IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.BALAKRISHNAN NAIR & THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS TUESDAY, THE 24TH MARCH 2009 / 3RD CHAITHRA 1931 WP(C).No. 21913 of 2005(H) --------------------------------------- PETITIONER: ------------------- JOY JOSEEPH, S/O.JOSEPH, THOPPIL HOUSE, VELLIAPPALLY, PALA. BY ADVS. MR. MATHEW JOHN, MR.SUJESH MENON V.B. RESPONDENTS: ------------------------ 1. THE DISTRICT COLLECTOR, KOTTAYAM. 2. THE REVENUE DIVISIONAL OFFICER, PALA. 3. THE TAHSILDAR, MEENACHIL. R1 TO R3 BY GOVT. PLEADER MR. MOHAMMED RAFIQ. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24/03/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C). NO.21913/2005-H: APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE BUILDING TAX RECEIPT DTD. 03/01/1996. EXT.P.2: COPY OF THE ORDER OF ASSESSMENT DTD. 22/12/1997 ISSUED BY THE R.3. EXT.P.3: COPY OF THE ASSESSMENT ORDER DTD. 15/02/2001. EXT.P.4: COPY OF THE DEMAND NOTICE DTD. 15/02/2001. EXT.P.5: COPY OF THE NOTICE ISSUED BY THE R.3. EXT.P.6: COPY OF THE OBJECTION OF THE PETITIONER. EXT.P.7: COPY OF THE ORDER OF ASSESSMENT DTD. 20/12/2001. EXT.P.8: COPY OF THE NOTICE OF DEMAND DTD. 20/12/2001. EXT.P.9: COPY OF THE RECEIPT FOR PAYMENT OF THE AMOUNT DTD.15/02/2002. EXT.P.10: COPY OF THE MEMORANDUM OF APPEAL BY THE PETITIONER DTD. 20/03/2002. EXT.P.11: COPY OF THE ORDER DTD. 29/04/2004 BY THE R.1. RESPONDENTS' EXHIBITS: NIL. //TRUE COPY// P.A. TO JUDGE. Prv. C.R K.BALAKRISHNAN NAIR & M.L.JOSEPH FRANCIS, JJ. ========================================= W.P.(C).No.21913 of 2005 - H =============================== Dated this the 24th day of March, 2009. J U D G M E N T Balakrishnan Nair, J. This writ petition has been referred to the Division Bench by the learned Single Judge, doubting the correctness of the decision in Radhakrishnan v. State of Kerala (2007 (4) KLT 149). Before referring to the legal question to be decided, we will first advert to the skeletal facts necessary for the disposal of the writ petition. 2. The petitioner constructed a residential building having a plinth area of 292.64 square metres. The construction was completed in 1996. The building tax leviable under Section 5(1) of the Kerala Building Tax Act, 1975 (hereinafter referred to as “the Act”) was assessed as per Ext.P2 proceedings of the Tahsildar, Meenachil. The said amount was paid by the petitioner. W.P.(C).No.21913 of 2005 - H 2 3. Later, the petitioner made an additional construction to the said building, having a plinth area of 20.77 square metres, making the total plinth area of the building to 313.41 square metres. Under Section 5(4) of the Act, building tax was again assessed and Ext.P4 notice was served on him. He paid the amount so demanded. Later, proposing to levy luxury tax under Section 5A of the Act, Ext.P5 notice was served on the petitioner. He filed Ext.P6 objection. But, overruling his objection, by Ext.P7, he was held liable to pay Rs.2,000/- as luxury tax from the year 2000-01 onwards. Aggrieved by the said levy, he preferred Ext.P10 appeal before the Revenue Divisional Officer. The RDO rejected the appeal. The petitioner attempted a revision before the District Collector and the same was dismissed by Ext.P11 order. Being aggrieved by the levy and collection of luxury tax under Section 5A of the Act, this writ petition was filed. The petitioner relied on the decision of a learned Single Judge of this Court in Radhakrishnan v. State of Kerala (2007 (4) KLT 149). It was a case where a building was constructed in the year 1992-93, having a plinth area of 105 square metres. W.P.(C).No.21913 of 2005 - H 3 Later, the owner made an additional construction. The total plinth area, thereupon, came to be 294.56 square metres. Since the additional construction was completed after 1.4.1999, the petitioner therein was called upon to pay luxury tax. The learned Judge held that Section 5A of the Act does not have any retrospective effect and if only the additional construction made after 1.4.1999 exceeds 278.7 square metres, luxury tax can be collected and that too in relation to the additional plinth area. The learned Judge who heard this writ petition felt that the said decision requires reconsideration. The learned Single Judge took the view that the principle behind sub-section (4) of Section 5 will apply in the case of assessment of luxury tax under Section 5A also. Since the decision in Radhakrishnan's case (supra) failed to advert to Section 5(4), the learned Judge felt that the decision requires reconsideration. 4. We heard Sri.Mathew John, learned counsel for the petitioner and Sri.Mohammed Rafiq, learned Government Pleader for the official respondents. W.P.(C).No.21913 of 2005 - H 4 5. Section 5A of the Act reads as follows: “5A. Charge of luxury tax.-(1) Notwithstanding anything contained in this Act, there shall be charged a luxury tax of two thousand rupees annually on all residential buildings having plinth area of 278.7 square metres or more and completed on or after the 1st day of April, 1999. (2) The luxury tax assessed under this Act shall be paid in advance on or before the 31st day of March, every year”. The building tax under Section 5 cannot be levied in relation to a building constructed before the appointed day. The appointed day is defined under Section 2(a) of the Act, as the date notified by the Government in the official gazette for the said purpose. The Government have notified 10.2.1992 as the appointed day. The other sections relevant for this case are sub-sections (3) and (4) of Section 5. They read as follows: “5.Charge of building tax.- x x x x x x x x x x x x x x x x (3) Where any major repair or improvement is made on or after the appointed day to a building constructed before the said date, building tax shall be payable at the rate referred to in sub-section (1) on the additional plinth area of the building resulting from such repair or improvement. W.P.(C).No.21913 of 2005 - H 5 (4) Where the plinth area of the building, the construction of which is completed after the appointed day is subsequently increased by new extensions of major repair or improvement, building tax shall be computed on the total plinth area of the building including that of the new extension or repair or improvement and credit shall be given to the tax already levied and collected, if any, in respect of the building before such extension, or repair or improvement”. Sub-section (3) says that if additional construction is added to a building constructed before the appointed day, tax can be levied for the additional plinth area. Sub-section (4) says that in the case of a building constructed after the appointed day, in relation to which tax was already assessed, repairs or improvements are made resulting in enhancement of the plinth area, fresh assessment can be made for the total plinth area of the building. While making the assessment, the tax already paid for the existing plinth area shall be given credit to. Going by Section 5A, the said section came into force only on 1.4.1999. So, the said date can be taken as the appointed day for the purpose of charging luxury tax. Therefore, if any additional construction is made on or after 1.4.1999 and if the additional plinth area exceeds 278.7 square metres, luxury tax can be levied for that W.P.(C).No.21913 of 2005 - H 6 area. That means the principle behind Section 5(3) can be made applicable to the levy of luxury tax and not the principle behind Section 5(4). The legislation relating to tax has to be strictly construed. By interpreting and extending the meaning of the words, no new liability can be imposed on the citizen. If the view of the learned Single Judge, who referred the matter is taken as correct, if an additional construction of one square metre is added to an existing building which is having a plinth area of 277.7 square metres at the time of completion of construction before 1.4.1999, the entire building can be assessed to luxury tax. We feel that such an interpretation is unwarranted on the face of the words employed in Section 5A. If any construction is made on or after 1.4.1999 in the form of a new building or an addition to an existing building; and if the plinth area of that construction exceeds 278.7 square metres, it is exigible to luxury tax. The levy of tax on the petitioner, therefore, is unjustified. We are of the view that the view expressed by the learned Judge while referring the case is not the correct view in law. W.P.(C).No.21913 of 2005 - H 7 In the result, the writ petition is allowed. Exts.P7, P8 and P11 are quashed. The amount collected towards luxury tax from the petitioner shall be refunded to him within two months from the date of receipt of a copy of this judgment by the respondents. K.BALAKRISHNAN NAIR, JUDGE. M.L.JOSEPH FRANCIS, JUDGE. bkn/-