IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN TUESDAY, THE 25TH OCTOBER 2011 / 3RD KARTHIKA 1933 WP(C).No. 33175 of 2007(Y) --------------------------------------- PETITIONER: ------------------- KOTTAYAM MUNICIPALITY, KOTTAYAM, REPRESENTED BY ITS SECRETARY. BY ADVS. SRI.SIBY MATHEW, SRI.A.A.MOHAMMED NAZIR. RESPONDENTS: ------------------------ 1. A.P.KUNJU, S/O LATE M.AHMED KUNJU, REGENT PLAZA, C.M.S.COLLEGE ROAD, KOTTAYAM-1. 2. JAMEELA BEEVI, REGENT PLAZA, C.M.S.COLLEGE ROAD, KOTTAYAM-1. 3. TRIBUNAL FOR LOCAL SELF GOVERNMENT INSTITUTIONS, THIRUVANANTHAPURAM. R1 & R2 BY ADV. SRI.M.SREEKUMAR, R3 BY GOVT. PLEADER SRI. NOBLE MATHEW. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25/10/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).NO.33175/2007-Y: APPENDIX PETITIONER'S EXHIBITS:- EXT.P.1.SERIES: COPIES OF NOTICES DTD. 07/09/2005 ISSUED BY THE KOTTAYAM MUNICIPALITY TO RESPONDENTS 1 & 2. EXT.P.2: COPY OF THE NOTICE DTD. 08/02/2006 ISSUED BY THE KOTTAYAM MUNICIPALITY TO RESPONDENTS 1 & 2. EXT.P.3: COPY OF THE ORDER DTD. 12/12/2006 OF THE FINANCE STANDING COMMITTEE OF THE KOTTAYAM MUNICIPALITY. EXT.P.4: COPY OF THE ORDER DTD. 11/09/2007 ISSUED BY THE R.3. RESPONDENT'S EXHIBITS:- EXT.R2.A: COPY OF THE APPEAL DTD. 27/02/2006 FILED BY RESPONDENTS 1 & 2 BEFORE THE FINANCE STANDING COMMITTEE OF THE MUNICIPALITY. EXT.R2.B: COPY OF THE REVISION PETITION NO. 22/07 DTD. 11/01/2007 FILED BY RESPONDENTS 1 & 2 BEFORE THE TRIBUNAL FOR LOCAL SELF GOVERNMENT INSTITUTIONS, TRIVANDRUM. //TRUE COPY// P.A. TO JUDGE Prv. S.SIRI JAGAN, J. ================== W.P.(C).No. 33175 of 2007 ================== Dated this the 25th day of October, 2011 J U D G M E N T The petitioner is a Municipality. They assessed the building of respondents 1 and 2 to property tax under the Kerala Municipality Act, in the year 1999. Respondents 1 and 2 paid the property tax accordingly. In 2005, Ext.P1 series of notices were issued revising the property tax retrospectively with effect from 1999-2000 onwards. No reasons have been mentioned therein as to why the tax already assessed should be revised. Respondents 1 and 2 took up the matter before the Tribunal for Local Self Government Institutions, Thiruvananthapuram. The contention of the Municipality before the Tribunal was that the Vigilance and Anti Corruption Bureau raised serious doubts regarding the validity of the assessment on the ground that an area of 389 sq.m of the building has not been assessed to tax and the Vigilance Department directed the Municipality to revise the assessment accordingly. It is pursuant to the same, that the assessment has been revised taking into account the additional 389 sq.m. also. 2. I have heard the parties. 3. The question was considered by the Tribunal by Ext.P4 order deciding as follows: w.p.c.33175/07 - : 2 :- 'The Appeal as well as Revision there from are filed challenging the re-assessment of building tax. It is admitted in the written statement of the Counter Petitioner that the Petitioner had completed the 3 storied commercial building including the cellar portion in the year 1999 and the building was assessed to tax in 1999 itself. It is also stated in the written statement that in 2004 the Vigilance and Anti Corruption Bureau found out some irregularity with respect to the assessment to the effect that the Municipality had omitted to assess an area of 389 Sq. meters in the said building and that on the basis of the said finding the Additional Chief Secretary and Principal Secretary to the Government directed the Municipality to take immediate steps to re-fix the municipal tax in respect of the building and hence the tax was re-fixed. The provision as to assessment in case of escape from as assessment is contained in Section 282 of the Kerala Municipality Act as follows: “Notwithstanding anything to the contract contained in this Act or the rules made thereunder, where for any reason a person liable to pay any tax or fees leviable under this Chapter has escaped assessment in any half-year, the Secretary may at any time within 4 years from the date on which such person should have been assessed, serve on him a notice assessing to the tax or fee due and demanding payment thereof within fifteen days from the date of such service and thereupon the provisions of this Act and there rules made thereunder shall, so far as may be apply as if the assessment was made in the half- year to which the tax or fee relates.” The said provision enables the Municipality to assess the tax for the escaped portion only and that too as to a period from 4 years prior to the said assessment only and does not enable the Municipality to have a re-assessment of the entire building including the escaped portion as well as the previously assessed portion. At the hearing from the side of Counter Petitioner no provision of law enabling the Municipality to have a re-assessment of the entire building in 2005 with retrospective effect from 1999 for the entire building is apparently not sustainable and is liable to be set aside and the assessment as to the escaped area of 389 sq. meters only will be sustainable and that too for the period from 4 years prior to the said assessment only. The Revision Petition is to be allowed and the Counter Petitioner is to be directed to rectify the error as pointed out above. In the result, the Revision Petition 22/2007 is allowed and the 2005 re-assessment as far it relates to the portion of the building already assessed as well as that as to the escaped portion of 389 sq. meters for the period prior to 4 years from the date of the said assessment are set aside and the Municipality is directed to rectify the errors in the assessment strictly as per the provisions in Section 282 of the Kerala Municipality Act as found above without any unnecessary delay.' I am of opinion that the property tax is leviable only on the w.p.c.33175/07 - : 3 :- annual rental value and not on the plinth area. The original assessment was taking into account the annual rental value. As such, the Vigilance and Anti Corruption Bureau or anybodyelse could not have validly stated that 389 sq.m. of the plinth area escaped assessment, unless they have a case that the annual rental value was not assessed correctly, which case nobody has. Therefore, according to me, the very action of the Municipality in revising assessment on the ground that 389 sq.m. of the plinth area escaped assessment is totally without jurisdiction. As such, even Ext.P4 order may not be strictly sustainable insofar as the reassessment itself was unsustainable. But, respondents 1 and 2 have not chosen to challenge Ext.P4 on that ground. In the above circumstances, I do not find any merit in the writ petition and accordingly, the same is dismissed. Sd/- sdk+ S.SIRI JAGAN, JUDGE ///True copy/// P.A. to Judge