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K.M.Suresh Kumar v. Tahsildar, Kozhikode

Kerala HC12 Jul 2023WP(C)/27608/2017

Case brief

AI extract

What is this about?

The High Court of Kerala held that Explanation II to Section 2(e) of the Kerala Building Tax Act applies generally, not only to luxury tax under Section 5A. The Court quashed orders assessing apartment units as a single building without benefiting separate ownership provisions.

What did the court decide?

The impugned assessment orders Exts.P2, P3 and P4 were set aside and the matter was remanded to the assessing authority to pass an appropriate fresh order of assessment.

K.M.Suresh Kumar Vs Tahsildar, Kozhikode — Property and Title | Kerala HC (2023)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN

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WEDNESDAY, THE 12^TH DAY OF JULY 2023 / 21ST ASHADHA, 1945 WP(C) NO.27608 OF 2017

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PETITIONER :-

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K.M.SURESH KUMAR, KIZHAKKEMADAM, PULASSERY P.O – 679 307 PATTAMBI (VIA), PALAKKD DISTRICT, NOW RESIDING AT APARTMENT NO.A2, ATHULAYA CHUNDARI APARTMENTS, DR.A.R.MENON ROAD, NAIKKANAL, THRISSUR-1.

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BY ADVS. SRI.K.B.GANGESH SMT.ATHIRA A.MENON

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RESPONDENTS :-

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1 TAHSILDAR, TALUK OFFICE, KOZHIKODE - 673 020.

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2 THE REVENUE DIVISIONAL OFFICER COLLECTORATE ERAHIPPALAM, KOZHIKODE – 673 020.

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3 DISTRICT COLLECTOR COLECTORATE ERANHIPPALAM, KOZHIKODE - 673 020. SMT.RESMITHA R CHANDRAN, GP

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) NO.27608 OF 2017

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-: 2 :-

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JUDGMENT

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Dated this the 12th day of July, 2023

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This writ petition is filed seeking the following reliefs :-

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“(i) a writ of certiorari or any other appropriate writ, order or direction to quash Exts.P2, P3 and P4 orders passed by respondents 1, 2 and 3 respectively.

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(ii) a writ of mandamus or any other appropriate writ, order or direction commanding the respondents to complete assessment of Athulaya Raja Apartments in Re-Survey No.24.17.721 of Valayanad Village, Kozhikode Taluk as 17 separate apartment units owned by 17 separate owners for the purpose of levy of building tax under the Provisions of Kerala Building Tax Act.”

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Heard the learned counsel for the petitioner and the

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learned Government Pleader.

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It is submitted by the learned counsel for the petitioner that the issue raised in this writ petition stands squarely covered by a judgment of this Court in State of Kerala and others v. A. P. Mammikutty [2015 (3) KHC 794].

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The learned Government Pleader has placed reliance on a judgment of this Court dated 7.2.2017 in W.P.(C) No.8054/2015 ( Unni Kerala Varma v. Tahsildar ) and contends that A. P. Mammikutty's case applies only for assessment of

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WP(C) NO.27608 OF 2017

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luxury tax under Section 5A of the Kerala Building Tax Act, 1975.

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Having considered the contentions advanced, I

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notice that the Apex Court in A. P. Mammikutty's case has specifically referred to the definition clause in Sections 2(e) and 2(k) of the Kerala Building Tax Act and specifically to the effect of Explanation II to Section 2(e). It is held in paragraph 14 as follows :-

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“........The Explanation II refers to different apartments or flats owned by different persons. It also states that the cost of the construction of the building is to be met by all such persons jointly. This Explanation, as noted before, is required to be appositely understood. The learned counsel for the state would submit that if there is initial booking and the persons have contributed for the construction definitely there shall be separate computation. The Explanation II has to be read with S.5A which starts with a non obstante clause. S.5A as has been mentioned before refers to “residential building” having plinth area 278.7 sq. mts. or more and, therefore, the said provision also takes note of this definition. In view of the above, the contention advanced by the learned counsel for the State is difficult to accept. The definitions have to be given a proper construction. There can be a case where the owner erects a multi-storied building consisting 10 floors. He builds it at his own cost and thereafter he sells the apartments or flats to 10 persons and in that event he ceases to be the owner of the building. The 10 purchasers become the owners of flats and in

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WP(C) NO.27608 OF 2017

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such a situation it will lead to an absurdity because one single person who once owned the entire building or several apartments, though has ceased to be the owner in law yet is asked to pay the luxury tax solely on the ground that at the time of construction there was no contribution by the purchasers or to put it differently there had been no prior booking. This is not the intention. The Explanation II to S.2(e) has to be read harmoniously with proviso to S.2(k) and S.5A of the Act. The intention of the Legislature as gatherable is that ownership of different flats and the cost of construction of building are met by all such persons. The meeting of the cost jointly is not to be narrowly construed to mean that there has to be an investment before the commencement of the construction of the building. The persons who purchase afterwards they really share the value of the construction cost apart from the profit margin due to the builder or the seller. Unless such an interpretation is placed, the original owner of flats when he ceases to be the owner of the building or the purchaser of a small apartment less than 278.7 square meters would still be liable to pay luxury tax. Such an interpretation would lead to absurdity.”

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I am of the opinion that the contention raised by the learned Government Pleader that the decision in A. P. Mammikutty's case is applicable only to assessment on luxury tax under Section 5A cannot be accepted. In view of the specific findings of the Apex Court, I am of the opinion that the assessment made in respect of the property as a single building without giving the benefit of Explanation II to Section

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WP(C) NO.27608 OF 2017

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2(e) was improper. The impugned assessment orders are set aside. The matter is remanded to the assessing authority to pass appropriate orders, taking note of the date of agreements and the sale deeds and to pass a fresh order of assessment, in accordance with law.

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Sd/ANU SIVARAMAN JUDGE

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Jvt/20.7.2023

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WP(C) NO.27608 OF 2017

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APPENDIX OF WP(C) 27608/2017

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PETITIONER EXHIBITS

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EXHIBIT P1 TRUE COPY FO THE TRIPARTITE AGREEMENT ENTERED INTO WITH SHALINI V, THE OWNER OF APARTMENT NO. F2 ON 20122004

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EXHIBIT P2 TRUE COPY OF THE ORDER ASSESSMENT PASSED BY 1ST RESPONDENT NON 27/9/2014

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EXHIBIT P3 TRUE COPY OF THE ORDER OF DATED 30/3/2015 ISSUED BY THE 2ND RESPONDENT.

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EXHIBIT P4 TRUE COPY OF THE ORDER DATED 1/2/2017 PASSED BY THE 3RD RESPONDENT.

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EXHIBIT P5 TRUE COPY OF THE JUDGMENT IN WPC NO. 307 DATED 22/5/2013.

K.M.Suresh Kumar v. Tahsildar, Kozhikode

Case brief

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K.M.Suresh Kumar v. Tahsildar, Kozhikode

Case brief

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