M/S. Holmarc Opto Mechatronics ... vs The Secretary
2022 Latest Caselaw 8149 Ker

                   IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                        PRESENT

                    THE HONOURABLE MR. JUSTICE SHAJI P.CHALY

               FRIDAY, THE 1ST DAY OF JULY 2022 / 10TH ASHADHA, 1944

                               WP(C) NO. 3603 OF 2016

PETITIONER:

              M/S. HOLMARC OPTO MECHATRONICS (P) LTD
              7/633, KAKKATTUCHIRA, FRINDSVALLY, TRIKKAKKARA.P.O., KAKKANAD,
              COCHIN - 15, R/BY ITS MANAGING DIRECTOR JOLLY CYRIAC.

              BY ADVS.SRI.JOBY CYRIAC
              SRI.SANJAY THAMPI


RESPONDENTS:

     1        THE SECRETARY, KALAMASSERY MUNICIPALITY,
              KALAMASSERY, ERNAKULAM - 682 033.

     2        THE GENERAL MANAGER
              DISTRICT INDUSTRIAL CENTRE, KAKKANAD, ERNAKULAM - 682 030.

     3        THE STATE OF KERALA
              REP. BY ITS SECRETARY, DEPARTMENT OF INDUSTRIES,
              THIRUVANANTHAPURAM - 695 001.

     4        THE KALAMASSERY MUNICIPALITY, KALAMASSERY,
              ERNAKULAM - 682033, REP. BY ITS SECRETARY


              R2 AND R3 - SRI.K.P.HARISH, SENIOR GOVERNMENT PLEADER
              R1 AND R4 - SRI.M.K.ABOOBACKER, SC


      THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01.07.2022, THE
COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 W.P.(C)No.3603 of 2016
                                       :: 2 ::



                                                                 CR

                                    JUDGMENT

Dated this the 1st day of July 2022

Petitioner is a private limited company and it owns a

manufacturing industrial unit in an Industrial Development Area

declared by the State Government namely, Kalamassery Industrial

Development Area (HMT Industrial Estate, Kalamassery). According to

the petitioner, the company has secured all statutory permissions and

licenses from the Secretary of the Kalamassery Municipality/the first

respondent and the General Manager, District Industries Centre/the

third respondent. It is further submitted that by the end of October 2013,

the petitioner company constructed a new factory building having an

extent of 724.97 sq.metres in accordance with law. The grievance

highlighted by the petitioner is in respect of an action taken by the

Secretary of the Municipality as per Exts.P10 and P11. Ext.P10 is an order

passed by the Secretary dated 4.1.2016 levying the property tax of

Rs.4,79,573/- for the period 2013-14 to 2015-16. Ext.P11 is a statutory

demand raised on 4.1.2016 to recover the tax. It is thus basically

challenging the legality and correctness of the levy and demand, the writ

petition is filed.

W.P.(C)No.3603 of 2016 :: 3 ::

2. The paramount contention advanced by the petitioner is that as

per Section 450(i) of the Kerala Municipality Act, 1994 as well as Section 6

of the Kerala Industrial Single Window Clearance Act 1999, all industrial

undertakings established or proposed to be established in industrial

areas declared by Government are exempted from obtaining building

permit from Local Self Government Institutions, Town Planning

Department and other authorities. It is also the case of the petitioner

that even prior to the above enactments, the Government of Kerala as

per Ext.P8 order had exempted such industrial units from obtaining

clearances from local bodies. That apart the State of Kerala has clarified

the same as per Ext.P9 circular. The sum and substance of the contention

of the petitioner is that the said legal aspects pointed out by the

petitioner would make it clear that the petitioner, who is functioning in

the notified industrial estate is exempted from obtaining building permit

to establish or to construct a factory building or any other building in the

industrial area. However, it is submitted by the learned counsel for the

petitioner that the Secretary of the Kalamassery Municipality has

illegally and incorrectly classified petitioner's factory building as an

unauthorized building for the purpose of levying municipal property tax

and issued the demand notices.

W.P.(C)No.3603 of 2016 :: 4 ::

3. The State Government has filed a detailed counter affidavit

basically supporting the contentions advanced by the petitioner and has

also pointed out the benefits enjoyed by an establishment like the

petitioner on the basis of various Government Orders. Among other

contentions, it is submitted that land to an extent of 10.65 cents

comprised in Sy.No.1037/10 (Re.Sy.No.121/2, Block-6) of Thrikkakkara

North Village, Ernakulam District along with B7 shed thereon was

allotted in Hire purchase basis in favour of M/S Homarc slides and

control (P) Ltd. subject to the conditions stipulated in G.O.

(MS)No.294/06/RD dated 07.10.2006 of Revenue (A) department (Ext.P1).

An extent of 13 cents in Sy.No.121/2, Part in block No.6 of Thrikkakara in

contiguous to its assigned land was also allotted in hire purchase basis to

them for expanding its existing activity as per proceedings

No.B2/1436/07 dated 26.11.2007 the GM, DIC, EKM (Ext.P2). Also an

extent of 7 cents of vacant land, near to the unit comprised in

Sy.No.121/2 part in Thrikkakara North Village in HMT AIE, Kalamassery

was allotted on hire purchase basis as per proceedings No.B2/1436/09

dated 17.1.2011 of the GM, DIC, EKM. Hence total extent of land allotted

to M/S Holmarc Slides & Controls (P) Ltd. was 30.0625 cents including

10.625 cents of assigned land. It is also submitted that the petitioner has W.P.(C)No.3603 of 2016 :: 5 ::

submitted application on 18.02.2009 for getting approval for a building

proposed to be constructed in the 13 cents of land comprised in

Sy.No.121/2 part in Block No.6 of Thrikkakara North Village with an area

of 413 Sq.m. After having some physical verification, the respondent has

directed the unit to produce a revised plan incorporating the actual

utilization of the proposed build up area. Accordingly, the unit has

resubmitted a revised plan with total build up area of 724.97 Sq.m. to

construct as per the plan submitted. Later, on 27.9.2011 by considering

their application, the submitted building plan has been approved as per

Ext.P3 & P4. As per G.O.(Rt)No.591/94/ID dated 05/07/1994 of Industries

Dept. and Section 6 of Kerala Industrial Single Window Clearance Boards

and Industrial Township Area Development Act 1999 an Industrial

Development Area, shall be exempted from obtaining clearances from

the concerned local bodies. As per G.O.(MS)No.327/63/Ind dated

09.04.1963 of Industries (C) Dept, Government have ordered that after the

acquisition of the said 900 acres of land for establishing Machine Tool

Factory in central sector sanction was also accorded for making the area

available to the Hindustan Machine Tools Ltd. (HMT), Bangalore, for free

of cost. As per G.O.(MS)No.505/64/Ind. dated 31.07.1964 of Industries (G)

Dept., Government have ordered that after the acquisition of the said 900 W.P.(C)No.3603 of 2016 :: 6 ::

acres of land for establishing Machine Tool Factory, it shall be treated as

Development Area as contemplated in ruled 2(d) of the Rules for the

assignment of Government lands in Development areas for industrial

purpose" appended to G.O.(P)No.220/Rev dated 30.3.1964 and assigned on

registry to the HMT Ltd., Bangalore. Since the lands is declared as

Development Area as per GO(MS)No.505/64/Ind dated 31.07.1964, the

units which are established in DA/DP/MIE are exempted from obtaining

licences/clearances from the concerned local bodies. As per

GO(RT)No.591/94/ID dated 05/07/94, it is clear that the units established

in DA/DP/MIE shall be exempted from obtaining licences/clearances

from concerned local bodies, but all industrial units shall have to obtain

the same from the concerned, GM, DIC and as per GO(MS)169/69/ID

dated 5.4.1969 pay any taxes, cess and other charges payable in respect of

the said properly to state or Central Government, corporation of any

other legally constituted body in due time. It is also submitted that when

the petitioner has approached the office of the second respondent for

intervening in the matter and requested to issue necessary direction to

the Kalamassery Municipality to treat the construction as legal and to

issue direction to accept the property tax, as per Ext.P14, the office has

given necessary direction to the Kalamassery Municipality to consider W.P.(C)No.3603 of 2016 :: 7 ::

the matter as per the prevailing rules. As per GO(Rt)No.591/94/ID dated

5.07.1994 and Section 6 of Kerala Industrial Single Window Clearance

Boards and Industrial Townships Area Development Act, 1999, all

industrial undertaking being established or proposed to be established in

industrial areas shall be exempted from obtaining any type of permits

from Municipalities or Grama Panchayat etc. for construction of building

for starting an industrial undertaking. Hence Ext.P10 & Ext.P11 notices

issued by the 1st respondent are illegal and therefore liable to be set

aside. The classification of the petitioner's building as unauthorised

building and demand notice issued by the Kalamassery Municipality as

per Ext.P10 and Ext.P11 is ultra vires and illegal as per the above

mentioned Government Orders and the provision of existing law. The

HMT Ancillary Industrial Estate is situated in the 900 Acres of land

assigned to the HMT Ltd as per GO(MS)No.327/63/IND dated 09/04/1963

and which is later declared as Industrial area as per

GO(MS)No.505/64/IND dated 31/07/1964. All industrial undertakings in

HMT Ancillary Industrial Estate are exempted from obtaining from local

bodies permission to construct a factory building or to install

machineries therein. So the classification of the petitioner's building as

unauthorised is illegal.

W.P.(C)No.3603 of 2016 :: 8 ::

4. Even Though the Secretary of the Municipality has not filed any

counter affidavit or statement, learned counsel for the Municipality has

advanced various arguments including that the State Government or the

District Industries Centre are not intimating the exemptions given to the

industrial establishments by the State Government.

5. I have heard learned counsel for the petitioner Sri.Joby Cyriac

learned Standing Counsel for the Municipality and the Secretary

Sri.M.K.Aboobacker and learned Senior Government Pleader for the State

and its officials Sri.K.P.Harish and perused the pleadings and material on

record.

6. Respective counsel have advanced their arguments in

accordance with the contentions recorded above. The sole question to be

considered is whether the Municipality is entitled to levy property tax

against the petitioner. Before going to the provisions of law, it would be

worthwhile to refer to Ext.P8 order passed by the State Government

dated 5.7.1994 exempting the industrial establishments from obtaining

licenses of the local bodies functioning within the industrial area

declared by the Government. The order clearly specifies that the

industrial units located in the Industrial Estates/Development Area/Mini

Industrial Estate/a consolidated list of which are appended to the order, W.P.(C)No.3603 of 2016 :: 9 ::

shall be exempted from obtaining clearances from local bodies as per

notifications dated 6.8.92 and 6.5.92. The appendix annexed to Ext.P8

Government Order would clearly show that in Ernakulam District

Kalamassery Industrial Estate is declared as an industrial estate by the

State Government. Going by the Government Order, it is clear that even

prior to the introduction of the Kerala Municipality Act, 1994 with effect

from 30th May of 1994, the Government have exempted industrial

establishments from obtaining clearances from local bodies. Anyhow,

Section 450 of Act 1994 is an enabling provision granting exemption to

the industrial establishments functioning within the notified industrial

area. From the provisions of Section 448 of Act 1994 it is clear that

license is required for the construction of industry, factory or other

workplace and to use steam power or any other power therein or to

install other machineries.

7. Section 450 of Act 1994 reads thus:

450. Exemption.-- Notwithstanding anything contained in Section 448 no permission of the Municipality shall be required for the installation of the following machinery or manufacturing units or Industrial units, as the case may be, namely:--

(a) Electrical and non-electrical appliances and machinery intended to be used for domestic or personal purposes;

(b) Electrical and non-electrical appliances installed for W.P.(C)No.3603 of 2016 :: 10 ::

agricultural purposes;

(c) Static transformer stations, condenser stations and rectifier stations which will not require regular attention;

(d) portable drilling machines and portable machines used for construction purposes like concrete mixers;

(e) a mechanical device installed at workshop or workplace attached to educational institution or for scientific purposes

(f) mechanical devices introduced by the Kerala State Electricity Board for generation and transmission of electricity;

(g) installations of the Kerala Water Authority for Water Supply and sewerage;

(h) Industrial units, certified by the Industries Department of the Government or by the Kerala State Pollution Control Board as non-polluting industry and with machinery having capacity of less than five horse power;

(i) Industrial units in the area declared by the Government or the Government controlled agency as an Industrial Estate, Industrial Development Area, Industrial Development Plot, Industrial Growth Centre, Export Processing Zone or Industrial Park:

(j) Industrial units certified by the Kerala State Pollution Control Board as Green and White Category.

Provided that the owner of any industrial unit specified under item (h) and (i) shall register the unit in the Municipality by remitting the prescribed fee.

8. I notice that as per Act 14/2018 Section 450 is amended by

incorporating Entry (j) by including industrial units certified by the

Kerala State Pollution Control Board as Green and White category and

made other consequential amendments also to deal with the

requirements contained under Section 450.

W.P.(C)No.3603 of 2016 :: 11 ::

9. On a proper appreciation of the said provision, it is clear that

the establishments in any notified industrial area enjoy a statutory

exemption from securing clearances from the local bodies. So also, the

Kerala Industrial Single Window Clearance Board and Industrial

Township Area Development Act, 1999 was introduced on and with

effect from the year 1999. Section 6 of said Act, 1999 is relevant to the

context, which reads thus:

"6. Exemption from licenses etc. - Notwithstanding anything contained in any law for the time being in force all industrial undertakings being established or proposed to be established in industrial area shall be exempted from obtaining permits from Municipalities or Grama Panchayats, Town Planning Department or Development Authorities for construction of buildings for starting an industrial undertaking."

10. Therefore, on a conjoint reading of Ext.P8 Government order,

the provisions of law deliberated above and the submissions made by the

State in its counter affidavit, it is clear that the Panchayat was not right

in levying property tax against the petitioner as per Ext.P10 and

demanding the same as per Ext.P11 and other consequential notices.

Taking into account the said legal and factual aspects, I am of the

undoubted opinion that when a statute exempts or grant benefits to

industrial establishments located within the notified industrial areas,

the local body is precluded from taking any action on the basis of the W.P.(C)No.3603 of 2016 :: 12 ::

provisions of law applicable to other industrial establishments. I am also

of the view that exemption is granted by the statute as well as the

Government in order to promote industries within the State and to

facilitate an easy mechanism for an industrialist to start the

establishments without being saddled by the intricacies contained

under various statutes, by resorting to the single window clearance

methodology provided under Act 1999. However, learned counsel for

the Municipality submitted that the Government Orders as well as the

starting of the industrial units in the industrial estates are not informed

by the respective statutory authority to the Municipality, which is only

creating the situation like the present one and therefore, there may be a

direction to the State Government and the District Industries Centre to

inform the Municipality whenever an industrial establishment is started.

In my considered opinion, when a notification/order is published by the

Government in the gazette and when provisions are made under

different statutes, all are presumed to know the law and therefore, there

is no much force in the said contention advanced. Anyhow, since such a

contention is advanced by the Municipality, it is for the State

Government and its officials to consider as to whether any intimation is

to be given to the local bodies in regard to the discussed aspects. W.P.(C)No.3603 of 2016 :: 13 ::

Upshot of the above discussion is that the writ petition is allowed

and Ext.P10 order levying property tax on the petitioner, Ext.P11 order

demanding the same and any other consequential demands to recover

the property tax would stand quashed.

Sd/-

SHAJI P. CHALY JUDGE jes W.P.(C)No.3603 of 2016 :: 14 ::

APPENDIX PETITIONER'S EXHIBITS:

EXT.P1 TRUE COPY OF ORDER GO(MS) NO.294/06/RD DATED 7.10.2006 ISSUED BY THE DEPARTMENT OF REVENUE, STATE OF KERALA, ALLOTING AN EXTENT OF 10.02 CENTS OF LAND SITUATED IN THE HMT INDUSTRIAL ESTATE, KALAMASSERY ALONG WITH A SHED BEARING NO-B7 TO THE PETITIONER.

EXT.P2 TRUE COPY OF THE PROCEEDINGS NO.B2/1436/07 DATED 26.11.2007 OF THE 2ND RESPONDENT ALLOTING AN EXTENT 13 CENTS TO THE PETITIONER.

EXT.P3 TRUE COPY OF THE LETTER NO.B2 DATED 28.5.2009 ISSUED BY THE 2ND RESPONDENT PERMITTING THE PETITIONER TO CARRY OUT CONSTRUCTION IN ACCORDANCE WITH THE PLAN SUBMITTED.

EXT.P4 TRUE COPY OF THE COVERING LETTER NO.A12/1436/01 DATED 27.09.2011 OF THE 2ND RESPONDENT SENT ALONG WITH THE APPROVED BUILDING PLAN. EXT.P5 TRUE COPY OF PERMIT NO.94/2012 ISSUED BY THE DIRECTOR OF FACTORIES AND BOILERS VIDE HIS ORDER NO.T3-2844/2012/F & B/R.DIS. DATED 8.5.2012 ALONG WITH ITS COVERING LETTER.

EXT.P6 TRUE COPY OF THE CERTIFICATE OF STABILITY DATED 9.8.2012 ISSUED TO THE PETITIONER COMPANY BY THE COMPETENT AUTHORITY UNDER THE DEPARTMENT OF FACTORIES AND BOILERS.

EXT.P7 TRUE COPY OF THE FACTORY LICENCE DATED 2.12.2014 ISSUED BY THE JOINT DIRECTOR OF THE FACTORIES & BOILERS TO THE PETITIONER COMPANY. EXT.P7(A) TRUE COPY OF THE LICENCE NO.H/294/2010 - 2011 ISSUED BY THE 1ST RESPONDENT U/S.447 OF MUNICIPALITY ACT FOR THE YEAR 2010-2011 TO THE PETITIONER - COMPANY. EXT.P8 TRUE COPY OF THE RELEVANT PORTION OF THE GOVERNMENT ORDER, NO.GO(RT)NO.591/94/ID DATED 5.7.1994 EXEMPTING SOME INDUSTRIAL ESTATE/DEVELOPMENT AREA ETC., INCLUDING THE KALAMASSERY DEVELOPMENT AREA. EXT.P9 TRUE COPY OF THE G.O.NO.17853/R.A1/2013/LSG DATED 11.6.2013 ISSUED BY THE 3RD RESPONDENT THROUGH ITS SECRETARY, LSG.

EXT.P10 TRUE COPY OF THE PROPERTY TAX ASSESSMENT ORDER NO.R1-18112/15 DATED 4.1.2016 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER COMPANY FIXING AN ANNUAL PROPERTY TAX AS RS.1,82,694 + LC WEF.1/10/2013. EXT.P11 TRUE COPY OF THE DEMAND NOTICE TO MUNICIPAL PROPERTY TAX NO.R1-18112/15 DATED 4.1.2016 FOR A TOTAL AMOUNT OF RS.479573/- (WITH PENALTY) CLASSIFYING THE FACTORY BUILDING AS `UNAUTHORISED BUILDING'.

EXT.P12 TRUE COPY OF THE RECEIPT NO.48740 DATED 12.1.2016 FOR RS.46,756/- ISSUED BY THE 1ST RECEIPT TOWARDS PROPERTY TAX PAID WITH RESPECT TO BUILDING OF THE PETITIONER COMPANY.

EXT.P13 TRUE COPY OF THE LETTER OF REQUEST DATED 15.1.2016 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT.

EXT.P14 TRUE COPY OF THE LETTER NO.A12/1436/2001 DATED 21.1.2016 OF THE 2ND RESPONDENT ISSUED TO 1ST RESPONDENT.

                                       // true copy //      P.S. TO JUDGE