IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE A.M.SHAFFIQUE WEDNESDAY, THE 14TH DECEMBER 2011 / 23RD AGRAHAYANA 1933 WP(C).No. 32363 of 2010(U) ------------------------------------------ PETITIONER(S): ------------------------ 1. PAUL PALLIPPATTU, PALLIPPATTU HOUSE, KIDANGOOR, ANGAMALI. 2. T.V.GEORGE, S/O.VARGHESE, AGED 64, THALAPPILLY HOUSE, MAMBRA, MUKUNDAPURAM TALUK. BY ADV. DR.GEORGE ABRAHAM RESPONDENT(S): ------------------------- 1. STATE OF KERALA REPRESENTED BY SECRETARY TO GOVERNMENT, FINANCE DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. TAHSILDAR, TALUK OFFICE, ALUVA. 3. DISTRICT COLLECTOR, KAKKANAD P.O., ERNAKULAM. BY GOVERNMENT PLEADER SRI.JITHESH THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 14/12/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: tss W.P.(C) NO.32363/2010 APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE JUDGMENT DTD. 31.10.2002 IN OP.34134/2001. P2:- COPY OF THE AGREEMENT DTD. 14.12.2009 ADMITTING THAT THE IST PETITIONER HAS ACCEPTED THE VALUE OF FINAL AMOUNT FOR THE 16 ROOMS. P3:- COPY OF THE SALE DEED DTD. 16.4.2010 OF S.R.O. ANGAMALY. P4:- COPY OF THE SALE DEED DTD. 8.1.2010 OF S.R.O. ANGAMALY. P5:- COPY OF THE COMMUNICATION DTD. 6.8.2009 ISSUED BY THE 2ND RESPONDENT TAHSILDAR. P6:- COPY OF THE REPRESENTATION DTD. 15.9.2009 GIVEN TO THE 2ND RESPONDENT BY THE 2ND PETITIONER. P7:- COPY OF THE ORDER OF ASSESSMENT UNDER THE KERALA BUILDING TAX ACT IN FORM NO.V. P8:- COPY OF THE FORM NO.VI ISSUED BY THE TAHSILDAR TO THE IST PETITIONER P9:- COPY OF THE DEMAND NOTICE DTD. 4.10.2010 ISSUED BY THE TAHSILDAR TO THE IST PETITIONER. P10:- COPY OF THE DEMAND NOTICE ISSUED IN FORM NO.X TO THE IST PETITIONER. P11:- COPY OF THE JUDGMENT IN WP(C) 11002/2008 DTD. 21.1.2010. P11:- COPY OF THE ORDER OF THE TAHSILDAR, ALUVA, DTD. 25.2.2011. (IA. NO.4651/2011). RESPONDENT'S ANNEXURES R2(a):- COPY OF THE RETURN DTD. 31.5.2000. R2(b):- COPY OF THE BUILDING PERMIT. R2(c):- COPY OF THE OCCUPANCY CERTIFICATE. R2(d):- COPY OF THE PROCEEDINGS. R2(e):- COPY OF THE ASSESSMENT ORDER. R2(f):- COPY OF THE DEMAND NOTICE. TRUE COPY P.S. TO JUDGE tss A.M.SHAFFIQUE, J. ----------------------------------------------------------- W.P.(C) No. 32363 of 2010 – U ----------------------------------------------------------- Dated this the 14th day of December, 2011 J U D G M E N T The first petitioner is the owner of a property in which a multi-storied commercial complex was constructed. It is said that the 2nd petitioner had purchased about 16 rooms in the said complex. 2. The petitioners challenge the assessment of building tax under the Building Tax Act, 1975 (Kerala) (hereinafter referred as the Act). Petitioners contend that, by an order dated 6.6.2001, tax was assessed for the entire building as one block and when a demand was made, the 1st petitioner filed O.P.No. 34134/2001 before this Court and by Ext.P1 judgment dated 31/10/2002, this Court directed reassessment to be made after giving notice to all the owners of the building. However, it was made clear that service of notice to the Association of the Owners of Flats managing the -2- W.P.(C) 32363/2010 same will be sufficient. But according to the petitioners no such notice was issued. It is stated that only by Ext.P5 dated 06.8.2009 a notice was issued to the 2nd petitioner for enquiry and the 2nd petitioner submitted an objection as Ext.P6 and by Exts. P7, P8 and P9, the assessing authority made an assessment for the entire building as one block fixing the tax at an amount of Rs.8,62,200/- and sought to recover the said amount from the 1st petitioner. Hence the challenge to the assessment and consequent steps for recovery of the Tax. 3. It is inter alia contended by the 2nd respondent that the 1st petitioner had filed a return as Ext.R2(a), on the basis of which assessment was made, and after Ext P1 judgment of this Court, though notice was issued, no evidence was adduced by the present owners to show that they contributed their share towards the cost of construction. Therefore, according to the 2nd respondent, the assessment has been properly made. 4. Heard the learned counsels appearing on either side. It is the case of the first petitioner that he had sold most of the shop rooms even before construction and the said building was constructed with the contribution from the buyers. This is a -3- W.P.(C) 32363/2010 matter which requires evidence. Even though, Ext.P1 judgment was passed on 31.10.2002, notice is seen issued for reassessment only by Ext.P5 dated 06.8.2009 and that too, served only on the 2nd petitioner. This according to the petitioner is not sufficient notice and according to him notice ought to have been issued to all the land owners who were parties in O.P.No.34134/2001 as there was no proper Association of owners during the relevant time. 5. The learned Special Government Pleader Sri. Soyuz, would rely on Ext. R2(d) and contend that the first petitioner had also appeared for the hearing and though an opportunity was given to adduce evidence, except producing a few documents they did not produce materials to prove separate assessments for individual units. The counsel also relied upon a Full Bench decision of this court reported in District Collector Civil Station, Kakkanad and others vs V.K.Sreekumari (2011 (1) KLT 248) in which it is held that : “What is clear from the above provision is that a building irrespective of the number of flats or apartments contained therein, should be assessed as a single unit and the exceptions are only those stated in Explanations 1 and 2 -4- W.P.(C) 32363/2010 stated above. A Division Bench of this court in Shenoy Real Estates (P) Ltd. v. Tahsildar reported in 2004 (1) KLT 133 held that sale of flats by a builder after completion of construction of apartment building to different owners will not justify separate assessment of each flat under Explanation (2) to S.2(e) of the Act. What is to be noted from this judgment is that unless apartment building is constructed by the joint owners by sharing the cost, each and every apartment cannot be assessed as a separate building, no matter the building after construction was sold by the owner to different persons. In this case different ownership for the building happens after completion of construction of the building and, the sale made thereafter to different owners is immaterial for the purpose of assessment. In fact, the incidence of tax is on completion of construction of the building and it is immaterial as to whether the owner retains the building or transfers the same in full or in part or in pieces after completion of construction. Separate assessment of each and every flat is called for only in respect of the constructions covered by Explanations (1) and (2) of S.2 (e). ” -5- W.P.(C) 32363/2010 He also referred to Bavasons Constructions Pvt Ltd vs State of Kerala (2007 (2) KHC 409) to contend that unless materials are produced to justify a separate assessment, the assessing authority cannot be found fault in coming to such a conclusion. He relied upon the following observation in the said judgment: “The petitioners-builders shall produce materials before the concerned Tahsildars regarding the allotment of individual flats to the respective owners. They shall also produce the agreements entered into with the owners of flats and also evidence to show that the payments were made by the allottees from time to time to foot the bills for the construction. They shall produce their books of accounts and bank statements. They shall also produce the deeds, assigning the undivided interest in the property. They shall produce those materials before the concerned Tahsildars before 30/04/2007. If those materials are produced to show that the construction of the flats is covered by Explanation 2 to S.2(3) of the Building Tax Act, then, the assessments shall be made separately.” -6- W.P.(C) 32363/2010 6. Though an alternate remedy by way of an appeal is available this is an instance in which proper notice is not issued to the first petitioner or even the Association of Owners as contemplated in Ext. P1 judgment, which has resulted in violation of natural justice. Hence, it is necessary in the interest of justice that an opportunity should be given to the 1st petitioner to produce necessary materials before the assessing authority in order to show the contributions of the buyers of the property. The 1st petitioner being the owner is bound to produce all such materials to satisfy the assessing authority, in order to avail the exception of separate assessment available under Explanation 1 and 2 to Section 2(e) of the Act. 7. In the above circumstances, the writ petition is allowed with the following directions: 1. That Exts.P7, P8 and P9 are set aside. 2. The 1st petitioner shall produce all necessary materials before the Assessing Authority along with a representation and copy of this judgment within a period of two months from the date of this judgment, without any further -7- W.P.(C) 32363/2010 notice. 3.On receipt of such materials as stated above the Assessing Authority shall after hearing the 1st petitioner, complete the assessment within a further period of two months. If there is failure on the part of the first petitioner to submit the documents as stated above the assessment may be finalised with the available materials. 4. Until the assessment is completed, bank guarantee issued by the second petitioner shall remain in force and on failure to pay the amount assessed, the Bank guarantee can be invoked and balance amount if any recovered in accordance with law. A.M.SHAFFIQUE, JUDGE rka -8- W.P.(C) 32363/2010