IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC WEDNESDAY, THE 30TH JANUARY 2008 / 10TH MAGHA 1929 W.P.(C).No. 33030 of 2007(F) ----------------------------------- PETITIONER: -------------- MUTHOOT TECHNOPOLIS, COCHIN SPECIAL ECONOMIC ZONE (CSEZ), CSEZ POST, KAKKANAD - 682030 REPRESENTED BY ITS DIRECTOR, THOMAS GEORGE MUTHOOT. BY ADV. SRI.MILLU DANDAPANI RESPONDENTS: ----------------- 1. THE TAHSILDAR, KANAYANNUR TALUK. 2. STATE OF KERALA, REPRESENTED BY THE SECRETARY, DEPARTMENT OF LOCAL SELF GOVERNMENT, GOVT.SECRETARIAT, TRIVANDRUM-695001. 3. STATE OF KERALA, REPRESENTED BY THE SECRETARY, DEPARTMENT OF INDUSTRIES AND COMMERCE, GOVERNMENT SECRETARIAT, TRIVANDRUM -695001. 4. THE SECRETARY, DEPARTMENT OF REVENUE, GOVERNMENT OF KERALA, GOVERNMENT SECRETARIAT, TRIVANDRUM - 695 001. 5. THE DEVELOPMENT COMMISSIONER, CSEZ, KAKKANAD, COCHIN-682030. BY GOVT. PLEADER, SRI.C.K. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16/01/2008, THE COURT ON 30/01/2008 DELIVERED THE FOLLOWING: ANTONY DOMINIC, J. =============== W.P.(C) NO. 33030 OF 2007 F ===================== Dated this the 30th day of January, 2008 J U D G M E N T The prayer in this writ petition is for quashing Exts.P3 and P6 and also to direct the respondents to refer the claim of the petitioner for exemption from the levy of building tax under the Kerala Building Tax Act (hereinafter referred to as the “Act”) for decision to the 4th respondent as required under Section 3(2) of the said Act. 2. Petitioner states that it is a company incorporated under the provisions of the Companies Act, 1956 and that, they had taken land within the Cochin Special Economic Zone on lease for a period of 30 years and have constructed a building known as “Muthoot Technopolis”, having a plinth area of 20,000 sq.metre. The said building has been leased out to others for locating their software units. It is stated that the petitioner assumed that it had no legal obligation to submit returns under WPC 33030/07 :2 : Section 7 of the Act, but however, was issued Ext.P3 notice directing it to submit return to the 1st respondent. On receipt of Ext.P3, petitioner submitted Ext.P4 explanation contending that it is an industrial complex situated within the Cochin Special Economic Zone and that four IT companies with more than 3,500 employees are working in the said building. On this basis, petitioner claimed the benefit of exemption as provided in Section 3(1)(b) of the Kerala Building Tax Act. It is stated that inspite of its claim for exemption, the petitioner still submitted Ext.P5 return. Thereafter, the 1st respondent issued Ext.P6 notice calling upon the petitioner to appear in person for an enquiry along with the records. On receipt of Ext.P6, petitioner again submitted Ext.P7 and when Ext.P8 site inspection notice was issued, this writ petition was filed seeking to quash Exts. P3 and P6 and for the other reliefs mentioned above. 3. One of the contentions of the petitioner is that it is a Co-Developer of an Information Technology Park by name “Muthoot Technopolis” situated in the Cochin Special Economic WPC 33030/07 :3 : Zone and therefore, it is entitled to exemption from Building Tax on the strength of Exts. P1 and P2 notifications. It is also contended that since the building is one where software units are functioning, it is an industrial complex entitled to the benefit of exemption provided for factories in Section 3(1)(b) of the Act. On this basis, petitioner would contend that once the benefit of exemption from the Act is claimed, the question shall be referred to the 4th respondent and it is for the 4th respondent to decide as to whether the building falls under Section 3(1) of the Act. Therefore, the submission made is that when the petitioner submitted Ext.P4 in reply to Ext.P3 notice, the 1st respondent ought to have been referred the matter to the 4th respondent. 4. I have considered the submissions. 5. The first claim raised by the petitioner is that it is a Co-Developer of an Information Technology Park within the Cochin Special Economic Zone. The expression “Co-Developer” is defined in Section 2(f) of the Special Economic Zones Act, 2005, as a person who, or a State Government which, has been granted WPC 33030/07 :4 : by the Central Government, a letter of approval under Section 3 (12) of the said Act. Section 3(12) provides that every person whose proposal for the establishment of a Special Economic Zone has been approved by the Board constituted under Section 8(1) of the Act and who or which, has been granted letter of approval by the Central Government, shall be considered as a Co- developer of the Special Economic Zone. 6. In this case, apart from the mere fact that the petitioner has taken on lease a portion of the land coming within the Cochin Special Economic Zone, where they have constructed a Commercial Complex, the petitioner has no case that it has been issued a letter of approval as provided for in Section 3(12) of the Special Economic Zones Act, 2005. The mere fact that they have constructed the building within the Cochin Special Economic Zone, will not confer on them the status of a Co-Developer. Therefore, the claim of the petitioner that it is a Co-Developer is plainly unsustainable. 7. The benefit of Ext.P2 notification is available only to WPC 33030/07 :5 : Developers of Special Economic Zone. Developer has been defined in Sec 2 (g) of the Special Economic Zones Act 2005, as one who has been granted letter of approval under Section 3(10) of the Act and includes an Authority as defined in Section 2(d) and a Co-Developer defined in Section 2(f). Since the petitioner is neither a Developer as defined in Section 2(g) of the SEZ Act, 2005 nor a Co-Developer as defined in the said Act, it is not entitled to the benefit of Ext.P2 notification as well. 8. It is true that Ext.P2 notification exempts industrial units and other establishments established within the Special Economic Zones in the State from the payment of tax, cess etc. However, a reading of Ext.P2 discloses that the exemption granted by this notification applies only to tax, cess etc which are leviable under Section 200 of the Kerala Panchayat Raj Act, 1994. Section 200 of the Kerala Panchayat Raj Act provides the tax, cess etc, which may be levied by Village Panchayat. The tax and cess enumerated in Section 200 does not include Building Tax leviable under Kerala Building Tax Act. If that be so, for WPC 33030/07 :6 : reasons that the petitioner is not a Developer or a Co-Developer and also for the reason that the Building Tax is not one enumerated under Section 200, petitioner is not entitled to the benefit of Ext.P2 notification issued by the 4th respondent. 9. The other claim raised by the petitioner is for the benefit of Ext.P1 notification issued by the 4th respondent granting incentives to the units set up in the Cochin Special Economic Zone. Here again, the only exemption granted is from payment of property tax and not building tax. Thus, the petitioner is not entitled to the benefit of Exts. P1 either and the claim is totally unsustainable. 10. Now, what remains is the claim of the petitioner for exemption provided in Section 3(1)(b) of the Kerala Building Tax Act. This section, to the extent it is relevant, provides that nothing in the Act shall apply to buildings used principally as factories or workshops. Section 3(2) provides that if any question arises as to whether a building falls under Sub Section (1), it shall be referred to the Government and the Government WPC 33030/07 :7 : shall decide the question after giving the interested parties an opportunity to present their case. In this case, the claim of the petitioner is that portions of the building “Muthoot Technopolis” constructed by it, have been leased out to software units and therefore, it is entitled to exemption provided for factories in Section 3(1)(b) of the Act. 11. In several cases, this court has taken the view that once a claim for exemption is made, it is to be referred to the Government to decide on the merits of the claim and the Assessing Authority has no jurisdiction in the matter. This interpretation has been accepted mainly for the reason that Section 3(2) provides that once a question as to whether a building falls within Section 3(1) arises, it shall be referred to the Government for its decision. In this case, a reading of Exts. P4 and P7 explanations of the petitioner show that it is the case of the petitioner that the building comes within the purview of Section 3(1)(b) of the Act. To be covered by Sec 3(1)(b) of the Act, the principal use of the building should be that of a factory. WPC 33030/07 :8 : To be a factory, an establishment should have a factories licence. The petitioner has not even pleaded in the writ petition that the establishments functioning in their premises are licenced factories. Therefore, it is without any material this claim for exemption was made. Though it is true that it is for the 4th respondent to decide whether the building is a factory or not, I do not think every frivolous claim should be referred to the 4th respondent. In this, on the materials available, I am satisfied that the petitioner has not succeeded in establishing a prima facie case for exemption. Therefore, I am not prepared to hold that the claim raised ought to have been referred to the decision of the 4th respondent. The writ petition merits only to be dismissed and I do so. ANTONY DOMINIC, JUDGE. Rp