IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR WEDNESDAY, THE 23RD JULY 2008 / 1ST SRAVANA 1930 OP.No. 12912 of 2001(K) --------------------------------- PETITIONER: ------------------ 1. T.P.GEORGE, S/O. PAULOSE, THAMARACHALIL, AIKKARANADU SOUTH VILLAGE, KOLENCHERRY. 2. MRS. SOUMINI GEORGE, W/O. T.P.GEORGE, THAMARACHALIL DO. DO. BY ADV. SRI.C.K.ABDUL RAHIM SRI.P.V.KURIACHAN RESPONDENTS: ---------------------- 1. STATE OF KERALA, REP.BY THE CHIEF SECRETARY, TO GOVERNMENT OF KERALA, GOVERNMENT SECRETARIAT, TRIVANDRUM. 2. THE DISTRICT COLLECTOR, CIVIL STATION, KAKKANADU, ERNAKULAM. 3. THE REVENUE DIVISIONAL OFFICER, FORT KOCHI. 4. THE TAHSILDAR, KANAYANNUR TALUK OFFICE, ERNAKULAM. BY GOVERNMENT PLEADER THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 23/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: OP. NO.12912/2001 ORDER ON CMP. NO.20612/2001 IN OP. NO.12912/2001 DISMISSED 23.07.2008 SD/- T.R.RAMACHANDRAN NAIR, JUDGE APPENDIX PETITIONERS EXHIBITS EXT.P1:- COPY OF THE ASSESSMENT ORDER NO.B3-12709/90 DT. 30.8.1991 BY the 4TH RESPONDENT. EXT.P2:- COPY OF THE NOTICE NO.B6-14841/93 DT. 3.12.1993 ISSUED FROM THE 4TH RESPONDENT. EXT.P3:- COPY OF THE PERMIT ORDER NO.TP6-1045/81 DT. 4.6.83 ISSUED BY the TOWN PLANNING DEPARTMENT. EXT.P4:- COPY OF THE PROCEEDINGS NO.B6-14841/93 DT. 3.3.1994 BY THE 4TH RESPONDENT. EXT.P5:- COPY OF THE ORDER NO.K.DIS. 46095/99/B10 DT. 17.3.2001 OF THE DISTRICT COLLECTOR, ERNAKULAM. EXT.P6:- COPY OF THE ORDER NO.K.DIS. 2725/91/G DT. 8.7.99 OF THE REVENUE DIVISIONAL OFFICER, FORT KOCHI. /TRUE COPY/ P.A. TO JUDGE tss T.R.RAMACHANDRAN NAIR, J. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ O.P. No.12912/2001-K ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Dated this the 23rd day of July, 2008 J U D G M E N T The petitioners are aggrieved by the proceedings initiated and the consequent orders passed by the various authorities by invoking Section 15 of the Kerala Building Tax Act. The petitioners constructed a six storied building including staircase landing situated on top of the sixth floor, in Survey No.858/9-11 of Ernakulam Village. The details regarding the building are not necessary to be stated for deciding the issue here. Based on the returns filed by the petitioners, steps were taken to assess the building for assessment under the Building Tax Act. Ext.P1 is the order of assessment dated 30/08/1991 whereby the total amount of tax payable is shown as 11,40,155/-, which the petitioners have admittedly remitted. 2. Almost, three years later, Ext.P2 notice was issued to the petitioners by the Tahsildar under Section 15 of the Building Tax Act proposing revision of the assessment of building tax. In the said notice, it is stated that the annual rental value for the 6th and 7th floors has not been taken for the assessment of the building tax since these floors should have been assessed based on the rent fetched for the other floors. 3. The petitioners filed objection to Ext.P2 notice and, thereafter, Ext.P4 order was passed. As per Ext.P4, revised order for O.P.NO.12912/2001-K -:2:- assessment of building tax was passed under Section 15 of the Building Tax Act. This was challenged by the petitioners in appeal which stands dismissed as per Ext.P6. Thereafter, the petitioners filed revision petition before the second respondent-District Collector against Ext.P6 order of the third respondent but the second respondent dismissed the same as per Ext.P5. 4. The building consists of six floors. The 7th floor is a small portion of the staircase landing. At the time of original assessment, three floors had been rented out. Out of the remaining three floors, two were occupied by the owners and the last one was remaining vacant. The assessing authority at the time of assessment adopted a method for arriving at the capital value based on the actual annual rent received in respect of the three floors and, in respect of the remaining two floors it was based on the annual rental value fixed by the Corporation. Now, by the method of rectification, the fourth respondent has changed the basis for the assessment of the two floors by arriving at the annual rental value, i.e. by adding 10% of the actual rent fetched to the third floor, and for the 6th and 7th floors by giving reduction of 10% respectively on the actual rent fetched to the fourth floor. Ultimately, it is stated that uniform rate has to be adopted for assessing the building tax. In Ext.P4 it is recorded that “the building tax has to be revised applying a uniform rate for assessing building tax.” The question is whether the said O.P.NO.12912/2001-K -:3:- method adopted by invoking Section 15 is correct or not. Section 15 of the Building Tax Act confers power for rectifying mistakes. Herein it is clear from the proceedings as well as the notice issued that the assessing authority felt that it had to be revised since a uniform method was not adopted 5. The learned counsel for the petitioner Sri.C.K.Abdul Rahim contended that going by the various decisions of this Court the method adopted is clearly faulty. Reference is made to the judgment of a Division Bench of this Court in Kurian George v. Tahsildar [1995(2) KLT 457]. My attention was invited to paragraphs 12, 17 and 18 of the judgment. After analysing the scheme of the Building Tax Act and other decisions of this Court, the Division Bench laid down the parameters that will govern the interpretation of the provision. In paragraph 17, various tests have been laid down, which is extracted below: “17. The following propositions of law emerge out of the above decisions: (1)Subject to the provision of period of limitation prescribed by the relevant statute, a mistake apparent from the record can be rectified by the competent authority named therein; (2)Usually, the following mistakes are considered to be “mistakes apparent from the record”: (a)Arithmetical error (b)Clerical error O.P.NO.12912/2001-K -:4:- (c)Slip or inadvertent omission in an order or judgment; (d)If the later enactment having retrospective operation enables an authority to modify or alter the original assessment order; and (e)Wherein the earlier assessment order no valid principle of law was applied. (3)An authority has no jurisdiction to rectify a mistake, if-- (a)the authority has passed orders by taking one of the alternative views, when two views are possible; (b)the authority has adopted one of the alternative methods available for assessment of tax according to law and later finds that more amount of tax could be obtained by adopting the alternative method; (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; (4)Re-opening or review of an assessment order is not permissible if the relevant statute does not confer such powers on an authority; (5)Taxing authority is a quasi-judicial authority. Hence no higher administrative authority or even appellate authority without hearing the affected party or in the absence of an appeal can give direction to the O.P.NO.12912/2001-K -:5:- assessing authority to pass orders in one way or the other. (6)A writ is maintainable even at the notice stage, where threat of prejudicial action is wholly without jurisdiction. (7)An order or direction under Article 226 of the Constitution of India can be issued by the High Court prohibiting an authority acting without jurisdiction from continuing such action inspite of existence of such alternative remedies as appeals and revisions.” 6. The legal position as such will show that if the authority has already adopted one of the alternative methods available for assessment of tax, and merely by finding later that more amount of tax would be obtained by adopting an alternative method, the order cannot be revised by invoking Section 15 of the Building Tax Act. Herein, the method of assessment for fixing capital value adopted was under Section 6 of the parent Act. As per Section 6(1) of the Building Tax Act, the annual value of a building shall be the annual value fixed for that building in the assessment books of the local authority within whose area the building is situated. Section 6(2) provides that notwithstanding anything contained in sub-section (1), if the assessing authority is of the opinion that the annual value fixed for a building in the assessment books of the local authority is too low, it may, after giving the person or persons O.P.NO.12912/2001-K -:6:- affected thereby an opportunity of being heard, fix the annual value of the building. Therefore, one or the other methods the assessing authority was bound to follow was adopted when the original order of assessment was passed. 7. The learned Government Pleader invited my attention to the unamended provisions of Section 2(a) which laid down that “annual value” of a building means the gross annual rent at which the building may at the time of completion be expected to let from month to month or from year to year. It is therefore submitted that the method now adopted by the assessing authority ought to have been adopted at the time of original assessment and the present attempt is only a rectification of an error apparent on the face of the order. 8. Going by the paragraph '17' of the judgment in Kurian's case, it is clear that the method adopted by the assessing authority is clearly unsustainable. It has been held that the authority has no jurisdiction to rectify a mistake if the authority has adopted one of the alternative methods available for assessment of tax according to law and later finds that more amount of tax could be obtained by adopting alternative method. Considering a similar issue, it was held in para 12 that “the basis of assessment as contemplated in Sub Section (1) and (2) of Section 6 are two distinct and alternative methods. The assessing authority is at liberty to adopt one of the basis for assessment of O.P.NO.12912/2001-K -:7:- building tax. Once he adopts one basis and makes the assessment final, he cannot later on turn round and say that the alternative method should have been adopted. That is because of the fact that once he makes the assessment and in pursuance thereof tax was collected he becomes functus officio and loses his jurisdiction over the matter”. 9. The learned Government Pleader tried to explain that at the time of original assessment a wrong principle of law was applied and that could be rectified by the process of rectification. I am afraid that the the said contention cannot be accepted for more reasons than one. Their Lordships had held in Kurian George's case (supra) that a mistake could be termed as a mistake apparent on the record “wherein in the earlier assessment order no valid principle of law was applied”. This is not a case where in the earlier assessment no valid principle of law was applied but it is a case where the assessing authority adopted a method available or provided as per Section 6 of the Building Tax Act as unamended and therefore, the said test will not apply to the fact of this case. Apart from that it is well settled that if a mistake has to be found out by a long drawn out process then that cannot be termed as a mistake apparent on the face of the record. Herein, going by Ext.P4 what is attempted is to pass a revised order of assessment which is clearly stated in the order itself in the operative portion. It is well settled that a revised assessment or a reviewed assessment cannot be O.P.NO.12912/2001-K -:8:- passed by invoking the power of rectification. For all these reasons, I held that the authority lack jurisdiction in passing Ext.P4. Therefore, Ext.P4 and the orders passed in appeal and revision, namely, Exts.P6 and P5 are hereby quashed. Original petition is allowed as above. If any amount has been paid pursuant to Ext.P4, the petitioner will be entitled for the refund of the same. The writ petition is disposed of as above. No costs. T.R.RAMACHANDRAN NAIR, Judge ms O.P.NO.12912/2001-K -:9:- T.R.RAMACHANDRAN NAIR, J. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ O.P. No.12912/2001-K ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ J U D G M E N T 23 23RD RD JULY, 2008 JULY, 2008