IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 22ND JUNE 2010 / 1ST ASHADHA 1932 WP(C).No. 28845 of 2003(H) -------------------------- PETITIONER(S): --------------- 1. N.PADMINI AMMA, ANNAPOORNA HOUSE, MANAKKADU, THODUPUZHA. 2. K.SAROJINI AMMA, KONATH VEEDU, THODUPUZHA. 3. K.P.SREEKUMARI AMMA, KONOTH HOUSE, THODUPUZHA. 4. D.RAGHUNATHAN NAIR, KONOTH VEEDU, THODUPUZHA. 5. K.P.SIVADAS, KONOTH VEEDU, THODUPUZHA. 6. P.D.SASEENDRANATHAN NAIR, KONOTH VEEDU, THODUPUZHA. 7. K.VIJAYASEKHARAN NAIR, KONOTH VEEDU, THODUPUZHA. BY ADV. SRI.C.K.VIDYASAGAR SRI.T.I.ABDUL SALAM RESPONDENT(S): --------------- 1. STATE OF KERALA, REPRESENTED BY THE SECRETARY (TAXES), GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. THE TAHSILDAR, THODUPUZHA. 3. DISTRICT COLLECTOR, IDUKKI. GOVERNMENT PLEADER SRI.K.P.PRADEEP THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 22/06/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).28845/03 2 APPENDIX PETITIONER'S EXHIBITS:- EXT.P1:- TRUE COPY OF AGREEMENT DT.10.5.99 EXT.P2:- TRUE COPY OF AGREEMENT DT.16.11.2000 EXT.P3:- TRUE COPY OF APPLICATION DT.30.12.2000 WITH RETURN SUBMITTED BY THE 1ST PETITIONER BEFORE R2 EXT.P4:- TRUE COPY OF APPLICATION DT.30.12.2000 WITH RETURN SUBMITTED BY THE 2ND PETITIONER BEFORE R2 EXT.P5:- TRUE COPY OF APPLICATION DT.30.12.2000 WITH RETURN SUBMITTED BY THE 3RD PETITIONER BEFORE R2 EXT.P6:- TRUE COPY OF APPLICATION DT.30.12.2000 WITH RETURN SUBMITTED BY THE 4TH PETITIONER BEFORE R2 EXT.P7:- TRUE COPY OF APPLICATION DT.30.12.2000 WITH RETURN SUBMITTED BY THE 5TH PETITIONER BEFORE R2 EXT.P8:- TRUE COPY OF APPLICATION DT.30.12.2000 WITH RETURN SUBMITTED BY THE 6TH PETITIONER BEFORE R2 EXT.P9:- TRUE COPY OF APPLICATION DT.30.12.2000 WITH RETURN SUBMITTED BY THE 7TH PETITIONER BEFORE R2 EXT.P10:- TRUE COPY OF APPLICATION DT.28.2.2001 FILED BY THE 7TH PETITIONER BEFORE R2 EXT.P11:-TRUE COPY OF ORDER OF ASSESSMENT WITH NOTICE OF DEMAND DT.10.4.02 OF R2 ISSUED TO 1ST PETITIONER EXT.P11(a):-TRUE COPY OF ORDER OF ASSESSMENT WITH NOTICE OF DEMAND DT.10.4.02 OF R2 ISSUED TO 2ND PETITIONER EXT.P11(b):-TRUE COPY OF ORDER OF ASSESSMENT WITH NOTICE OF DEMAND DT.10.4.02 OF R2 ISSUED TO 3RD PETITIONER EXT.P11(c):-TRUE COPY OF ORDER OF ASSESSMENT WITH NOTICE OF DEMAND DT.10.4.02 OF R2 ISSUED TO 4TH PETITIONER EXT.P11(d):-TRUE COPY OF ORDER OF ASSESSMENT WITH NOTICE OF DEMAND DT.10.4.02 OF R2 ISSUED TO 5TH PETITIONER EXT.P11(e):-TRUE COPY OF ORDER OF ASSESSMENT WITH NOTICE OF DEMAND DT.10.4.02 OF R2 ISSUED TO 6TH PETITIONER EXT.P11(f):-TRUE COPY OF ORDER OF ASSESSMENT WITH NOTICE OF DEMAND DT.10.4.02 OF R2 ISSUED TO 7TH PETITIONER EXT.P12:-TRUE COPY OF NOTICE DT.3.6.03 BY THE 1ST PETITIONER BEFORE R2 EXT.P13:-TRUE COPY OF OBJECTION DT.30.6.02 BY 1ST PETITIONER BEFORE R2 EXT.P14:-TRUE COPY OF PROCEEDINGS DT.28.7.03 OF R2 EXT.P15:-TRUE COPY OF ORDER OF ASSESSMENT DT.28.7.03 OF R2 EXT.P16:-TRUE COPY OF NOTICE OF DEMAND DT.28.7.03 OF R2 RESPONDENT'S EXHIBITS:- NIL OKB //TRUE COPY// P.A. TO JUDGE C.K.ABDUL REHIM, J. ----------------------------------- W.P.(C).No.28845 of 2003 ----------------------------------- Dated this the 22nd day of June, 2010 J U D G M E N T ---------------------- 1. Challenge in this writ petition is against Exts.P15 and P16, order of assessment and notice of demand respectively, issued under the Kerala Building Tax Act, 1975. Petitioners 1 to 7 are owners of different extents of properties, which are lying adjacent to each other. Petitioners jointly applied and obtained Building Permit for construction of a multi-storied commercial building in the properties. Before starting construction petitioners executed Ext.P1 agreement, which reveals decision to have the construction done jointly. Ext.P2 is another agreement executed and registered after completion of the construction, wherein ownership of distinct floors and portions of the building was assigned to each of the petitioners. 2. Assessment under the Kerala Building Tax Act W.P.(C).28845/03 -2- was completed on the basis of separate returns submitted by the petitioners, Exts.P3 to P9, treating portions of the building owned by each of the petitioners as separate units. Ext.P11 series are the orders of assessment and notices of demand. The entire amounts due under the assessment was remitted by the petitioners. After lapse of more than one year, the petitioners were served with Ext.P12 notice stating that on verification of the records it is revealed that there occurred an error in the assessment which had caused loss to the Government to the extent of Rs.80,775/-, and therefore the 2nd respondent is proposing to revise the assessment under Section 15 of the Act. The petitioners were called upon to submit objections if any against such proposals. Petitioners submitted Ext.P13 reply denying the allegation that there is error in the assessment. According to the petitioners, there is independent and separate ownership for each portions of the building which were assessed separately. 3. Without accepting objections raised by the W.P.(C).28845/03 -3- petitioners, the 2nd respondent issued Ext.P14 proceedings holding that separate assessment is not sustainable because going by terms of Circular No:9051/S3/81/TD dt.28.3.1990 issued by the Government such assessment is permissible only if there is a registered agreement executed prior to commencement of the construction, and in this case Ext.P2 agreement was executed and registered only after completion of the construction. In Ext.P14 it is further stated that the District Collector through his proceedings dt.23.7.2003 had directed the 2nd respondent to make assessment of the building treating it as a single unit. Hence the assessment was revised and Ext.P15 order of assessment and Ext.P16 notice of demand were issued for payment of the balance amount on the basis of assessment completed treating the entire building as a single unit. Petitioners are challenging Exts.P14, P15 and P16. 4. Heard Sri.T.I.Abdul Salam, learned counsel appearing for the petitioner and Sri.K.P.Pradeep, Senior W.P.(C).28845/03 -4- Government Pleader on behalf of respondents. Contention of the petitioner is mainly that the impugned proceedings is beyond the power of rectification conferred on the 2nd respondent under Section 15 of the Act. It is also contended that the building in question will fall within the category of Explanation 2 to Section 2(e) of the Kerala Building Tax Act. 5. In the counter affidavit of the 2nd respondent it is stated that, after completion of assessment, on verification it was found that Ext.P2 agreement is not in conformity with the requirements of Government Circular dt.28.3.1990, and under such circumstances the District Collector invoking suo moto power of revision provided under Section 13 had issued orders for completing fresh assessment for realising the short levy of building tax to the tune of Rs.18,775/-, and the impugned assessment is made accordingly. 6. On a scrutiny of the proposal notice (Ext.P12) it is evident that only a rectification under Section 15 of the W.P.(C).28845/03 -5- Act was proposed and objection was called for only on that proposal. The ground enumerated for the proposed rectification was that on verification of the records it is found that the assessment was completed erroneously and such assessment had resulted in causing loss to the Government. But in Ext.P14 the 2nd respondent had deviated from the stand. The reason enumerated therein is that, the building could not be considered as separate units because it does not satisfy the stipulations in the Government Circular. Further in Ext.P14 reference is made about the proceedings of District Collector, purported to have been issued under Section 13. I am of the opinion that the impugned order is not sustainable under either of the powers conferred on the authorities. The first question to be considered is as to whether there exist any error apparent on the face of record, which can be rectified under Section 15 of the Act. This court in the decision in M/s.Bavasons Constructions (P)Ltd. v. State of Kerala (2007 (3) KLT 101) had occasion to consider sustainability W.P.(C).28845/03 -6- of rectification under Section 15 for the reason of non- conformity with the very same circular issued by the Government. It is held that the assessing authority shall not be guided by any instructions issued by any superior officers or by the Government and that the circular of the Government to the effect that the unregistered agreement entered into between the builders and allottees of flats should be ignored as illegal and unsustainable. On the facts of this case, the assessing authority while completing assessment at the first instance had treated the building as separate units, falling under Explanation 2 to Section 2(e) of the Act. There is no case for the assessing authority that there occurred any manifest or apparent error on the face of the record with respect to such assessment. Therefore even if there is no compliance with the terms of the Government Circular, no rectification under Section 15 is possible on that ground. The non-satisfaction of the stipulations in the circular by itself could not be treated as an error apparent on the face of records, as contemplated W.P.(C).28845/03 -7- under Section 15. 7. The next question to be considered is as to whether there was any suo moto revision by the District Collector. For the first time in Ext.P14 the 2nd respondent reveals that the District Collector had issued a proceedings on 23.7.2003. The respondent has no case that any notice with respect to such an exercise of revisional power was issued at any point of time to the petitioners. The first proviso to Section 13 prohibits the District Collector from passing any order under sub-section (1) of Section 13, without notice to the party who may be affected by such order. Further it is noticed that under Section 13(2) the District Collector can exercise the power of suo moto revision only with respect to orders passed within a period of three months previously. Going by Ext.P11 series, it is clear that the assessments were completed as early as on 10.4.2002. As per Ext.P14, proceedings of the District Collector is dated 23.7.2003. Therefore it is evident that the District Collector has not exercised any power of suo W.P.(C).28845/03 -8- moto revision within the time limit prescribed under Section 13(2). Further, it is not possible for the respondent to initiate simultaneous proceedings both under Section 13 and under Section 15 with respect to the very same assessment. 8. Result of the above discussion is that the impugned assessment is not sustainable either as a rectification made under Section 15 or as a revision under Section 13 of the Act. Therefore the impugned proceedings Ext.P14, P15 & P16 are liable to be quashed. Hence the writ petition is allowed and Exts.P14, P15 & P16 are hereby quashed. C.K.ABDUL REHIM, JUDGE. okb