IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 30TH MARCH 2010 / 9TH CHAITHRA 1932 WP(C).No. 26613 of 2007(R) -------------------------- PETITIONER(S): --------------- JOSE, AGED 61 YEARS, S/O. POULOSE, CHEMMANNUR HOUSE, PERAKAM, CHAVAKKAD TALUK. BY ADVS. MR. P.SANTHOSH (PODUVAL) MS. R.RAJITHA RESPONDENT(S): --------------- 1. VILLAGE OFFICER, GURUVAYUR. 2. TAHSILDAR,CHAVAKKAD TALUK. GOVERNMENT PLEADER MR.K.P.PRADEEP THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 30/03/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).26613/07 APPENDIX PETITIONER'S EXHIBITS:- EXT.P1:- TRUE COPY OF SALE DEED NO.519/94 OF KOTTAPADY SRO. EXT.P2:- TRUE COPY OF SLE AGREEMENT DT.6.3.93 EXT.P3:- TRUE COPY OF RENT CHIT WITH RESPECT TO 1ST FLOOR DT.7.7.94 EXT.P4:- TRUE COPY OF DO- DO- DT.1.3.95 EXT.P5:- TRUE COPY OF NOTICE DT.21.6.07 ISSUED BY R2 EXT.P6:- TRUE COPY OF OBJECTION FILED BEFORE R2 DT.24.7.07 EXT.P7:- TRUE COPY OF ORDER DT.25.7.07 ISSUED BY R2 EXT.P8:- TRUE COPY OF DEMAND NOTICE DT.25.7.07 ISSUED BY R2 RESPONDENT'S EXHIBITS:- NIL OKB //TRUE COPY// P.A. TO JUDGE C.K.ABDUL REHIM, J. ------------------------------ W.P.(C).No.26613 OF 2007 ------------------------------ Dated this the 30th day of March, 2010 J U D G M E N T ---------------------- 1. Challenge in this writ petition is against Ext.P7 proceedings issued by the 2nd respondent, purportedly under Section 15 of the Kerala Building Tax Act, 1975. Ext.P8 is the consequential demand issued claiming payment of the balance amount of tax. The building in question is a non- residential building situated in Guruvayoor village. The permit for construction of the building was obtained in the name of the petitioner. The petitioner had executed Ext.P2 Sale Deed and Ext.P3 agreement with his wife Smt.Elamma, transferring undivided share in the property and permitting her to construct first floor of the building. According to the petitioner the Ground Floor of the building was constructed by him and the First Floor was constructed by his wife. Ext.P3 and P4 are copies of rental agreements with respect to portions let out in the first floor of the building by the petitioner's wife. 2. Assessments under the Kerala Building Tax Act W.P.(C).26613/07 -2- was completed by the 2nd respondent on 9.2.2005, separately in the name of the petitioner and wife with respect to the different floor owned by each of them. Both of them had remitted the entire amount of tax assessed. Subsequently, in the year 2007 Ext.P5 notice was issued by the 2nd respondent intimating that pursuant to audit conducted from the office of the Land Revenue Commissioner, it is pointed out that separate assessments allowed in the name of the petitioner and his wife was not proper and there is no proper documents available for treating the building as separate. Therefore the petitioner was requested to produce documents to prove that the building in question is liable to be assessed separately. 3. The petitioner filed Ext.P6 reply stating that the first floor of the building is constructed by his wife after assignment of share in the property and after execution of Ext.P2 agreement. Therefore it is contended that the buildings are liable to be assessed separately. It is also contended that a major portion of the first floor is occupied by the petitioner's wife herself and the area is liable to be exempted from assessment. 4. In Ext.P7 proceedings the 2nd respondent found that the petitioner had failed to establish through any W.P.(C).26613/07 -3- convincing document that the building in question are owned separately by the petitioner and his wife. It is found that, on the basis of assessment made by the Muncipality for levying property tax and on the basis of report submitted by the Village Officer, the building in question belongs to the petitioner. Hence it is found that the building in question is liable to be assessed as a single unit and therefore the amount of tax already paid is insufficient. Accordingly the petitioner was requested to remit the differential amount of tax, to the tune of Rs.27,000/-. The order Ext.P7 as well as the consequential demand is challenged as legally unsustainable. 5. Heard, Sri.Santhosh P. Poduval, learned counsel for petitioner and Sri.K.P. Pradeep, learned Government Pleader appearing on behalf of the respondents. In the counter affidavit filed by the respondents it is contended that Ext.P7 is issued invoking Section 15 of the Act, on the ground that there occurred an error apparent on the face of record while completing the earlier assessment. Learned counsel for the petitioner argued that apart from the question as to whether the building is liable to be assessed as a single unit or not, the question to be considered is as to whether there was any valid ground existed for invoking Section 15 of the W.P.(C).26613/07 -4- Act. The reason stated in Ext.P7 for invoking Section 15 is that the petitioner had failed to produce convincing evidence to prove separate ownership of distinct floors. According to the petitioner, the separate assessment was finalised by the 2nd respondent after being convinced with such documents of ownership. It is argued that no error apparent on the face of the record occurred while completing such assessment. Therefore no legal ground warranting rectification of mistake exists in the case at hand, is the argument. 6. The assessment pertains to a two-storied commercial building. Going by definition of “building” contained in Section 2(e) of the Act, it could not be disputed that the building is liable to be assessed as a single unit. But Explanation 2 to Section (2)(e) of the Act provides that, where a building consists of different apartments or flats owned by different persons and the cost of such construction was met by all such persons jointly, each such apartment or flat shall be deemed to be a separate building. It is held by this court in Lissy Vs. Tahsildar (2000 (3) KLT 497) that the exemption available under Explanation 2 will equally apply to commercial buildings also. In the case at hand the assessment was initially completed treating the building as W.P.(C).26613/07 -5- separate units. Therefore the question to be considered is as to whether the reason mentioned in Ext.P7 to the effect that there was no convincing proof available with respect to separate ownership is an error which is apparent on the face of the record which can be rectified invoking Section 15 of the Act. In a landmark decision of this court in Kurian George Vs. Tahsildar (1995 (2) KLT 457) a Division Bench of this court had enumerated illustrations as to what can be considered as a mistake apparent from the record and what should not be considered as a mistake as contemplated in Section 15. The extract of such illustrations contained in paragraph 17 of the said decision is quoted below:- (2) Usually, the following mistakes are considered to be “mistakes apparent from the record”. (a) Arithmetical error (b) Clerical error (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) Where in 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 W.P.(C).26613/07 -6- 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 view 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 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 of existence of such alternative remedies as appeals and revisions. 7. It is to be noticed that Section 15 insists that, before issuing any order rectifying the mistake the assessee should be given a reasonable opportunity of hearing in the matter. Going by Ext.P5 notice and Ext.P7 proceedings, it does not mention anything about rectification of any mistake. On the other hand what is stated in Ext.P7 is that there is a short levy of tax amount and hence the petitioner is liable for payment of the balance. It is also pertinent to note that the W.P.(C).26613/07 -7- reason for making such a demand mentioned in the proceedings is that, objection was raised by the audit team of the Land Revenue Commissioner. It is mentioned that the proceedings was initiated on the basis of the audit report. In Moopan Motors Pvt. Ltd. Vs. Tahsildar (2009 (1) KLT 989) it is held that a notice under Section 15(3), without disclosing the reason for rectification by which an assessee is burdened is denial of an effective opportunity and it cannot be treated as a valid notice. It is further held that if the assessment is rectified on the basis of 'Audit Note', it cannot be stated that there is an error apparent on the face of the record, and it cannot be rectified by using powers under Section 15. Therefore I am of the considered opinion that neither Ext.P5 notice nor Ext.P7 proceedings can be treated as an order issued invoking Section 15 for valid reasons sustainable under law. 8. A learned Judge of this court has occasion to consider an identical issue in the decision reported in Lisha Babu Vs. District Collector (2007 (4) KLT 648). In the said decision it is held that, “the assessing authority has no case that the structure put up after Ext.X1 document had only plinth area in W.P.(C).26613/07 -8- excess of 446.77 M.Sq. The identity of the building, subjected to assessment as per Ext.P5, is not in dispute. The rate of tax applied is not in dispute. The classification of the building as “other building” is also not in dispute. Even if I were to take that any among those four indicie is one, which would have enabled a rectification under Section 15(1) of the B.T.Act, none of those grounds exist.” 9. In the facts of this case also none of the above 4 incidents is in existence which may apparently be cited as an error or mistake which can be rectified under Section 15. Putting up plinth area of a “building”, assessment of which was already completed in the name of another person, with that of the building of the petitioner, is an exercise far away from the scope of rectification of a mistake, which is conferred under Section 15(1) of the Act. Therefore going by the dictum laid in the decisions cited above, the impugned proceedings is unsustainable, is the contention of the petitioner. 10. The learned Government Pleader on the other hand argued that the reason for rectification in the case at hand is a valid reason coming within the illustrations given in the decision of Kurian George's case (cited supra). The earlier assessment was happened to be finalised without application W.P.(C).26613/07 -9- of valid principles of law and therefore it is a mistake apparent on the face of the record, is the contention. As discussed above, the question as to whether Explanation 2 to Section 2(e) will apply or not depends on the factual aspects of ownership and also on the factual aspect as to who had expended for construction of the buildings. If the assessing authority had completed the assessment on the basis of certain factual aspects available at an earlier occasion, can it be rectified under Section 15 on the basis of an allegation that those factual aspects were not sufficient for separate assessment? I do not find any wrong application of law in such manner. Erroneous acceptance of any factual situation cannot be pointed out as a reason for rectification, because the same is not an error apparent on the face of record. Therefore I am not in agreement with the contentions that there is any wrong application of law which warranted invoking of Section 15. 11. Learned Government Pleader attempted to distinguish the facts of Lisha Babu's case (cited supra) from the facts of the case at hand and argued that it is a case where the construction of the additional area was completed after the initial assessment. But I do not think it makes any W.P.(C).26613/07 -10- difference because the structure is one and the same and ownership of distinct area was found to be separate, during the earlier assessment. Since the question is regarding separate ownership which is basically a factual aspect, I am of the considered opinion that it will not come within four corners of an “error or mistake apparent on the record” which is contemplated under Section 15 of the Act. 12. Under the above circumstances I am of the opinion that Ext.P7 proceedings and Ext.P8 demand are not sustainable in law as there exists no valid reason for rectification of mistake under Section 15 of the Act. Consequently the writ petition is allowed and Ext.P7 and P8 are hereby quashed. 13. Needless to say that amount if any deposited towards the disputed demand shall be refunded to the petitioner without any further delay. C.K.ABDUL REHIM, JUDGE. okb