IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH THURSDAY, THE 12TH JUNE 2008 / 22ND JYAISHTA 1930 WP(C).No. 14770 of 2008(G) ---------------------------------------------- PETITIONER: ------------------- 1. M/S.SARGAM BUILDERS PRIVATE LTD., REPRESENTED BY IT'S DIRECTOR, "PERIYAR BANKS",ALTHARA GCDA ROAD, THOTTAKKATTUKARA,ALUVA-8. 2. V.K.ABDUL RAHIM, "SARGAM",WATERLAND ROAD, ELAMKULAM,KANAYANNUR THALUK, COCHIN-682 020. BY ADV. SRI.V.V.SURENDRAN SRI.P.A.HARISH RESPONDENTS: ------------------------ 1. STATE OF KERALA, REPRESENTED BY SECRETARY (TAXES), TRIVANDRUM. 2. THE TAHSILDAR, TALUK OFFICE ALUVA TALUK, ALUVA. BY GOVERNMENT PLEADER SHRI C.K. GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12/06/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K. M. JOSEPH, J. -------------------------------------- W.P.C. NO.14770 OF 2008 G -------------------------------------- Dated this the 12th June, 2008 JUDGMENT First petitioner is a builder. Second petitioner is a land owner. They challenge Exts.P7 and P7(a) as against the petitioners. A declaration is sought that the Circulars/Government letters are without legal sanction, ultra vires to the Statute and unconstitutional to the extent it has insisted for registered agreements for the purpose of building tax assessment. 2. Briefly put, the case of the petitioners is as follows: On the basis of a Development Agreement and a common plan, sanction was given for construction of a multi-storeyed apartment complex. Thereafter, the petitioners as the promoter of the project identified prospective buyers for the undivided share in the land and apartments in the complex and entered into sale agreement for purchase of undivided interest in the land and for construction of specified apartment. Ext.P1 is stated to be WPC. 14770/08 G 2 one such agreement in respect of sale of undivided share of land. A true copy of one of the construction agreement entered into by the buyers is produced as Ext.P2. It is the further case of the petitioners that they have carried out the construction on the basis of agreements with the funds provided by the allottee/buyers and thereafter several allottees paid land value and obtained undivided share from the land owner. One such document is produced as Ext.P3. Ext.P4 is a photo copy of the Certificate of ownership issued by the Aluva Municipality. Petitioners have given the names and details of the allottees. It is also pointed out that in many cases, petitioners are retaining many apartments. Petitioners were proceeded against under the Kerala Building Tax Act. Petitioners were issued with notice. They were called for a hearing and they appeared on 14.2.2008. They claimed the benefit of Explanation 2 of Section 2(e) of the Kerala Building Tax Act. They requested for time. It appears that their request was granted till 28.2.2008. Thereafter, on 4.3.2008 petitioners filed a petition requesting some more time WPC. 14770/08 G 3 and they were given time till 24.3.2008. Again, the petitioners filed Ext.P8 objection dated 24.3.2008 pointing out that many of the allottees are abroad and they sought time. Thereafter, Ext.P7 order was passed assessing a total sum of Rs.5,70,600/= on the petitioners, to be paid in four equal instalments. 3. I heard Shri V.V. Surendran, learned counsel appearing for the petitioners and also the learned Government Pleader. Shri V.V. Surendran points out that this is a case which is squarely covered by the decisions of this Court including the decision in Bavasons Constructions (P) Ltd. v. State of Kerala (2007 (3) KLT 101). He has also produced certain other Judgments in support of his contention that the assessments are not legally done. He would say that under the Building Tax Act, the assessment is to be completed as against the owner. In this case, the owners are individual flat owners in respect of those flats/apartments they have right in, he submits. According to him, there are sixty independent units and it is illegal to fasten the entire liability on the petitioners. WPC. 14770/08 G 4 4. Per contra, learned Government Pleader would point out that the petitioners, apart from seeking time, have not produced any material in support of the contention that the petitioners are entitled to claim the benefit of Explanation 2 to Section 2(e). Even after grant of time sought for by them, they did not produce the documents. Counsel for petitioners points out that even after expiry of the time granted pursuant to Ext.P8, petitioners again orally requested for time. 5. Petitioners are claiming the benefit of the Explanation. Admittedly, first petitioner is a builder and second petitioner is the owner of the land. Assessment under the Building Tax Act is made as against the owner on the taxing event, namely the completion of construction of the building. Explanation to Section 2(e) carves an exception in respect of flats and apartments comprised in one building when they are owned by separate persons who have contributed to the construction of the building. This is a matter for the concerned parties to prove. In this case, apart from filing request after request, petitioners have WPC. 14770/08 G 5 not produced any material. I find that the petitioners have also not produced any document or at least given the names and addresses of the flat owners to the Tahsildar in which case under the decision of this Court in Bavasons Constructions (P) Ltd. v. State of Kerala (2007 (3) KLT 101), it would have become the duty of the Tahsildar to issue notice to those flat owners. Petitioners have also not produced any material to show that the cost of construction was met by the alleged individual owners of the flats/apartments. There is no material at all before the Officer concerned. He granted the time sought for. If such is the position, it may not be possible for me to interfere under Article 226 of the Constitution of India. But, learned counsel for petitioners would submit that the petitioners may be given some more time as many of the owners are abroad and the petitioners will be able to produce those agreements before the Authority and it is the duty of the Authority then to look into it and follow the directions contained in the decision in Bavasons Constructions (P) Ltd. v. State of Kerala (2007 (3) KLT 101) WPC. 14770/08 G 6 and pass orders in accordance with law as indicated in the said Judgment. Learned Government Pleader points out that it is open to the petitioners to produce materials, give the names and addresses and other materials before the Authority and in the facts of this case, petitioners may not be justified in seeking to set aside the order straight-away. I see some force in the submission of the learned Government Pleader in the facts of this case. This is, as I find that the petitioners have not produced materials before the Officer regarding the alleged cost of construction. It is open to the petitioners to produce any such material before the Appellate Authority and the Appellate Authority will have to consider the same and take appropriate decision in accordance with law. Accordingly, the petitioners are relegated to prefer Appeal against Ext.P7. Government Pleader points out that if the petitioners remit the first instalment, the Appeal can be considered. In such circumstances, the Writ Petition is disposed of as follows: If the petitioners prefer Appeal within fifteen days from WPC. 14770/08 G 7 today, accompanied by payment of the first instalment, the Appellate Authority will consider the Appeal on merits and take a decision before the second instalment becomes due. In other words, the Appeal will be disposed of in accordance with law, after affording an opportunity of hearing to the parties, before the second instalment is due. Recovery proceedings against the petitioner will be kept in abeyance for a period of fifteen days from today so as to enable the parties to file Appeals. It is open to the petitioners, to produce such materials as they are advised to produce before the Appellate Authority. K. M. JOSEPH, JUDGE kbk.