IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN WEDNESDAY, THE 28TH MAY 2008 / 7TH JYAISHTA 1930 WP(C).No. 17874 of 2005(C) ------------------------------------ PETITIONER: ------------------- K.RAVINDRAN, MANAGING DIRECTOR, KUSUMAM HOTELS (P) LTD., STRAWBERRY HILL, HAVELOCK ROAD, OOTACAMUND. BY ADV. SRI.K.RAMESH RESPONDENTS: ---------------------- 1. TAHSILDAR, CHAVAKKAD, THRISSUR. 2. REVENUE DIVISIONAL OFFICER, THRISSUR. 3. STATE OF KERALA, REP. BY CHIEF SECRETARY, GOVT. SECRETARIAT, THIRUVANANTHAPURAM. 4. DISTRICT COLLECTOR, THRISSUR. BY GOVERNMENT PLEADER SRI. MATHEW VADAKKEL R1,R2,R3,R4. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 28/05/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC.NO.17874/2005/C APPENDIX PETITIONER'S EXTS: EXT - P1 : TRUE PHOTOCOPY OF THE CLASSIFICATION ORDER. EXT - P2 : TRUE PHOTOCOPY OF THE CERTIFICATE OF EXEMPTION DATED 11.11.1998. EXT - P3 : TRUE PHOTOCOPY OF THE NOTICE DATED 20.02.2003. EXT - P4 : TRUE PHOTOCOPY OF THE REPLY STATEMENT. EXT - P5 : TRUE PHOTOCOPY OF THE NOTICE DATED 03.09.2004. EXT - P6 : TRUE PHOTOCOPY OF THE REPLY DATED 07.09.2004. EXT - P7 : TRUE PHOTOCOPY OF THE ASSESSMENT ORDER AND DEMAND NOTICE DATED 29.09.2004. EXT - P8 : TRUE PHOTOCOPY OF THE APPEAL & STAY PETITION. EXT - P9 : TRUE PHOTOCOPY OF THE APPLICATION. EXT - P10: TRUE PHOTOCOPY OF THE NOTICE. EXT - P11: TRUE PHOTOCOPY OF THE JUDGMENT PASSED IN W.P.C 34796/2004. EXT - P12: TRUE PHOTOCOPY OF THE ORDER PASSED BY THE 2ND RESPONDENT. /TRUE COPY/ PA TO JUDGE RHS P.R.RAMAN, J. ---------------------------------- W.P.(C) No.17874 OF 2005 ------------------------------------ Dated this the 28th day of May, 2008 J U D G M E N T ~~~~~~~~~~~ Petitioner is the Managing Director of the hotel “Vanamala Kusumam”, Guruvayoor. Petitioner challenges Ext.P7, a demand for building tax of an amount of Rs.4,06,800/- under the Kerala Building Tax Act, 1975. There is no dispute that if the building is not exempted, the concerned building is liable to be assessed. According to the petitioner, for the purpose of promoting tourism within the State, the Government issued an order as per G.O.(P)224/86/GAD dated 11.7.1986, as per which certain concessions were available to the tourism sector. One of which is to grant exemption from building tax levied by revenue department vide Class-II of the said order. The said Government Order as such is not produced in this case but a copy is made available at the time of argument. According to the petitioner, pursuant to the Government Order Ext.P2 certificate of eligibility was granted by the assessing authority declaring that the petitioner's building in question is eligible to be exempted and the matter ended there. Eleven years W.P.(C) No.17874/2005 2 thereafter they sought to re-open the assessment and it is in that process that Ext.P7 happened to be passed. According to the petitioner Ext.P7 is illegal and liable to be quashed mainly on the following grounds: i) once an exemption is granted vide Ext.P2 they cannot by way of rectification cancell Ext.P2 and revise the assessment under Section 15. ii)The Government is also bound by G.O.(P)224/86 on the ground of promissory estoppel. They are estopped from cancelling the exemption declared in the said Government Order. 2. The learned counsel appearing for the petitioner during the the course of his submission highlighting the two points as above, also placed reliance on the decision of the Apex Court in State of Punjab v. Nestle India Ltd. [2004(6)SCC 465] and also in George v. Tahsildar [2000(3)KLT 620]. The learned Government Pleader appearing on behalf of the State on the other hand would submit that the principle of promissory estoppel do not arise at all in the present case and this issue is W.P.(C) No.17874/2005 3 squarely covered by the Division Bench decision of this Court reported in May Flower Hotels Ltd. v. State of Kerala [2007 (2)KLT 41]. It is also contented that Government Order as such G.O.(P)224/86 do not grant any exemption. Government Order itself has issued in 1986 long prior to introduction of 3A. The Government Order itself says that necessary amendments are to be made to the provisions contained in the Kerala Building Tax Act and 3A was introduced only with effect from 6.11.1990, but in the case on hand, the building was constructed and completed on 9.10.1990 long prior to the introduction of 3A. Hence principle of promissory estoppel has no application. It is the further contention that there is order granting any exemption by the assessing authority and as such there is no question of any re-assessment being made in this case. 3. Heard both sides. As per G.O.(P)224/86, the Government ordered that certain concessions are available to the tourism sector, one of which is to exempt from building tax under the Kerala Building Tax Act, 1975. But this order itself says action to amend the Kerala Building Tax Act, 1975 will be W.P.(C) No.17874/2005 4 taken separately. The Government therefore made it clear in their order that the manner in which exemption has to be granted is to be done after amending Kerala Building Tax Act. Section 3A which is a provision enabling the Government to grant exemption was introduced only with effect from 6.11.1990. Therefore, he could not contend that he had acted based on the promise since a building is constructed before 6.11.1990. In this case, the counter affidavit in paragraph 3 is specifically averred that the building on which construction was completed on 9.10.1990 and as such the petitioner cannot be heard to contend that the construction of the building in question was based on the promise made in the G.O.(P)224/86 so long as 3A was introduced only later in point of time. Hence the decision sighted by him in State of Punjab v. Nestle India Ltd. [2004 (6)SCC 465] has no application to the facts of this case. 4. Now I shall come to the order Ext.P2 which only shows that the assessing officer has certified the building to be eligible for exemption. No order as such was passed granting any exemption in respect of the building in question. The W.P.(C) No.17874/2005 5 manner in which an exemption has been granted in respect of any building is to be by way of a notification as provided for under Section 3A. A Division Bench of this Court in May Flower Hotels Ltd. v. State of Kerala [2007(2)KLT 41] also held that 3A is only an enabling provision and there was freedom with Government in regard to its choice of the area and specification has to be prescribed by rules and in the absence of any notification there cannot be any legal claim for the grant of exemption from payment of building tax. Even accepting for arguments sake even if a notification was not considered necessary still on the face of Ext.P2 it cannot be said that building as such is exempted by the authority competent to exempt since the Government is the competent authority to grant exemption and none elese. A certificate of eligibility is not an order of exemption. It only recommends that the building is eligible for exemption. Based on Ext.P2 somebody has to pass an order. The government being the only authority competent to exempt a building from building tax, there is no force in the argument of the petitioner. If so, the question of revising any order does not arise. Therefore, whether the rectification W.P.(C) No.17874/2005 6 proceedings are valid in law also do not arise for consideration. Hence there was no order as such granting any exemption. In the absence of which and so long as it does not shown that the building in question is liable to be exempted, the assessment cannot be faulted. In the result, the contention fails and accordingly the writ petition dismissed. However, in the circumstances no order as to cost. According to the petitioner he has already paid an amount equivalent to 50% demanded and he prays for a short time for payment of the balance amount. Considering the fact that the matter was pending before this Court, it is only appropriate that sometime is granted to enable the petitioner to clear the balance amount. Accordingly, there will be a direction that the balance amount shall be paid within a period of one month from today and any coercive steps shall be taken only after the expiry period of the said one month. (P.R.RAMAN, JUDGE) ps W.P.(C) No.17874/2005 7