Dismissed

Aswirathul Musthaqeem Sangham v. the State of Kerala

Kerala HC19 Dec 2018WA/384/2018

Case brief

AI extract

What is this about?

Reference answered in a building tax case: an assessee cannot raise a claim for exemption under Section 3(1)(b) before the assessing authority after the assessment is finalised, as that authority is functus officio. Such a claim may be raised in a statutory appeal under Section 11, which the appellate authority must refer to the Government.

What the court decided

AI extract

Aswirathul Musthaqeem Sangham Vs the State of Kerala — Writ and Judicial Review | Kerala HC (2018)

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[ CASE REPORTABLE]

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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 P.R.RAMACHANDRA MENON,

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THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN

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THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN

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WEDNESDAY, THE 19TH DAY OF DECEMBER 2018/28TH AGRAHAYANA, 1940

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WA.No. 384 of 2018 IN WPC. 3634/2018 AGAINST THE JUDGMENT IN WP(C) 3634/2018 of HIGH COURT OF KERALA DATED 05-02-2018

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APPELLANT/PETITIONER:-

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ASWIRATHUL MUSTHAQEEM SANGHAM, PENGATTU KUNDU, THOTTASSERYARA, KANNAMANGALAM P.O., MALAPPURAM REPRESENTED BY IT'S GENERAL SECRETARY SAITHALAVI SAKHAFI PONNETH, AGED 40 YEARS, S/O.USMAN, PULIYATTUKULAM, KODUR P.O.,MALAPPURAM.

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BY ADV.SRI.ABRAHAM JOHN

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RESPONDENTS/RESPONDENTS:-:

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1. THE STATE OF KERALA REPRESENTED BY THE SECRETARY,

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DEPARTMENT OF REVENUE,

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THIRUVANANTHAPURAM - 695 001.

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2. THE TEHSILDAR, TIRURANGADI, MALAPPURAM - 676 101.

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BY SENIOR GOVERNMENT PLEADER SRI. MUHAMMED RAFIQ

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THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 22.10.2018, THE COURT ON 19.12.2018 DELIVERED THE FOLLOWING:

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JUDGMENT

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Ramachandra Menon , J.

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Whether a claim for exemption could be made in terms of Section 3(1)(b) of the Kerala Building Tax Act, 1975 [hereinafter referred to as the 'Act'], after finalization of the assessment, is the question referred for consideration. The verdict passed by a learned Judge of this Court in Mother Superior, Congregation of Sisters of Charity Vs. Tahsildar, Mananthawady [1987 (1) KLT 841 = 1987 KHC 244] and the unreported judgment dated 20.01.2016 passed by a Division Bench in W.A. No. 106 of 2016, whereby the former judgment was approved, are doubted and hence the reference.

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Though the question mooted can be considered directly, we think it appropriate to make a reference to the factual matrix as well, as the Division Bench, while making the reference, has made some observations

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as to the 'identical factual situation' involved in

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some of the cases mentioned therein, to have an effective appreciation and analysis of the relevant provisions of law.

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We heard Mr. Abraham John, the learned counsel appearing for the appellant and Mr. Mohammed Rafeeq, the learned senior Government Pleader, who entered appearance on behalf of the respondents accordingly.

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The appellant/writ petitioner is an entity

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registered under the relevant provisions of the Societies Registration Act 1860, which is stated to be

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an institution established for religious and

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educational development of Muslim community and registered as a religious, charitable and educational

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society. The building in question, having a plinth area of about 2478.22 sq.m., was constructed by the

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appellant society. However, no return was ever filed in terms of Section 7 of the Act and in the said

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circumstances, the second respondent issued notice under Section 7(3) of the Act, proposing to levy the

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one time tax. Admittedly, it was not responded from

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the part of the appellant/writ petitioner. Met with the situation, the second respondent proceeded with further steps and the assessment was finalized in conformity with Section 9(5) of the Act, passing Ext.P3 assessment order dated 21.12.2017 and fixing tax liability as Rs.8,35,200/-. A demand notice was served through the Village Officer, on 10.01.2018, in this regard.

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On getting the assessment order and demand notice, the appellant/writ petitioner woke up from the slumber, who preferred Ext.P4 representation dated 15.01.2018 [styled as a 'reply' in the writ petition] before the second respondent, claiming that the building of the society was principally and exclusively intended to be used for imparting religious, charitable and educational development of the community and hence was eligible for tax exemption under Section 3(1)(b) of the Act. This was replied by the second respondent vide Ext. P5 dated the same day,

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pointing out that the said authority was not having

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any power to review the assessment order and as such,

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the grievance could be pursued by filing statutory

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appeal in Form No.10 before the appellate authority/Revenue Divisional Officer, after remitting the first installment [out of the four quarterly installments provided as per relevant Rule] within the specified time. Instead of pursuing the remedy as above [putting forth the claim for exemption before the competent authority to deal with the matter], the appellant/writ petitioner approached this Court directly, by filing W.P.(C) No. 3634 of 2018, challenging Ext. P3 assessment order and seeking to direct the first respondent/State to grant exemption

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under Section 3(1)(b) of the Act, after making an enquiry into the principal use of the building, with

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reference to its memorandum of association, the byelaw and the activities being carried out by the writ petitioner.

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When the matter came up for admission, the

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learned single Judge observed that, Ext.P3 order under challenge in the writ petition was appealable under Section 11 of the Act and in view of the said alternate remedy, the writ petition was dismissed as per the judgment dated 05.02.2018, without prejudice to the right of the writ petitioner to challenge Ext.P3 order as aforesaid. This is under challenge in this appeal, contending that interference under

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Article 226 of the Constitution of India is not at all barred; that the question of exemption, once raised, can be considered only by the Government - as held by the Full Bench of this Court in St. Alphonsa Hospital

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& others Vs. State of Kerala [2015 (1) KLT 815] and further that, if at all any appeal is to be filed, it could only be after satisfying the tax demanded and hence appeal under Section 11 of the Act cannot be considered as an equal or efficacious alternate remedy.

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To have a clear idea and understanding as to the scope of the provision, it will be worthwhile to

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have Section 3 extracted below :

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“3. Exemptions ― (1) Nothing in this Act shall apply to ―

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(a) buildings owned by the Government of Kerala or the Government of India or any local authority; and

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(b) buildings used principally for religious, charitable or educational purposes or as factories or workshop [or cattle/pig/poultry farms or poly houses].

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Explanation I ― For the purposes of this subsection, “charitable purpose” includes relief of the poor and free medical relief.

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Explanation II - For the purpose of this subsection, -

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(i) “Cattle/pig/poultry/farms” shall have the same meaning as assigned to them in Clause (d) (m) and (n) respectively in Rule 2 of the Kerala Panchayat Raj [Licensing of Livestock farms] Rules, 2012, but shall not include the farms exclusively used for the purpose of sale.

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(ii) Cattle/pig/poultry farms shall have the minimum number of animals or birds as the case may be, as provided in sub-rule (1) of Rule 3 of the said Rules.

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Explanation III - ”poly house” means any building erected for cultivation purposes under controlled climatic conditions;

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(2) If any question arises as to whether a

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building falls under sub-section (1) or under section 3A, it shall be referred to the Government and the Government shall decide the question after giving the interested parties an opportunity to present their case.

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(3) A decision of the Government under sub-section

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(2) shall be final and shall not be called in question in any court of law.”

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Going by the terminology used under Section 3(2) of

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the Act, it is clear that the provision does not mention as to when a claim for exemption is to be raised, but for stipulating that, if any question

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arises in this regard, it shall be referred to the Government and the Government shall decide the

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question, after giving an opportunity of hearing to the interested parties. As it stands so, the main points to be considered are, when can the question arise; before whom the question arises and whose duty

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is it, to have it referred to the Government.

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The Statute casts a duty upon the assesee to

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file return, as envisaged under Section 7 of the Act. In fact, on completion of the construction of the

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building or when the major repair or improvement is

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made on or after the appointed day, the owner of the building shall file return before the assessing authority, in the prescribed format, within the prescribed period, along with a copy of the plan approved by the local authority or such other authorities as specified in this behalf, containing all the relevant particulars. As pointed out by the learned senior Government Pleader, after the amendment

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of the Statute [brought into effect w.e.f. 10.02.1992], the form of return specifically contains a clause/provision to point out whether any 'exemption' is claimed in respect of the building in question. This is to facilitate 'reference' of the claim, if any to the Government, in terms of Section 3(2) of the Act, before proceeding with the

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assessment. Even if no such return is filed, it is

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quite open for the assessing authority to serve a notice under Section 7(3) of the Act to the owner of the building to furnish return. Admittedly, since no

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return was ever filed by the appellant/owner of the

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building, further steps were pursued by the second respondent/assessing authority issuing notice, proposing assessment, which was left unattended. It was in the said circumstances, that the assessment was finalized after completing the procedural formalities by the second respondent, passing Ext. P3 order under Section 9 of the Act. It was admittedly served to the

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appellant/assessee, along with the demand notice, in terms of Section 10 of the Act.

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Once the assessment is finalized by the

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assessing authority as above, the said authority becomes “functus officio”. In other words, no further proceedings could be stated as pending before the assessing authority, to keep the matter alive or to be dealt with in such other manner. However, power is

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vested with him for rectification of mistakes in terms of Section 15. The said provision is reproduced below:

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“15. Rectification of mistakes.― (1) The appellate authority or the revisional authority may, at any time within three years

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from the date of an order passed by it on appeal or revision, as the case may be, and the assessing authority may, at any time within three years from the date of any assessment or order passed by it, or its own motion, rectify any mistake apparent from the record of the appeal, revision, assessment or order, as the case may be, and shall, within the like period, rectify any such mistake which has been brought to its notice by an assessee:

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Provided that no such rectification shall be made which has the effect of enhancing an assessment or reducing a refund unless the assessee has been given a reasonable opportunity of being heard in the matter.

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(2) Where any such rectification has the effect of reducing the assessment, the assessing authority shall make any refund which may be due to such assessee.

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(3) Where any such rectification has the effect of enhancing the assessment or reducing a refund, the assessing authority, shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable; and such notice of demand shall be deemed to be issued under section 10 and the provisions of this Act shall apply accordingly..”

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Even a plain reading of the above provision,

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makes it clear that the said power can be exercised only if there is a mistake/error apparent from the

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records. As noted by a Division Bench of this Court

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in Kurian George Vs. Tahsildar [1995 (2) KLT 457], normally the following mistakes are considered to be the mistake apparent from the record;

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(a) Arithmetical error

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(b) Clerical error

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(d) If the later enactment having retrospective operation enables an authority

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to modify or alter the original assessment order; and

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(e) where in the earlier assessment order no valid principle of law was applied.

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It can also be said that the authority has no jurisdiction to rectify the mistake, if:

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(a) the authority has passed orders by taking one of the alternative views, when two views are possible.

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(b) the authority has adopted one of the

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alternative methods available for assessment

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of tax according to law and later finds that more amount of tax could be obtained by adopting the alternative method.

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(c) a mistake has to be discovered by a long drawn process of reasoning or examining arguments on points of law and on facts or when further evidence is required to be adduced to rectify the mistake.

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The Statute does not confer any power on the

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assessing authority to reopen or review the assessment

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order and substitute it with a fresh one, on a different basis. There is much difference between reopening of an assessment and rectification of any mistake. The latter course can be pursued only if the mistake is apparent from the records and never by any

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fresh or long drawn process. Of course, the said

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power to have the mistake rectified can be exercised

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by the assessing authority within a period of three years, after affording an opportunity of hearing; but

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care and caution has to be taken to see that the said exercise does not transgress into a process which will make the proceedings an instance of review, for which there is no power. This is more so, in view of the ruling rendered by the Apex Court on many an occasion, explaining the scope of review and alerting that such power is very limited, subject to availability of 'error apparent on the face of the record' and that it cannot be a substitute for appeal. We find support from the dictum in Thungabhadra Industries Ltd. Vs. Government of Andra Pradesh [AIR 1964 SC 1372] and Meera Bhanja Vs. Nirmala Kumari Choudhary [AIR 1995 SC 455]. It cannot be an instance of 're hearing' as well, as held in Parsion Devi Vs. Sumitri Devi [(1997)

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8 SCC 715]. Similarly, if the original view, where two views are possible, is sustainable, substitution of that view by another view, will also not come within the purview of the review as held in M/s Northern India Caterers (India) Ltd. Vs. Lt. Governor of Delhi [(1980) 2 SCC 167] and N. Anantha Reddy Vs.

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Anshu Kathuria and others [(2013) 15 SCC 534].

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Earlier, some limited additional power was vested with the assessing authority under Section 16 of the Statute, involving revision of building tax, when annual value is refixed by the local authority. The said provision came to be deleted from the Statute Book as per Act 3 of 1992 w.e.f. 10.02.1992. This being the position, the second respondent assessing authority, who passed Ext.P3 order, becomes “functus officio” after the order and on serving it. Hence, no power of review to nullify the order already passed by him is available, nor is there any power or provision to place the assessment proceedings back in the track, to deal with Ext.P9 claim for exemption made by the appellant/owner of the building after passing the assessment order.

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However, since Section 3(2) of the Act does not specifically say that the claim for exemption has to be preferred before any assessment order is passed, it cannot be said that the owner of the building has

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no remedy. Reference has to be made by the competent authority and it can only be in a pending proceeding. It cannot be made by the Village Officer who is serving the demand notice or by such other authorities including the assessing authority, once he has become 'functus officio'. The remedy under such situation can only be by way of filing an appeal against the assessment order and by raising a question/claim before a competent authority. Appeal is a continuation of the original proceedings and since Section 3(2) of the Act does not say that the claim for exemption under Section 3(1)(b) has to be preferred before passing any assessment order, it is quite possible for the assessee to have it raised before the appellate

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authority as well. Once such a claim is mooted before the appellate authority [in appeal preferred within the specified time] in compliance with the statutory provision under Section 11 of the Act and the relevant Rules, it has definitely to be considered by the appellate authority, who does not have any

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right to proceed with the merit of the appeal before getting the matter referred to the Government in terms of Section 3(2) of the Act. On such reference, if the Government [who is the sole/competent authority to deal with the claims for exemption] passes an order in favour of the assessee, it has to be considered by the appellate authority and the assessment order has to be modified/set aside to the above extent. On the other

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hand, if the decision of the Government is to the contrary, it is for the appellate authority to deal with the merit involved and to finalize the appeal. Ext.P5 reply given by the second respondent, in response to Ext.P4 representation [putting up a claim for exemption after receipt of the assessment order

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and demand notice], is only to alert the appellant/assessee as to the said course of action to be pursued and nothing more. Ext.P5 does not say that the right to put forth the claim for exemption under Section 3(1)(b) is lost for ever. Same is the position with regard to the verdict passed by the

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learned single Judge, declining to interfere with Ext.P3, but relegating the appellant/writ petitioner to pursue the statutory remedy in accordance with law.

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The contention raised in appeal that the appellate remedy under Section 11 is not an equal or efficacious remedy, as the appellant assessee will have to satisfy the entire liability under Ext.P3 assessment order [for filing the appeal], is not correct. It is true, that the 'proviso' to Section 11 of the Act stipulates that no appeal shall lie unless the building tax has been satisfied. Payment of Building Tax is dealt with under Section 18 of the Act, which reads as follows :

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“ Payment of building tax - (1) Any amount specified as payable in a notice of demand under Section 10, or an order under Section 11 or Section 13 or Section 14 shall be paid in such number of installments, within such time, at such place and to such person, as may be prescribed, and any assesssee failing so to pay shall be deemed to be in default.

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[Provided that where the Government consider it necessary to do for the promotion of tourism, they may,

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by notification in the Gazette, provide for such additional tax in respect of the building the construction of which is completed on or after the 1^st day of March, 1993, and in such areas as may be specified and having such specifications as may be prescribed in this behalf];

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By virtue of Rule 13(1) of the Rules framed by the Government in exercise of the power under Section 26

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of the Act [particularly Section 26(2)(d)], it has to be paid to the Village Officer, within the time

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specified in the assessment order in four equal quarterly installments; the first of which requires to

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be satisfied within 30 days from the date of service of the assessment order on the assessee. Since the appeal under Section 11 has to be filed within 30 days [or within such extended time, on condoning the delay,

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to the extent as provided under sub-Section (3) of Section 11], it is open for an aggrieved assessee to

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prefer appeal on satisfying the 1^st quarterly installment of the tax assessed and demanded. The

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first quarterly installment amount has already been directed to be satisfied as per the order of reference itself.

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Coming to the verdict passed by the

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learned single Judge in Mother Superior's case [cited supra], the petitioner assessee did not file any return, even after completion of construction of the building, as required under Section 7(1) of the Act.

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The assessing authority issued a notice, which was served upon the petitioner/assessee, calling upon her to submit return under Section 7(3) of the Act, which was not responded to. This led to further notice under Section 9(4) of the Act, asking the assessee to appear for hearing [which was also served], but the assesee did not turn up. In the said circumstances, a detailed enquiry was made and the assessment was

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finalized by the assessing authority under Section

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9(5) of the Act, to the best of its judgment and it was served to the assesee. Still, there was no response. It was only after serving demand notice

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under Section 10 of the Act, that the

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petitioner/assessee turned up before the assessing officer along with a return and a covering letter, stating that the building in question was used principally for religious and charitable purpose; thereby eligible for exemption under Section 3(1)(b) of the Act and hence requesting the proceedings to be dropped. This was replied by the assessing authority pointing out that, if the assessee/petitioner had any objection to the assessment, she might file an appeal before the appellate authority as provided under Section 11 of the Act, which made the assessee to challenge the assessment order and the reply as aforesaid. The learned single Judge observed,

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referring to the relevant provisions, that the question of making a reference under Section 3(2) will

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arise [so far as the assessing authority is concerned], only if the question arises before him.

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It means, the question should arise before him in the course of assessment under Sections 7 and 9. Once he

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becomes 'functus officio', after making the assessment, any claim made before him thereafter [in terms of Section 3(1)(b) of the Act], is not a matter on which the assessing authority can or should make a reference under Section 3(2) of the Act. The learned Judge also adds that, the only option available to the assessee is to file an appeal under Section 11 or to proceed by way of revision under Section 13, more so, since no remedy is provided under the Act to raise the question of exemption again before the assessing authority, to have it referred to the Government. It is observed that, once an assessment is made, it can

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be set aside only by following the procedure prescribed under the Act and no collateral attack on the same by referring to Section 3(2) of the Act will lie. The learned single Judge has held that the assessment cannot be rendered a nullity or kept in suspense by raising a claim for exemption before the assessing authority, after its completion adding further that even the Government's power is only to

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decide the 'question of exemption' and nothing beyond. The power of revision vested with the Government under

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Section 14 of the Act also would not enable the Government to set aside any order or proceedings of the assessing authority. It is based on the said reasoning, that the learned Judge declared that the assessing authority is not bound to refer the question of exemption under Section 3(1)(b) of the Act to the Government, unless it was raised in the course of proceedings under Sections 7 and 9 of the Act.

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The said finding and reasoning came to be considered and approved by a Division Bench of this Court as per judgment dated 20.01.2016 in W.A. No. 106 of 2016 [Jayakrishnan V.G. Vs. State of Kerala].

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The factual position involved in the said case reveals that the assessment proceedings were completed and demand was made by the competent authority, which was never challenged and had become final. The materials on record revealed that the appellant/petitioner had actually conceded to the assessment, in as much as he

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was granted quarterly installment facility. He moved

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the office of the Revenue Minister and obtained an

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order of '12 monthly spread out installments'. Still, the remittance was not made and he got another order from the office of the Minister for Revenue, permitting him to pay the total outstanding liability in 'two' installments; despite which, no payment was effected. This led to initiation of revenue recovery proceedings. The writ petition filed challenging the revenue recovery proceedings came to be dismissed, which was taken up in appeal. The Bench observed that, initiation of the revenue recovery proceedings was

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well founded and it was not liable to be impeached on the basis of any jurisdictional error or factual infirmity. It was also observed that the Bench was not impressed with the plea that the assessment itself

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would not stand because the building belonged to an

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'educational institution', holding that no plea of exemption was raised before finalization of the proceedings. It was on holding that the assessment

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was not challenged and had became final, that the

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Bench approved the verdict passed by the learned single Judge in Mother Superior's case [cited supra] making it clear that a claim for exemption from payment of building tax, on the ground referable to Section 3 of the Act, cannot thereafter be raised. In other words, the claim, if at all any, after finalization of the assessment, is not possible to be referred to the Government, as no proceeding is 'pending' before any authority, if no appeal is filed; casting duty upon the assessing authority or the appellate authority, to have the question referred to the Government. This being the position, the verdicts passed by the leaned single Judge and that of the Division Bench as aforesaid are strictly in conformity with the provisions in the Statute.

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As held by the Division Bench of this Court in Victory Paper and Boards (India) Ltd. Vs. RDO [2000 KHC 557], the competent authority to decide the claim for exemption under Section 3(1)(b) is the Government.

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Neither the assessing authority, nor the appellate authority, is having any power to decide the question of eligibility. If a question is raised either before the assessing authority or the appellate authority [before the proceedings are finalized], such question has necessarily to be referred to the Government and further proceedings shall be kept in abeyance till the issue is finalized by the Government, which will have a bearing upon the order to be passed by the assessing authority/appellate authority, as the case may be.

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In Sacred Heart Hospital Vs. Secretary to Government [2011 (2) KLT 15] , the factual position

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discussed by the Division Bench reveals that a notice was issued by the assessing authority to levy the building tax, which was contested by the appellant on the ground that the building was constructed principally for charitable purpose, and therefore entitled to be exempted under Section 3(1)(b) of the Act. The said claim was rejected by the assessing authority and an assessment order was passed fixing a

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tax liability of Rs.3,76,200/-. The said assessment order was challenged in O.P. 31807 of 2002, which was disposed of, directing the claim to be referred to the Government as provided under Section 3(2). Pursuant to the said verdict, the matter was considered by the Government, who rejected the claim. This was sought to be reconsidered by the Government by filing a representation. The matter was reconsidered by the Government and the claim for exemption was rejected again, which was under challenge. The merit of the finding made by the Government for rejecting the claim for exemption was dealt with by the Bench and found that, to determine whether the building was eligible for exemption under

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Section 3 of the Act, it was necessary for the Government to have conducted an enquiry into the 'principal use' of the building, with reference to the memorandum of association of the society; the activities being carried on by the society; charges being levied on the patients in the hospital; number

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of patients who received the charitable treatment;

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audited accounts and such other materials, which were to be made available by the claimants seeking for exemption. It was on recording the dissatisfaction as to the lapses on the part of the Government in considering such materials, that the order passed by the Government was interdicted, directing the Government to have the matter reconsidered again.

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However, correctness of the said decision was sought to be considered in the light of the Full Bench decision reported in Unity Hospital (P) Ltd. &

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another Vs. State of Kerala & Others. [2011 (1) KLT

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236]. A Division Bench of this Court, as per the judgment reported in 2011 (4) KLT 104 [St. Sebastins Visitation Hospital Vs. State of Kerala] held that 2011 (2) KLT 15 [Sacred Heart Hospital Vs. Secretary

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to Government] was not a good law in view of the declaration of law made in 2011 (1) KLT 236 [cited supra] . The said decision, however, is not attracted in the present case and this aspect has been

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specifically noted by the Bench who passed the

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reference order, in paragraph 7 of the said order, as reproduced below :

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“7. Sub Section (2) does not specifically permit raising of the question of exemption at the time of assessment proceedings itself. The provision is widely couched in so far as a question arising on exemption being referable to the Government, who has to decide the same. We also see that another Division Bench in Sacred Heard Hospital v. Secretary to Government [2011 (2) KLT 15] allowed the question to be referred to the Government after the assessment on almost similar facts when a writ appeal was filed against a rejection of the writ petition. However, the specific question as to whether there could be an exemption claim made after assessment was not considered. This was specifically the issue in the unreported judgment and hence we are of the opinion that the question has to be considered by a larger Bench. We direct the Registry to place this writ appeal before the learned Chief Justice for appropriate orders.”

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The assessing officer becomes 'functus

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officio' once the assessment is made and he can modify the assessment only with reference to the powers

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conferred under the Statute. The claim for exemption,

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not made in the returns filed or at a time before completion of the assessment, is not a 'mistake' that could be corrected by the assessing officer invoking the power for rectification of mistake under Section 43 of the Kerala General Sales Act 1963 as held by the Division Bench of this Court in J. K. Tyre Industries Ltd. (M/s) Vs. State of Kerala [2010 KHC 981]. The Apex Court, as per judgment dated 16.02.1961 in Civil Appeal No. 369 of 1957 - Government of Utter Pradesh and others Vs. Muhammed Amir Ahammed Khan [AIR 1961 SC 787], has held that, after determination of the stamp duty, the Collector becomes 'functus officio' and he cannot impound the instrument and demand duty and penalty. As it stands so, once the assessment is finalized and order is passed and served, the assessing authority had become 'functus officio' and hence it was not possible for the appellant to have

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had raised a valid claim for exemption before the said authority.

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In the instant case, we have to hold that the observation made by the Bench while passing the order of reference, that Section 3(2) of the Act does not stipulate that a claim for exemption under Section 3(1)(b) has to be preferred before passing the assessment order, is perfectly correct and justified. But then, such a claim/question, after passing the assessment order can be validly raised and caused to be referred only by a competent authority. Since the assessing authority would become 'functus officio' after passing the assessment order, the claim can be raised and considered only in the next stage of the proceedings, i.e., only if a statutory appeal is filed under Section 11 of the Act. We declare that, even after passing the assessment order, it is open for the owner of the building/assessee to raise a claim/question for exemption, in an appeal filed against the assessment order, in terms of Section 11, satisfying the requirements and procedure for filing such appeal, within the specified time. Once such a

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claim/question is raised, the appellate authority is

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bound to have it referred to the Government for a decision under Section 3(2) of the Act. Then, it is for the Government to conduct an enquiry as to the merit in respect of the claim for exemption, i.e., to ascertain whether the building is being used for religious, charitable or educational purpose, after affording an opportunity of hearing to the claimant and the decision of the Government shall be final as mentioned in sub-section (3) of Section 3.

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In the light of the above discussions, we answer the reference holding that the appellant was

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not entitled to raise a claim/question for exemption in terms of Section 3(1)(b) of the Act before the assessing authority, who had become 'functus officio', after passing Ext.P3 assessment order. As it stands

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so, the challenge raised against Ext.P3 order is not

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liable to be sustained. By virtue of the power conferred upon this Court in view of Section 7 of the Kerala High Court Act 1958, we hold that there is no

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merit in the appeal. The verdict passed by the

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learned single Judge is quite in order and is not liable to be assailed on any ground. Appeal fails, it is dismissed accordingly.

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P. R. RAMACHANDRA MENON,

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JUDGE