Partly allowed

Antony Joseph v. East Eleri Grama Panchayath

Kerala HC29 Sept 2016WP(C)/12435/2015

Case brief

AI extract

What is this about?

The Court adjudicated two writ petitions: one challenging excessive building tax enhancement and another against notices for unauthorized construction. It ruled that tax enhancement restrictions apply only to unaltered rooms, confirmed assessments for altered commercial portions, and dismissed the unauthorized construction petition, permitting proceedings while reserving a period for regularisatio

What did the court decide?

Tax assessment for altered commercial rooms (II-1044 to 1055) confirmed; Panchayath to issue fresh orders for other rooms. Notice on unauthorized construction dismissed with reservation for regularisa

Antony Joseph Vs East Eleri Grama Panchayath — Property and Title | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN

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THURSDAY, THE 29TH DAY OF SEPTEMBER 2016/7TH ASWINA, 1938

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WP(C).No. 12435 of 2015 (D)

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PETITIONER(S):

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ANTONY JOSEPH VELLIAPPALLIL HOUSE, PRAVITHANAM.P.O, PALA, KOTTAYAM DISTRICT

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BY ADV. SRI.P.BABU KUMAR

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RESPONDENT(S):

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1. EAST ELERI GRAMA PANCHAYATH ELERI.P.O, KASARAGOD-6. ITS REPRESENTED BY SECRETARY

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2. THE DIRECTOR OF PANCHAYATS, PANCHAYAT DIRECTORATE, THIRUVANANTHAPURAM-69

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3. STATE OF KERALA ITS REPRESENTED BY THE SECRETARY TO LOCAL SELF GOVERNMENT, SECRETARIAT, THIORUVANANTHAPURAM-695 001.

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R1 BY ADV. SRI.JAWAHAR JOSE

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R1 BY ADV. SRI.ARUN AJAY SHANKAR R BY GOVERNMENT PLEADER SRI. RENIL ANTO (SR.)

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 29-09-2016, ALONG WITH WPC. 30705/2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No. 12435 of 2015 (D)

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APPENDIX

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PETITIONER(S)' EXHIBITS

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----------------------P1-TRUE PHOTOCOPY OF THE BUILDING TAX PAID FOR THE YEAR 2012 DATED 28-02-2012.

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P2-TRUE PHOTOCOPY OF THE DEMAND NOTICE ISSUED TO THE PETITIONER DATED 15-12-2014 AND ITS ENGLISH TRANSLATION.

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P3-TRUE PHOTOCOPY OF THE OBJECTION SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT DATED 06-03-2015 AND ITS ENGLISH TRANSLATION.

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P4-TRUE PHOTOCOPY OF THE NOTICE ISSUED TO THE PETITIONER DTD. 23.4.15

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P5-TRUE PHOTOCOPY OF THE REPLY NOTICE ISSUED BY THE ADVOCATE OF THE PETITIONER DTD. 5.5.15

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P6-TRUE PHOTOCOPY OF THE NOTICE ISSUED FOR PERSONAL HEARING TO THE PETITIONER DTD.23.5.15

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**P4-TRUE PHOTOCOPY OF THE G.O(MS) NO.144/2015 DTD. 27.4.15 (PRODUCED ALONG WITH I.A NO.13914-16)

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RESPONDENT(S)' EXHIBITS

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EXT.R(1)(A) COPY OF THE GOVT. ORDER DTD. 14.1.11

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EXT.R(1)(B) COPY OF THE RESOLUTION PASSED BY THE 1ST RESPONDENT PANCHAYATH DTD.23.9.11

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EXT.R(1)(C) COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT PANCHAYATH DTD. 17.10.11

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EXT.R(1)(D) COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT PANCHAYATH DTD. 12.12.11

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EXT.R(1)(E) COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT PANCHAYATH DTD. 11.1.12

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EXT.R(1)(F) COPY OF THE CHART PREPARED BY THE 1ST RESPONDENT PANCHAYATH SHOWING THE DETAILS OF BUILDINGS OWNED BY THE PETITIONER.

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EXT.R(1)(G) COPY OF “STATEMENT OF ACCOUNTS” PREPARED BY THE PANCHAYATH SHOWING THE NATURE OF EACH SHOP ROOM AND RATE OF TAX WITH RESPECT TO EACH SHOP ROOM OWNED BY THE PETITIONER.

// TRUE COPY //

P.A TO JUDGE

K. VINOD CHANDRAN, J

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=====================

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W.P(C) Nos.12435 of 2015 and 30705 of 2015

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============================

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Dated this the 29^th day of September, 2016

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J U D G M E N T

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Both the writ petitions are concerned with a building owned by the identical petitioner; one against the tax assessment made and the other against the proceedings

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initiated for unauthorised construction.

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W.P.(C)No. 12435 of 2015 challenge the demand

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notice issued at Ext.P2 series, enhancing the building tax due, for the building numbers allotted to the petitioner from 1020 to 1035. The contention taken is that the enhancement is very excessive coming to around 750% of the tax till then paid and hence the same is in violation of the Kerala Panchayath Raj

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Act, 1994 (for brevity 'the Panchayath Raj Act) and Kerala Panchayath Raj (Property tax, Service Tax and Surcharge)

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WPC.Nos.12435/2015 & 30705/2015 : 2 :

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Rules, 2011 (for brevity 'Rules 2011).

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W.P.(C) No.30705 of 2015 is filed against notices

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issued by the Panchayath produced as Exts.P1 to P3, wherein unauthorised constructions were alleged, which specifically was with respect to a floor built in addition to the existing building having Ground Floor + 2 floors ie: a third floor (wrongly shown as 4^th floor in the notice) and the conversion of user of the 2^nd floor in ground + 2 (again mistakenly referred to as 3^rd floor).

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W.P.(C) No.12435 of 2015 is first taken up. The petitioner admittedly was the owner of a building having three floors, (GF+2). The ground floor was categorised as commercial and the first floor was partly commercial and partly residential and the second floor was also categorised as residential. The residential categorisation was for reason of the same being used as residential apartments. Though the petitioner challenged the demand with respect to building numbers 1020 to 1035, the learned Counsel for the respondent Panchayath submits that in fact the demand was

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WPC.Nos.12435/2015 & 30705/2015 : 3 :

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raised for buildings from rooms/apartments bearing separate building numbers: II/1003 to II/1055. The revision is as evident from Ext.R1(f). The question argued is as to whether the enhancement beyond 150% as provided in the Rules of 2011 is sustainable.

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The Panchayath, in its counter affidavit has elaborately dealt with the manner in which the enhancement was arrived at in accordance with Section 203 of the Panchayath Raj Act. Section 203(3) of the Act empowers the Panchayath to fix the property tax subject to the limits fixed by the Government under sub-section (2)(a). The Government has issued notification produced at Ext.R1(a), wherein the maximum and minimum rates per sq.ft. is specified. In the present case, since enhancement challenged is on the basis of the tax assessed for residential buildings, the learned Counsel points out from Ext.R1(a) that the minimum rate is Rs.3/- and maximum is Rs.8/-. The Panchayath has decided to fix the rate at Rs.4/- per sq.ft. based on the importance of the locality and on an assessment of the factors as provided in Rules 5 to 9 of

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WPC.Nos.12435/2015 & 30705/2015 : 4 :

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the Rules of 2011. The decision of the Panchayath is produced

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at Ext.R1(b). A notification was issued as per Ext.R1(c), informing the public about the re-determination of the building tax and the same was also notified in the vernacular news papers calling for objections. Considering the objections received, the Panchayath had issued final notification as per Ext.R1(d) and R1(e). Based on which, the petitioner was also issued with the fresh assessment with respect to the building in which the rooms and apartments were separately numbered.

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The petitioner contends that this is against Rule 9(3)(4d) of the Rules of 2011, which stipulates that the

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enhancement at any point cannot be in excess of 150% of the existing rate. The learned Counsel for the petitioner also points out G.O(MS) No.144/2015/LSGD dated 27.04.2015 where the Government has further reduced such enhancement to 100% of the existing rate. However, it is not clear as to whether restrictions so made has been incorporated in the Rules. The learned counsel for the petitioner has not been

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WPC.Nos.12435/2015 & 30705/2015 : 5 :

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able to point out to me any amendment having been made to

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the Rules. In the nature of the orders passed, if any amendment has been made then the petitioner would be entitled to produce the same before the Panchayath which would take into account the restriction so made.

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Sub Rule 4 (d) of the Rules of 2011 with the proviso is

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extracted hereunder ::

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4(Áß) Äù ÕßØñàVHJßæa ¥¿ßØíÅÞÈJßW ÕÃß¼cÞÕÖcJßÈáUÄá¢ ÈßÜÕßÜáUÄáÎÞÏ ²øá æµGß¿Jßæa ÕÞV×ßµ ÕØñá ÈßµáÄß ¦ÆcÎÞÏß ÈßÖíºÏßAáçOÞZ æÄÞGí ÎáOí ÈßÜÕßÜáIÞÏßøáK ÕÞV×ßµ ÕØñá ÈßµáÄßÏßW ÕViÈÕí ©IÞµáKáæÕCßW ¥dÉµÞøÎáU ÕViÈÕí ÈßÜÕßÜáIÞÏßøáK ÕÞV×ßµ ÕØñá ÈßµáÄßÏáæ¿ ÈâxßÏXÉÄí ÖÄÎÞÈJßW ¥ÇßµøßAÞX ÉÞ¿ßÜïÞJÄá¢ ¨ ÉøßÇßAí

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®KÞW, ¯xÕá¢ ²¿áÕßW È¿JßÏ ÕÞV×ßµ ÕØñá ÈßµáÄß ÈßVHÏJßçÈÞ, ÉáÈV ÈßVHÏJßçÈÞ çÖ×¢ dÉØñáÄ æµGß¿JßÈí ®æLCßÜá¢ µâGßçºVAçÜÞ, ¸¿ÈÞÉøÎÞÏ æÎºîæM¿áJÜáµç{Þ, ©ÉçÏÞ·dµÎJßW ®æLCßÜá¢ ÎÞxçÎÞ ÕøáJßÏßGáæICßW çÎWMùE ©ÉºGB{ßW dÉÄßÉÞÆßºîßGáU ÉøßÇßµZ

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WPC.Nos.12435/2015 & 30705/2015 : 6 :

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ÌÞÇµÎÞµáKÄÜï.

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The Rule provides that the enhancement can

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only be to the extend of 150% of the existing rate (subject to any amendment as noticed above). However, the proviso specifically speaks of any additional construction or structural change or conversion of user, made to the existing building in which event the restriction would not be available to that building. Hence if any structural change, addition or change of user is brought about to a building, then the restriction would not be applicable and the stipulation as in the notification at Ext.R1(d) and the rate fixed by the Panchayath would be applicable.

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The Panchayath has brought in revision in accordance with Ext.R1(d) Circular and the final notification issued by the Panchayath is produced as Ext.R1(d) and (e). This has been done, in accordance with the notification brought out by the Government as empowered under Rule 203 (2)(a) of the Panchayath Raj Act and complying with the procedure mandated. The Rules are amended subsequent to the

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WPC.Nos.12435/2015 & 30705/2015 : 7 :

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notification to the effect of restricting any enhancement to 150% of the existing rates. A harmonious construction would commend that if the minimum rate fixed as per the notification brought out by the Government as per Section 203(2)(a) is more than 150% or if that stipulated by the Panchayath so exceeds the existing rate; then the enhancement would have to be restricted to the limit prescribed under sub-rule 9(3)(4d) of the Rules.

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Admittedly the alterations made is to part of the 1^st floor and the 2^nd floor and an addition of the 3^rd floor. The learned Counsel appearing for the Panchayat would contend that; then the revised rates brought in by the Panjayath would be applicable for all the rooms in the building, without any restriction as per Rule 9(3)(4d). The argument is advanced on the premise that the proviso speaks of a building in which an addition, structural change or conversion of user is made and the restriction would be inapplicable even to such other space in the building where no such conversion has been effected. This Court is unable to accept the said contention since the

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WPC.Nos.12435/2015 & 30705/2015 : 8 :

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proviso, making inapplicable the restriction where some change has been made, is only on account of a value addition having been created by the addition, structural change or conversion of user. The commercial space numbered separately in the ground floor and in part of the 1^st floor have not been altered or converted and the utility of such rooms remain as such despite the structural change, addition and the conversion of user made in the other parts of the building; which also have been separately numbered by the Panchayat. Hence to such rooms in which there is no value addition, the restriction under Rule 9(3)(4d) squarely applies.

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With respect to the petitioners building, admittedly, the ground floor and part of the first floor are categorized as commercial buildings and tax is accepted at the rate applicable for commercial buildings. With respect to the commercial spaces so categorized by the Panchayath the assessment of tax can only be in accordance with Rule 9(3) (4d). The Panchayath would issue fresh orders on the basis of the declaration made herein after hearing the petitioner.

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WPC.Nos.12435/2015 & 30705/2015 : 9 :

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With respect to the portion of the first floor and

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the second floor wherein there has been change of user as also structural alteration converting the residential apartments into a commercial space and using it as an air conditioned auditorium, restrictions under Rule 9(3)(4d) would not be applicable ie: for building numbers II-1044 to II-1055; by virtue of the proviso. The assessment now made on the said building numbers would stand confirmed. The petitioner has also made such alterations allegedly without authorisation which would be dealt with in the other writ petition. In that context the Panchayath would also be enabled to proceed for any penal assessment of building tax as provided under the respective Rules.

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WP(C) No.12435/2015 is disposed of with the above declarations and directions. The Panchayath shall issue notice to the petitioner and assess the building tax of those in which Rule 9(3)4d) is applicable and issue fresh orders, based on which the payment shall be effected by the petitioner. The payment already effected on the basis of the interim order

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WPC.Nos.12435/2015 & 30705/2015 : 10 :

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would be given due adjustment before a demand is issued. The demand confirmed for the other rooms shall be paid within a month.

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W.P(C) No.30705/2015 is with respect to the unauthorized conversion of user of a portion of first floor; from commercial to residential and the conversion of the entire 2^nd floor as an A/c auditorium (commercial). The notices impugned alleged conversion of the user of part of the first floor from residential to commercial and the entire second floor as commercial after making structural alterations and also the unauthorized construction made on the third floor.

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The learned Counsel for the petitioner has a contention that the unauthorized construction made on the third floor is only a truss work to protect the building from sun and rain. The further contention is that the Deputy Director of Panchayath as per Ext.P5, has specifically noticed that the truss work is only for the protection of the building from sun and rain and that there is enmity existing between the Panchayath President and the petitioner as also a proceeding pending

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WPC.Nos.12435/2015 & 30705/2015 : 11 :

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with respect to revision of tax before the High Court for reason of all of which the action taken by the Panchayath was asserted to be improper.

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At the outset it is to be noticed that the report said to have been submitted by the Panchayath Deputy Director as per Ext.P5 is totally without jurisdiction. No conferment of power is discernible on the Deputy Director of Panchayaths to proffer a report in the nature of Ext.P5. The Panchayath acting under the statute and the rules framed there under would not be fettered and cannot be influenced by such reports. The report is also on a complaint submitted by the petitioner to the Minister and forwarded to the Panchayath Deputy Director for action and report. The attempt of the petitioner to bypass the statutory remedies cannot be accepted by this Court. It is not clear as to how the Deputy Director of Panchayaths has come to a conclusion that enmity exists between the Panchayath President and the petitioner. The existence of a litigation with respect to the tax liability is also irrelevant to the subject issue. Further there is

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WPC.Nos.12435/2015 & 30705/2015 : 12 :

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no inspection conducted with notice to the Panchayath and even the factual statements made in the report as to the existence of a truss work, for mere safety of the building from sun and rain is unsubstantiated and is clearly countered by the Panchayath in its counter affidavit with photographs taken on inspection of the property; which is not denied by the petitioner.

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The counter affidavit of the Panchayath speaks of an inspection having been conducted by the Clerk attached to the Panchayath, who is entrusted with the duty of field enquiry, and a report having been filed at Ext.R1(c). The report specifically pointed out the conversion of user and the structural alteration made to a portion of the first floor and second floor as also the unauthorized construction made on the third floor. The same is found to be in violation of the completion certificate submitted by the petitioner before the Panchayath as is evidenced from Ext.R1(a) . The specific contention of the Secretary in his affidavit is that on Ext.R1(c) report being filed, the Secretary personally conducted an

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WPC.Nos.12435/2015 & 30705/2015 : 13 :

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inspection and photographs were taken as revealed at Ext.R1 (d) to R1(f); which indicates that even on the third floor, tables were laid with chairs, to serve food, in connection with the function held at the air-conditioned auditorium on the 2^nd floor. The submission of the petitioner that the truss work was only intended at providing safety from sun and rain has to be rejected.

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It is also submitted by the Panchayath on affidavit that, on notices being issued, the petitioner had appeared before the Panchayath and had also filed objections and authorised a person to argue the matter before the Secretary who had even filed argument notes in the proceeding. It is later that the petitioner approached this Court producing Ext.P5 contending that the proceedings are malafide. This Court does not find any malafides vitiating the proceedings initiated by the Panchayath and it has to be emphasised that there is also no person impleaded in a personal capacity in which event alone an allegation of malafides can be pinned down and adjudicated upon.

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WPC.Nos.12435/2015 & 30705/2015 : 14 :

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Ext. P5 has already been held to be inconsequential insofar as the proceeding initiated by the Panchayat against the petitioner. The proceedings are justified in the context of the unauthorised construction,structural alteration and change of use made to the building owned by the petitioner.

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The further contention taken by the petitioner is

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based on the counter affidavit of the Panchayath and the entitlement of the petitioner to file an application for regularisation which he claims, has been filed as is seen from Ext.P9. The said contention is refuted by the Panchayath firstly on the ground that Ext.P9 is an application made on white paper and the regularisation application would have to be made in the proper format as provided in the Rules with the sketch of the building and the alterations made. Further it is submitted by the Panchayat, as has been averred in the additional affidavit dated 04.07.2016 that there could be no regularisation made since the construction of the third floor would require more parking space as per the Kerala Panchayath Building Rules, 2011 which as of now, the

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WPC.Nos.12435/2015 & 30705/2015 : 15 :

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petitioner does not have space to provide for in the existing land owned and possessed by the petitioner. The learned Counsel for the petitioner would then submit that the petitioner would examine the possibility of providing such area and file a proper regularisation application. If such a regularisation application is made then, of course, the Panchayath would consider the same in accordance with law, and in accordance with the provisions of the Kerala Panchayath Building Rules, 2011.

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With the above observations, W.P(C)

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No.30705/2015 would stand dismissed permitting the Panchayath to continue the proceedings impugned herein and the petitioner to co-operate in such proceedings subject to the reservation made of a regularisation application to be made within a period of one month from today. If such an application is filed then the Panchayath would first consider that application and then proceed with the proceedings which has been taken up and challenged in W.P(C) No.30705/2015.

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WPC.Nos.12435/2015 & 30705/2015

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: 16 :

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Ordered accordingly leaving the parties to suffer

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their respective costs

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Sd/-

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(K. VINOD CHANDRAN, JUDGE)