasons regarding the non-satisfaction of the assessing officer as also the reasons behind proceeding with the assessment as contemplated by the assessing officer. The averment in paragraph 4 of the writ petition makes it clear that the building tax returns were filed by each of the petitioners separately in Form II on 30.1.1995 and that it was pursuant to the same, the assessing authority passed Exhibit P3 assessment order. The order of assessment, Exhibit P3, however, does not speak of any reasons for the assessing officer to arrive at a finding that the assessment of the building has to be completed as a single unit, nor does it reveal a notice having been issued to the petitioners before completion of assessment. In such circumstances, I am inclined to set aside** WP(C).No.21938 of 2008-J - 5 - **Exhibit P11 revisional order, Exhibit P4 appellate order as also Exhibit P3 assessment order for the reason that the original authority has not complied with the mandatory provisions for completing the assessment under the Act. The assessing authority, it goes without saying, is free to proceed with the assessment after verifying the individual separate assessments filed by the petitioners and issuing notice for hearing on the petitioners, individually. The petitioners shall produce a certified copy of this judgment before the assessing authority within a period two weeks from the date of receipt of the same and in case the assessing authority finds that no returns are available in the files, the petitioners shall be directed to file returns within a period of two weeks thereafter. The assessing authority shall, if necessary, conduct a local inspection of the building and shall also receive the documents regarding the cost of construction made available by the petitioners with due acknowledgment. The assessing authority shall hear the petitioners with notice and shall pass appropriate orders within a period of one month from the date of hearing keeping in mind the principles for** WP(C).No.21938 of 2008-J - 6 - **assessment of tax in the case of separate apartments laid down in** _**Bavasons Constructions (P) Ltd. v. State of Kerala**_ **[2007 (3) KLT 101]. Any amounts paid by the petitioners by virtue of the interim orders of this Court shall be retained by the assessing authority and further demand or refund shall depend upon the orders to be passed by the assessing authority.** **The writ petition is allowed. No costs.** **Sd/K.Vinod Chandran, Judge.** ## **vku/-** ## **- true copy -**