Partly allowed

Santhosh P Antony v. the State of Kerala

Kerala HC9 Jun 2016WP(C)/4361/2011

Case brief

AI extract

What is this about?

The court quashed the building tax assessment order and related notices for failing to distinguish between pre and post 1992 constructions. It directed the authorities to address the petitioner for a fresh assessment considering only constructions after the statutory cut-off date, affecting subsequent Cess levies.

What did the court decide?

Quashed impugned assessment orders and notices; directed authorities to pass fresh assessments after hearing, considering only post-1992 constructions within four months.

Santhosh P Antony Vs the State of Kerala — 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 A.K.JAYASANKARAN NAMBIAR

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THURSDAY, THE 9TH DAY OF JUNE 2016/19TH JYAISHTA, 1938

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WP(C).NO. 4361 OF 2011 (U)

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PETITIONER(S):

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SANTHOSH P ANTONY, AGED 43 YEARS, S/O.P.V.ANTONY, RESIDING AT POOVELIKUNNEL HOUSE,, KORATTY P.O., CHELAPPADY KARA, KOOVAPALLY VILLAGE,, KANJIRAPALLY TALUK, KOTTAYAM DISTRICT., (PROPRIETOR, HOTEL HIMARANI INTERNATIONAL,, PEERMEDU).

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BY ADVS.SRI.JOICE GEORGE

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SRI.LIJI.J.VADAKEDOM

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RESPONDENT(S):

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THE STATE OF KERALA REPRESENTED BY THE CHIEF SECRETARY TO GOVERNMENT, GOVERNMENT, SECRETRIAT,THIRUVANANTHAPURAM-01.

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THE TAHSILDAR, TALUK OFFICE, PEERMADE P.O., IDUKKI DISTRICT-685 531.

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THE VILLAGE OFFICER, VILLAGE OFFICE, MANJIMALA, PEERMADE P.O., IDUKKI DISTRICT.

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THE KERALA STATE FINANCIAL CORPORATION, REPRESENTED BY THE MANAGING DIRECTOR,, THIRUVANANANTHAPURAM-01.

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R4 BY ADV. SRI.M.M.SAYED MUHAMMED, SC, KFC

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R1-3 BY ADV. GOVERNMENT PLEADER SRI.ALOYSIUS THOMAS R4 BY ADV. SRI.T.V.GEORGE, SC, KFC

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09-06-2016 ALONG WITH WP(C).NO.6316/2011 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).NO. 4361 OF 2011 (U)

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APPENDIX

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PETITIONER'S EXHIBITS:

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EXT.P1: TRUE COPY OF THE SALE DEED NO.164/02 DATED 24.01.2002 OF THE PEERMADE SRO EXECUTED BY THE 4TH RESPONDENT IN FAVOUR OF THE PETITIONER.

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EXT.P2: TRUE COPY OF THE CERTIFICATE DATED 4.12.2009 ISSUED BY THE SECRETARY OF THE PEERMADE GRAMA PANCHAYAT

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EXT.P3: TRUE COPY OF THE COMMUNICATION NO:A-1228/07 DATED 19.08.2010

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EXT.P4:TRUE COPY OF THE ASSESSMENT ORDER DATED 19.09.09 ISSUED BY THE 2ND RESPONDENT

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EXT.P5:TRUE COPY OF THE REPRESENTATION DATED 14.10.10 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT

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EXT.P6: TRUE COPY OF THE DEMAND NOTICE DATED 13.01.2011 UNDER SECTION 7 F THE REVENUE RECOVERY ACT ISSUED BY THE 2ND RESPONDENT

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RESPONDENTS' EXHIBITS: NIL

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//TRUE COPY//

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P A TO JUDGE

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A.K.JAYASANKARAN NAMBIAR, J. ------------------------------W.P.(C).NO.4361 OF 2011 & W.P.(C).NO.6316 OF 2011

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----------------------------------Dated this the 9^th day of June, 2016

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J U D G M E N T

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Since both these writ petitions deal with related issues, they are taken up together for consideration and disposed by this common judgment. For the sake of convenience, the reference to facts and exhibits is from W.P.(C).No.4361/2011.

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The petitioner is the owner in possession of a building bearing No.PP-III/329 of Peermade Grama Panchayath wherein he is conducting a hotel by name “Himarani International”. The petitioner purchased the said building from the 4^th respondent by Ext.P1 deed dated 24.01.2002. It would appear that the 4^th respondent had in turn taken over the property, comprising of 92 cents together with a building thereon, from one Valsa Tony, who was the erstwhile owner of the property, on 04.12.1990. The 4^th respondent had taken over the said property pursuant to a default committed by the said Valsa Tony, who had mortgaged the property with the 4^th respondent as collateral security for a loan availed from the said respondent. In the writ petition, the petitioner is aggrieved by Exts.P3 and P4 notice and assessment order respectively issued to the petitioner under the Kerala

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W.P.(C).NO.4361 OF 2011 &

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W.P.(C).NO.6316 OF 2011

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Building Tax Act, 1975, demanding building tax in respect of the building owned by the petitioner and covering a plinth area of 1779.61 sq.metres. The petitioner was assessed to an amount of Rs.2,91,600/- by way of building tax in Ext.P4 order. The case of the petitioner is essentially that, inasmuch as there was admittedly a building in the property prior to 10.02.1992, which is the cut-off date specified for the changed basis of assessment on plinth area basis under the Building Tax Act, the petitioner could be subjected to a levy of building tax only for the constructions, if any, that were effected by him after the aforesaid cut-off date.

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A statement has been filed on behalf of the 2^nd respondent wherein it is stated that the assessment of the petitioners building to building tax was done under the circumstances where the petitioner had not responded to the notices served on him and had not produced any material to show that there was a building in the property prior to the cut-off date referred above, and further, he had not produced material to show the extent of construction that had been effected subsequent to the said cut-off date. According to the respondents, the present building was constructed in its

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W.P.(C).NO.4361 OF 2011 &

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W.P.(C).NO.6316 OF 2011

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entirety by the petitioner, and it is therefore that he was subjected to assessment on the entire plinth area of the building. A counter affidavit has also been filed on behalf of the 4^th respondent which narrates the sequence of events under which the building was sold to the petitioner. The averment in the writ petition to the effect that, for the liability in respect of the building prior to 1992 it would be the 4^th respondent, who will be responsible, is vehemently disputed in the counter affidavit.

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In W.P.(C).No.6316 of 2011, the petitioner impugns Exts.P3 and P4 notice and assessment order issued by the 3^rd respondent therein, under the Building and Other Construction Workers Welfare Cess Act, 1996. By Ext.P4 assessment order, the petitioner has been subjected to a levy of Rs.1,56,606/- under the aforementioned Cess Act by fixing the total cost of construction at Rs.1,56,60,568/-. The said assessment order proceeds on the assumption that the total plinth area of the building is in an extent of 1779.61 sq.metres which figure was the figure available with the Taluk authority under whom the petitioner was subjected to the levy of building tax. The contention of the petitioner in the writ

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W.P.(C).NO.4361 OF 2011 &

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W.P.(C).NO.6316 OF 2011

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petition is essentially that, inasmuch as the total plinth area adopted for the purposes of levy of Cess under the Cess Act is based on the assessment done under the Kerala Building Tax Act in so far as it relates to the plinth area of the building adopted by the respondents, the erroneous finding of the plinth area in the building tax assessment would entail a consequential error in the computation of Cess under the Cess Act.

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In a counter affidavit filed by the 1^st respondent in this writ petition the averments in the writ petition are disputed. It is pointed out that despite a notice having been issued to the petitioner, the petitioner had not responded with appropriate details and it is under those circumstances, that the respondent was constrained to pass a final order levying Cess on the petitioner on best judgment basis. It is in particular pointed out that the petitioner had not produced any document to show that the building in question was constructed by him prior to 03.11.1995, which is the date on which the Building and Other Construction Workers Welfare Cess Act came into force.

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¶51

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W.P.(C).NO.6316 OF 2011

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W.P.(C).NO.4361 OF 2011

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I have heard the learned counsel appearing for the petitioner in both these writ petitions, the learned Standing counsel for the Kerala State Financial Corporation in both these writ petitions, the learned Government Pleader appearing for the official respondents in both the writ petitions and the learned Standing counsel for the 1^st respondent in W.P.(C).No.6316 of 2011.

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On a consideration of the facts and circumstances of the case and the submissions made across the bar, I find from Exts.P4 and P5 assessment order and notice that are impugned in the W.P. (C).No.4361 of 2011 that the assessment of the petitioner's building to building tax under the Kerala Building Tax Act , proceeds on the assumption that there was no building in the property purchased by the petitioner from the 4^th respondent in the year 2002. A perusal of Ext.P1 sale deed however would indicate that the 4^th respondent had taken over the property in question in the year 1990, and at the time of take over there was a building situated in the said property. As rightly pointed out by the learned counsel for the petitioner, since the cut-off date for the changed

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W.P.(C).NO.4361 OF 2011 &

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W.P.(C).NO.6316 OF 2011

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basis of assessment under the Kerala Building Tax Act, from the capital value method to the plinth area based assessment, is 10.02.1992 and there was admittedly a building in the property on 04.12.1990 which is the date on which the 4^th respondent took over the property from its defaulter, the assessment to building tax done on the petitioners building in the year 2009 could only have been on any additional construction to the building that was effected after the cut-off date of 10.02.1992. I note from Ext.P4 assessment order that the entire plinth area of the building namely 1779.61 sq.metres has been assessed by the respondents for the purposes of the Kerala Building Tax Act. Such an assessment, would fall foul of the provisions of Section 5(3) of the Kerala Building Tax Act especially when there is evidence to indicate that there was a building in the property prior to the cut-off date. In my view, it was incumbent upon the respondents under the Kerala Building Tax Act to enquire into the plinth area of the building that existed prior to 10.02.1992 and the extent of construction, if any, that was effected after the said cut-off date, before proceeding to finalise an assessment under the Kerala Building Tax Act on the petitioner. Inasmuch as the said exercise is not seen done in Ext.P4

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W.P.(C).NO.4361 OF 2011 &

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W.P.(C).NO.6316 OF 2011

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assessment order, I quash Ext.P4 assessment order and consequently Exts.P3 and P6 notices issued to the petitioner in connection with recovery of the amounts assessed. The 2^nd respondent in W.P(C).NO.4361 of 2011 is directed to pass a fresh order of assessment under the Kerala Building Tax Act in relation to the building owned by the petitioner, after taking note of the observations in this judgment, and after ascertaining the extent of construction, if any attributable to the period subsequent to 10.02.1992, in the building in question. Needless to say, prior to passing fresh orders as directed, the 2^nd respondent shall also afford the petitioner an opportunity of being heard. The 2^nd respondent shall pass fresh orders as directed within a period of four months from the date of receipt of a copy of this judgment.

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As regards W.P.(C).No.6316 of 2011, inasmuch as the order impugned therein namely, Ext.P4 order issued by the 3^rd respondent, is based on a determination of plinth area under the building tax assessment referred above, I am of the view that, the said order to the extent it contemplates the levy of Cess, based on the aforementioned plinth area cannot be legally sustained. I,

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W.P.(C).NO.4361 OF 2011 & W.P.(C).NO.6316 OF 2011 8

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therefore, quash Ext.P3 notice and P4 assessment order and direct the 3^rd respondent Assessing Officer under the Construction Workers Welfare Cess Act, 1996, to complete the assessment of the petitioner to Cess under the said Act, only after the completion of the assessment proceedings under the Kerala Building Tax Act and a determination of the plinth area that can be subjected to assessment under the said Act by the said authority. While passing orders as directed, the 3^rd respondent shall also afford an opportunity of hearing to the petitioner.

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The writ petitions are disposed as above.

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Sd/- A.K.JAYASANKARAN NAMBIAR JUDGE

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mns/9/6/16

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W.P.(C).NO.4361 OF 2011 &

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W.P.(C).NO.6316 OF 2011 9

Santhosh P Antony v. the State of Kerala

Case brief

What is this about?

What did the court decide?

Santhosh P Antony v. the State of Kerala

Case brief

What is this about?

What did the court decide?

What the court decided

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