Kerala High Court
Alexander K. Thomas vs District Collector, Kollam on 21 May, 2024
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE EASWARAN S.
TUESDAY, THE 21ST DAY OF MAY 2024 / 31ST VAISAKHA, 1946
WP(C) NO. 10989 OF 2018
PETITIONER/S:
ALEXANDER K. THOMAS, AGED 30 YEARS
S/O. P.K.THOMAS, K. P. T. SUDHIN BHAVAN,
IVARKALA WEST NORTH, PUTHANAMBALAM P.O.,
KOLLAM DISTRICT-691001.
BY ADVS.
SMT.M.R.JAYALATHA
SRI.R.RENJITH
RESPONDENT/S:
1 DISTRICT COLLECTOR, KOLLAM
CIVIL STATION KOLLAM, KOLLAM-691001.
2 THE REVENUE DIVISIONAL OFFICER
KOLLAM-691001.
3 TAHSILDAR
KUNNATHUR TALUK, KUNNATHUR P.O., KOLLAM-690540.
4 THE VILLAGE OFFICER
KUNNATHUR P.O., KOLLAM-690540.
OTHER PRESENT:
SPL. GP (TAXES) SRI MUHAMMED RAFIQ
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 09.04.2024, THE COURT ON 21.05.2024 DELIVERED THE
FOLLOWING:
WP(C) 10989/2018
2
JUDGMENT
The proceedings for imposition of luxury tax on the
building of the petitioner is under challenge.
2. The petitioner claims that he is the absolute
owner of 1.9 Ares of property comprised in survey
Nos.218/17, 218/18-2, 218/16 and 218/4 of Kunnathur
village. The petitioner claims that he got title over the
property by settlement deed No.3203/2013 of
Sasthamcotta SRO. Having constructed a building having
plinth area of 165.46 sq.m., a certificate was issued by the
Kunnathur Grama Panchayat assessing the building and
imposing building tax.
3. While so, the Tahsildar, Kunnathur, who is the 3 rd
respondent, initiated proceeding for assessment under the
Kerala Building Tax Act, 1975 (hereinafter referred to as the
"Act", for short) assessing the building of the petitioner and
Ext.P2 notice dated 3.5.2016 was issued. Thereafter,
Ext.P3 order of assessment was issued and Ext.P4 demand
WP(C) 10989/2018
was raised for an amount of Rs.8,000/- towards luxury tax.
According to the petitioner, the proceedings of the Tahsildar
shows that the assessment was done for the entire plinth
area of 292.07 sq.m. The appeal filed by the petitioner
against Ext.P4 has been rejected by the 2 nd respondent vide
Ext.P6 order dated 21.10.2016 on the ground that it was
filed beyond the period prescribed for filing the same and
hence barred by limitation. Petitioner thereafter approached
the 1st respondent by way of revision under Section 13 of
the Kerala Building Tax Act 1975. Petitioner's revision
against the appellate order also has been rejected by the
1st respondent-District Collector vide Ext.P7 order dated
21.12.2017. Thus, the petitioner impugns Exts.P4, P6 and
P7 orders in the present writ petition.
4. The respondents have filed a counter affidavit, in
which the orders impugned are sought to be sustained by
placing reliance on the decision of this Court in Rasheed v.
Tahsildar [2004 (3) KLT 945]. According to the
respondents, though it is true that the petitioner produced
WP(C) 10989/2018
separate tax receipts and electricity bills in the names of
himself and his father, on inspection of the said building it is
seen that the building is a single unit and have a common
plinth area. Therefore, according to the respondents, the
upper portion of the building have a common entrance
which leads to the rooms of each building and not
separated each other and therefore, liable to be assessed
as a whole.
5. I have heard Smt.M.R Jayalatha, learned counsel
appearing for the petitioner, and Sri.Mohammed Rafiq,
learned Special Government Pleader (Taxes), appearing for
the respondents.
6. Before proceeding to assess the rival submissions
raised across the bar, it requires to be noted that despite
the appeal filed by the petitioner against the assessment
order being rejected on the ground of the limitation, the 1 st
respondent entertained the revision petition and decided
the issue on merits. No argument was advanced before this
Court on behalf of the respondents on the ground of
WP(C) 10989/2018
maintainability of appeal before the 2nd respondent and
further that since the 1st respondent decided to entertain
the revision petition and proceeded to decide the case on
merits, this Court proceeds to consider the validity of the
order impugned on merits.
7. On the basis of the pleadings on record, the point to
be decided is whether the building owned by the petitioner
is to be assessed as separately or along with existing
building for payment of building tax under the provisions of
the Act. Before delving into the said contention, it would
be advantageous to extract the definition of the term
"building" under the Act. Section 2(e) of the Act defines
"building", as under:
(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
WP(C) 10989/2018
latrine which is not attached to the main
structure.
Explanation 1.―In the case of buildings
constructed for providing housing
accommodation for workers and their families
residing in plantations, in pursuance of section
15 of the Plantations Labour Act, 1951 (Central
Act 69 of 1951) or buildings constructed under
the Government of India Subsidised Housing
Scheme for industrial workers, each part of a
building providing or intended to provide
accommodation for a worker or a worker and
his family shall be deemed to be a separate
building.
Explanation 2.―Where a building consists
of different apartments or flats owned by
different persons, and the cost of
construction of the building was met by all
such persons jointly, each such apartment
or flat shall be deemed to be a separate
building;"
Explanation-2 to Section 2(e) of the Act forms the crux of
WP(C) 10989/2018
the dispute in the present writ petition. The Section
provides that where a building consists of different
apartments or flats owned by different persons, and the
cost of construction of the building was met by all such
persons jointly, each such apartment or flat shall be
deemed to be a separate building. Therefore, it is the
contention of the learned counsel for the petitioner that her
client's portion of the building is liable to be assessed
separately and not as a single unit. She places reliance on
the decision of this Court in Ananthapadmanabhan Nair
A.B. and another v. District Collector, Ekm. and
Others [2016 (1) KHC 388].
8. The point that arose for consideration in
Ananthapadmanabhan Nair A.B (supra) was similar to
the one on hand in this writ petition. While considering the
parameters which the assessing authority should follow
while assessing the buildings to which Explanation-2 to
Section 2(e) applies, this Court categorically held that the
assessing authority has to examine whether the ownership
WP(C) 10989/2018
in the apartments that were constructed vested in different
persons and the said persons had contributed to the cost of
construction of the building, etc. Therefore, this Court was
of definite view that to arrive at a finding on the issue, the
authority had to consider documents that would suggest an
ownership of the various persons in the different portions of
the building that are stated to have been assigned in their
favour. Therefore, the learned counsel for the petitioner
submitted that a similar exercise also may be directed to be
done on the facts of this case also.
9. On the other hand, Sri.Mohammed Rafiq, learned
Special Government Pleader (Taxes), appearing on behalf of
the respondents would oppose the said request made by
the petitioner's counsel. He placed reliance on a Full Bench
decision of this Court in District Collector v. Sreekumari
Kunjamma [2011 (1) KLT 248 (F.B)], wherein a specific
question was considered by the Full Bench of this Court as
to whether a single building consisting of two separate flats
constructed by same owner must be assessed as a single
WP(C) 10989/2018
building, if it does not fall within Explanation-1 or 2 to
Section 2(e) of the Act. He would specifically refer to the
findings rendered in paragraph No.3 of the said judgment
and would pray for the dismissal of the writ petition.
10. The question whether the petitioner is entitled to
succeed or not will depend on the analysis of the facts on
hand and the provisions of the Kerala Building Tax Act,
1975.
11. Ext.P1 is the building ownership certificate given
by Kunnathur Panchayat and Ext.P1(b) is the plan which
shows the plinth area of the building. It is the specific case
of the petitioner that the building was constructed out of
the own funds of the petitioner by treating as a single unit,
whereas the petitioner is not liable for the luxury
tax/building tax on the property owned by her father. A
perusal of Ext.P7, which is the order on revision, shows that
the Tahsildar has reported that the two buildings are having
the same plinth area and does not have any separation on
the basement. Since, according to the Tahsildar, the
WP(C) 10989/2018
building does not have a separate differentiation in the
areas and it is being used as a single unit, it is liable to be
assessed. These reports were placed before the revisional
authority. One must certainly remember that the revisional
authority which discharges the quasi-judicial function was
bound to consider the facts pleaded before him and
independently arrive at a finding and thereafter apply the
facts to the law pleaded. The pertinent question is as to
whether the revisional authority, namely, the 1 st
respondent, had discharged its statutory obligation.
12. Before considering the issue as to whether the 1 st
respondent had discharged its statutory obligations as a
revisional authority under the provisions of the Act or not, it
would be advantageous to refer to the decision cited by the
parties across the bar. According to Sri. Mohammed Rafiq,
learned Special Government Pleader (Taxes), the point
raised in the writ petition is squarely covered by the
decision of the Full Bench of this Court in Sreekumari
Kunjamma (supra). While this Court has given an anxious
WP(C) 10989/2018
consideration to the judgment cited by Sri.Mohammed
Rafiq, learned Special Government Pleader (Taxes), one
must necessarily find that the said decision does not
support the cause projected by the State. Before the Full
Bench of this Court, two questions were raised.
(1) Whether a single building consisting of two
separate flats constructed by the same owner has
to be assessed as a single building, if it does not
fall within Explanations (1) and (2)?
(2) Whether separate assessments of each
and every flat is called for only in respect of
constructions covered by Explanations (1) and (2).
13. The Full Bench in Sreekumari Kunjamma
(supra) considered the issue and came into the conclusion
as under:
"4. What is clear from the above provision is
that a building irrespective of the number of flats
or apartments contained therein, should be
assessed as a single unit and the exceptions are
only those stated in Explanations 1 and 2 stated
WP(C) 10989/2018
above. A Division Bench of this court in SHENOY
REAL ESTATES (P) LTD. VS. TAHSILDAR reported in
2004(1) KLT 133 held that sale of flats by a builder
after completion of construction of apartment
building to different owners will not justify separate
assessment of each flat under Explanation (2) to
Section 2(e) of the Act. What is to be noted from
this judgment is that unless apartment building is
constructed by the joint owners by sharing the
cost, each and every apartment cannot be
assessed as a separate building, no matter the
building after construction was sold by the owner
to different persons. In this case different
ownership for the building happens after
completion of construction of the building and, the
sale made thereafter to different owners is
immaterial for the purpose of assessment. In fact,
the incidence of tax is on completion of
construction of the building and it is immaterial as
to whether the owner retains the building or
transfers the same in full or in part or in pieces
after completion of construction. Separate
assessment of each and every flat is called for only
in respect of the constructions covered by
Explanations (1) and (2) of Section 2(e)."
14. Later, the same issue came up for consideration
WP(C) 10989/2018
of the Hon'ble Supreme court in State of Kerala and
Others v. A.P.Mammikutty [2015 (3) KLT 138]. The
Hon'ble Apex Court went on to analyse what is meant by
"residential building". Section 2(l) of the Act was thereafter
quoted and it was held that the expression "residential
building" cannot be interpreted without reference to the
term "building" and Explanation-2 to Section 2(e) of the
Act. The Apex Court also held that the determination of
the annual luxury tax on all residential buildings having a
plinth area of 278.7 sq.m or more which have been
completed as on 1.4.1999 are liable to be assessed. In the
considered view of the Hon'ble Apex Court, the cost of
construction of the building is to be met by all such persons
jointly and the Explanation as quoted before is required to
be appositely understood. Therefore, the assessment
orders were set aside and the matter was remanded to the
revenue authorities to compute the luxury tax in the
manner which was clarified therein under paragraph No.14.
15. Following the principles expounded by the Apex
WP(C) 10989/2018
Court, this Court in Ananthapadmanabhan Nair A.B.
(supra) had adopted the same manner.
16. In the considered view of this Court, the facts of
the present case squarely come within the ambit of the
principles laid down by the Apex Court in A.P.Mammikutty
(supra) as well as the course of action adopted by this
Court in Ananthapadmanabhan Nair A.B (supra).
17. Now to answer the question whether the statutory
authorities has discharged its obligation or not, it is
necessary to keep in mind the principles governing the
consideration of a statutory appeal under a taxing statute.
It is trite principle of law that the quasi judicial authority
vested with power to decide an issue judicially is expected
to discharge its function applying its mind independently.
When the exercise of such power is found to be ex facie
arbitrary and without application of mind, certainly this
Court would be justified in exercise of its power of Judicial
Review. Applying the above test, if the impugned orders in
the writ petition are scrutinised within the permissible limits
WP(C) 10989/2018
of exercise of judicial review under Article 226 of the
Constitution of India, it is explicitly clear that the 1 st
respondent had miserably failed to apply its mind on the
various intrinsic facts and law raised before it. A reading of
Ext.P7 order makes it evidently clear that the report dated
5.10.2017 of the Tahsildar, the assessing authority under
the Act, was blindly followed by the appellate authority
without any independent application of mind. In other
words, in exercise of the quasi-judicial power, the 1 st
respondent failed to discharge the obligation conferred on
him and merely decided to accept the report of the
Tahsildar while deciding to reject the revision. Such
exercise of power is certainly arbitrary and vitiated by non-
application of mind and definitely failure of exercise of
power vested under the statute and hence qualifies for
interference in exercise of the power vested in this Court
under Article 226 of the Constitution of India.
18. Normally, if on finding that exercise of the
appellate power was improper, this Court would be inclined
WP(C) 10989/2018
to remand the matter back to the appellate authority to
decide the appeal afresh. But that will not resolve the issue.
The notice of assessment proceeded merely on the
presumption that the building constructed exceeded
permissible plinth area and hence was liable for
assessment. The 3rd respondent even failed to address the
basic question before it, whether he had jurisdiction to
assess the portion of the building constructed before
1.4.1999 or even it was constructed after 1.4.1999 does it
satisfy the requirement of explanation to Section 2(e) of
the Act and in terms of parameters laid down by the Apex
Court in Para 14 of A.P.Mamikutty (supra). Therefore,
this Court finds that the entire issue requires
reconsideration at the hands of the assessing authority.
19. Hence, the writ petition is allowed. Exts.P3, P4,
P6 and P7 are set aside. The matter is remanded back to
the Tahsildar, who is the 3rd respondent, to reconsider the
issue in the light of the direction issued in paragraph No.14
of the judgment of the Apex Court in A.P.Mammikutty
WP(C) 10989/2018
(supra) with regard to the requirement of meeting the total
cost of construction of the building for the purpose of
Explanation-2 to Section 2(e) of the Act. Further, the 3 rd
respondent also shall consider the specific plea raised by
the petitioner in this writ petition that the area which was
constructed before 1.4.1999 cannot be assessed under the
Kerala Building Tax Act, 1975. The petitioner will be free to
substantiate his case with such evidence as required under
law. The said exercise shall be undertaken by the 3 rd
respondent within a period of four months from the date of
receipt of copy of this judgment. To enable the 3 rd
respondent to reconsider the matter as above, all
proceedings initiated to recover the demand as per Ext.P2
shall be kept in abeyance.
Writ petition ordered accordingly. No order as to
costs.
Sd/-
EASWARAN S.
JUDGE
jg
WP(C) 10989/2018
APPENDIX OF WP(C) 10989/2018
PETITIONER EXHIBITS
EXHIBIT P1 A TRUE COPY OF THE CERTIFICATE ISSUED BY THE
KUNNATHUR GRAMA PANCHAYAT DATED 24.6.2016.
EXHIBIT P1A A TRUE COPY OF THE TAX RECEIPT ISSUED FROM
KUNNATHUR GRAMA PANCHAYATH, DTD. 14.11.2017
BY NO. D2031281.
EXHIBIT P1B A TRUE COPY OF THE PLAN OF THE BUILDING.
EXHIBIT P2 A TRUE COPY OF THE NOTICE OF DEMAND DATED
3.5.2016 ISSUED BY THE TAHSILDAR KUNNATHUR.
EXHIBIT P3 A TRUE COPY OF THE ORDER OF ASSESSMENT DATED
3.5.2016.
EXHIBIT P4 A TRUE COPY OF THE PROCEEDINGS OF TAHSILDAR
KUNNATHUR DATED 4.5.2016.
EXHIBIT P5 A TRUE COPY OF THE RECEIPT DATED 21.7.2016.
EXHIBIT P6 A TRUE COPY OF THE PROCEEDINGS OF THE
REVENUE DIVISIONAL OFFICER DATED 21.10.2016.
EXHIBIT P7 A TRUE COPY OF THE PROCEEDINGS OF THE
DISTRICT COLLECTOR KOLLAM DATED 21.12.2017.
EXHIBIT P8 A TRUE COPY OF THE TAX RECEIPT ISSUED BY THE
KUNNATHUR GRAMA PANCHAYAT DT. 20.11.2017.
EXHIBIT P9 A TRUE COPY OF THE BILL ISSUED BY THE KERALA
ELECTRICITY BOARD FOR CONSUMER NO. 23801 IN
THE NAME OF THE PETITIONER.
EXHIBIT P10 A TRUE COPY OF THE RECEIPT ISSUED BY THE
KERALA ELECTRICITY BOARD FOR CONSUMER IN THE
NAME OF THE FATHER OF THE PETITIONER.
EXHIBIT P11 A TRUE COPY OF THE CERTIFICATE ISSUED BY THE
STATE BANK OF INDIA DATED 17.11.2017.
EXHIBIT P12 A TRUE COPY OF THE PHOTOGRAPH SHOWING THE
LIE AND NATURE OF THE BUILDING OF THE
PETITIONER.
