Veegaland Developers Pvt. Ltd. v. District Collector, Revenue Divisional Officer, Tahsildar and Village Officer, Ernakulam

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS ``` ``` FRIDAY, THE 18[TH] DAY OF MARCH 2022 / 27TH PHALGUNA, 1943 WP(C) NO. 6508 OF 2022 ``` ## **`PETITIONER:`** ``` M/S.VEEGALAND DEVELOPERS PVT.LTD XIII/300 E-26, 4TH FLOOR, KCF TOWER, B M C ROAD, THRIKKAKARA, KAKKANAD, ERNAKULAM 682 021 REPRESENTED BY ITS EXECUTIVE DIRECTOR ``` ``` BY ADVS. S.SHANAVAS KHAN S.INDU ``` ## **`RESPONDENTS:`** |**`1`**|**`THE DISTRICT COLLECTOR`**| |---|---| ||**`CIVIL STATION, KAKKAND, EERNAKULAM 682 030`**| |**`2`**|**`THE REVENUE DIVISIONAL OFFICER`**| ||**`REVENUE DIVISIONAL OFFICE, FORT KOCHI, ERNAKULAM 682`**| ||**`001`**| |**`3`**|**`THE TAHSILDAR,`**| ||**`TALUK OFFICE, KANAYANNUR, ERNAKULAM 682 313`**| |**`4`**|**`THE VILLAGE OFFICER`**| ||**`NADAMA VILLAGE OFFICE, NADAMA , KANAYANNUR, ERNAKULAM`**| ||**`682 032`**| ## **`OTHER PRESENT:`** ## **`SR.GP-SMT.MM.JASMINE`** ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.03.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C) NO. 6508 OF 2022 ``` ``` 2 ``` ## BECHU KURIAN THOMAS, J. =========================== W.P.(C) No.6508 of 2022 ## ============================ Dated this the 18[th] day of March, 2022 ## JUDGMENT Petitioner claims to be a builder engaged in the construction of residential apartments and had recently completed construction of an apartment complex, by name “Veegaland Kings Fort”. Returns were filed on 25.08.2021 as evidenced by Ext.P2, under Section 7 of Kerala Building Tax Act, 1975 (for short, the Act), specifying that the area of the completed building is 17,934.9 sq.mts. 2. Petitioner, in its communications to the 3[rd] respondent submitted that there were a total of 108 apartments in the apartment complex, of which 61 apartments were constructed by different owners at their cost on the basis of construction agreements executed with the petitioner and that those apartments are to be assessed separately in the individual name of the apartment owners. On 21.12.2021, pursuant to a notice dated 13.12.2021, issued by the ``` WP(C) NO. 6508 OF 2022 ``` ``` 3 ``` third respondent, petitioner submitted further details regarding the apartment complex including details of the sale deeds registered, apart from the door numbers allotted to the different apartments followed by further communication and details on 21.12.2021 and 18.01.2022 and furnished the list of apartment owners in the building. A statement was also given on 18.01.2022, mentioning that 58 flats had been sold, of which 53 sale deeds have been registered and the remaining 5 sale deeds will be furnished within two weeks. However, without considering any of the details furnished, the assessing officer issued an order dated 15.02.2022, imposing a huge amount of Rs.28,07,495/- as one time building tax on the petitioner, after assessing the petitioner as the owner of the entire building. 3. The learned counsel for the petitioner submitted that the order of assessment is perverse, in as much as it is non-speaking, indicating non-application of mind and rendering the order of assessment liable to be quashed, under Article 226 of the Constitution of India. ``` WP(C) NO. 6508 OF 2022 ``` ``` 4 ``` 4. The learned Special Government Pleader, Shri.M.H.Hanil Kumar, on the other hand, upon instructions, submitted that the impugned order was issued on the basis of the occupancy certificate and the date of completion of the apartments. However, attempt of the petitioner to take into reckoning agreements for sale, executed prior to the completion date cannot be accepted, as such a concept is alien to the Act. He further submitted that, in any event, the petitioner has an alternative remedy of an appeal and that recourse to Article 226 ought to be refused in the circumstances. 5. I have considered the rival contentions. The incidence of tax under the Act falls on the date of completion and on the owner of the building. Section 2(e) of the Act defines ‘a building to include apartment or flats owned by different persons, provided the cost of construction was met by such persons jointly. If the above are satisfied, each apartment or flat shall be deemed to be a separate building for the purpose of the Act. 6. Whether a building is liable to be treated as a single building or as apartments with independent units, to be assessed in ``` WP(C) NO. 6508 OF 2022 ``` **==> picture [8 x 8] intentionally omitted <==** the name of the different owners is to be reckoned, based on a proper assimilation of the details. Execution of the sale deed alone is not determinative of ownership of the apartment under the Act. The statute contemplates cost of construction paid by different individuals as determinative of the nature and manner in which assessment is to be carried out. 7. This Court had in the decision in Hi-Lite Realtors (India) LLP, Calicut vs The Revenue Divisional Officer [2018 (3) KHC 613], held, relying upon the observations in Balu v. State of Kerala 1994 (2) KLT 42 that: “The sole question for decision is whether the assessment of the entire building consisting of twenty two flats as one unit is legal and valid. There is no dispute about the facts of the case. The building is an integral one consisting of twenty two flats. It is a multistoreyed one. The land belongs to the various flat owners in co-ownership, after the transfer effected to them of the undivided interest in the land, the transfer being effected after the construction of the flats was complete. What Explanation 2 lays down is that if a building consists of different apartments or flats owned by different persons, and the cost of construction of the building is met by such persons ``` WP(C) NO. 6508 OF 2022 ``` ``` 6 ``` jointly, each apartment or flat shall be deemed to be a separate building. The ingredients of the Explanation are (a) the existence of a building, (b) that building must consist of different apartments or flats, (c) the apartments or flats must be owned by different persons and (d) the cost of construction of the building should be met by such persons jointly. If these ingredients concur, each of the apartments or flats will be deemed to be a separate building, though the building is one structurally and there is an integral connection between the various parts of the building. The Explanation in effect splits on otherwise integral unit or building into multiple buildings, liable to be assessed separately. It would have been otherwise going by the main part of the definition alone. Evidently this has been done to encourage construction of apartments and flats and to alleviate the burden that will otherwise fall heavily by assessing the entire building as one unit. The fact that the undivided interest in the land is transferred only subsequent to the construction of the flats is in my opinion, irrelevant in deciding on the applicability of Explanation 2. The building in this case therefore satisfies the conditions of Explanation 2 to S.2(e). The assessing authority has not given any reasons in Ext.P7 to deny the benefit of separate assessment to the flat owners in this case, or any justification for assessing the entire building as one unit on the developer. Such assessments without keeping in mind the basic philosophy underlying the Explanation will only act as a damper to such construction ``` WP(C) NO. 6508 OF 2022 ``` ``` 7 ``` activity in the State.” 8. Bearing in mind the above observations and on a perusal of Ext.P8 order of assessment, it is revealed that the order has been passed without considering any of the relevant issues. There is a clear non-application of mind and the assessing officer failed to even consider the list of apartment owners, the date on which the agreements of sale deeds were executed, the cost of construction incurred for completing the apartment and the persons who shared the cost of construction, which were all significant matters to be reckoned while arriving at the consideration as to who are liable to pay the building tax under the statute. It is also revealed from Ext.P8 that the Assessing Officer proceeded on a pre-concieved notion and failed to consider the settled principles of law laid down by this Court in numerous decisions. 9. In view of the above, this Court is of the opinion that Ext.P8 is perverse in as much as the order has been issued without application of mind and without giving reasons for arriving at the ``` WP(C) NO. 6508 OF 2022 ``` ``` 8 ``` conclusion and also failed to consider the necessary requirements, contemplated under the statute. Ext.P8 is therefore legally invalid. 10. Accordingly, I set aside Ext.P8. However, liberty is granted to the third respondent, Assessing Officer, to pass fresh orders of assessment, after granting an opportunity of hearing to the petitioner, as expeditiously as possible, at any rate, within a period of three months from the date of receipt of a copy of the judgment. The writ petition is allowed as above. **Sd/-** BECHU KURIAN THOMAS JUDGE ssa/ ``` WP(C) NO. 6508 OF 2022 ``` ``` 9 ``` ## **`APPENDIX OF WP(C) 6508/2022`** ## **`PETITIONER’S EXHIBITS`** ``` Exhibit P1TRUE COPY OF THE OCCUPANCY CERTIFICATE DATED 12-08-2021 ISSUED BY SECRETARY, THRIPUNITHURA MUNICIPALITY ``` ``` Exhibit P2TRUE COPY OF THE RETURN SUBMITTED BY THE PETITIONER BEFORE THE 3RD RESPONDENT Exhibit P3TRUE COPY OF THE LETTER DATED 25-08-2021 ISSUED BY PETITIONER TO THE 3RD RESPONDENT ``` ``` Exhibit P4TRUE COPY OF THE NOTICE DATED NIL ISSUED BY 3RD RESPONDENT TO THE PETITIONER Exhibit P5TRUE COPY OF THE LETTER DATED 21-12-2021 ISSUED BY PETITIONER TO 3RD RESPONDENT ``` ``` Exhibit P6TRUE COPY OF THE LETTER DATED 18-01-2022 ALONG WITH THE LIST Exhibit P7TRUE COPY OF THE STATEMENT DATED 18-01-2022 GIVEN BY REPRESENTATIVE OF THE COMPANY Exhibit P8TRUE COPY OF THE ASSESSMENT ORDER IN RESPECT OF BUILDING TAX DATED 15-02-2022 ISSUED BY THE THIRD RESPONDENT Exhibit P9TRUE COPY OF THE PROCEEDINGS OF THE 3RD RESPONDENT DATED 15-02-2022 Exhibit P10TRUE COPY OF THE PROCEEDINGS DATED 15-02-2022 OF THE 3RD RESPONDENT Exhibit P11TRUE COPY OF THE LIST OF INDIVIDUAL RETURNS SUBMITTED BY THE PETITIONER IN RESPECT OF 57 APARTMENTS Exhibit P12TRUE COPY OF THE LIST OF 70 APARTMENTS ALONG WITH APARTMENT NO. AND DOOR NO Exhibit P13TRUE COPY OF THE JUDGMENT DATED 09-10-2017 IN W.P(C) NO. 40899/2016 OF THIS HON'BLE COURT ``` ``` WP(C) NO. 6508 OF 2022 ``` ``` 10 ``` ``` Exhibit P14 ``` ``` TRUE COPY OF THE JUDGMENT DATED 16-07-2018 IN W.P(C) NO. 30685/2017 OF THIS HON'BLE COURT. ```