IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE ACTING CHIEF JUSTICE MR.J.B.KOSHY & THE HONOURABLE MR. JUSTICE V.GIRI WEDNESDAY, THE 25TH FEBRUARY 2009 / 6TH PHALGUNA 1930 WA.No. 2597 of 2007(E) ---------------------- {IN WPC.21614/2007 OF THIS COURT) .................... APPELLANT(S): PETITIONER ---------------------------------------------- MOOPAN MOTORS PVT. LTD., AYYANTHOLE, THRISSUR, REP. BY ITS CHAIRMAN AND MANAGING DIRECTOR, M.A.M.BABU MOOPAN RESIDING AT 35/1617 B, JAWAHARLAL NEHRU STADIUM ROAD, PALARIVATTOM, KOCHI-682025. BY ADV. SRI.P.M.POULOSE RESPONDENT(S): RESPONDENTS ------------------------------------------------------ 1. THE TAHSILDAR, THRISSUR. 2. VILLAGE OFFICER, AYYANTHOLE, THRISSUR DISTRICT. BY GOVERNMENT PLEADER FOR TAXES SRI.K.B.PRADEEP THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 25/02/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J.B. KOSHY, Ag.C.J. & V.GIRI, J. ------------------------- W.A.No.2597 of 2007 ------------------------- Dated this the 25th day of February, 2009. JUDGMENT Koshy, Ag.C.J. The appellant is a company engaged in the sales and after sales service and repair of Toyota vehicles. The building (show room etc.) owned by the appellant as assessed under the Kerala Building Tax Act {for short “the Act”}, during the year 2005. The total plinth area was 3529.14 sq.m. The assessing authority found that 1287 sq.m is being used a workshop and therefore, that area cannot be assessed and exempted the same under Section 3(1)(b) of the Act. The balance is 2242.14 sq.m. The tax assessed was at Rs.4,74,750/-. That was paid by the appellant. Ext.P7 notice was issued, purported to be under Section 15 of the Act, stating that certain discrepancies have been noticed in the assessment and that there is a proposal to re-assess the tax imposed on the building. Section 15(3) of the Act clearly says that the assessee should be given an opportunity to show cause, if there is a proposal to enhance the tax. A notice, W.A.No.2597 of 2007 :: 2 :: which merely says that the assessment needs re-assessment is not a notice in accordance with law. Section 15(3) of the Act reads as follows: “Where any such rectification has the effect of enhancing the assessment or reducing a refund, the assessing authority shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable; and such notice of demand shall be deemed to be issued under Section 10 and the provisions of this Act shall apply accordingly.” 2. In Ext.P7, the assessing authority has not shown why the tax should be enhanced. Therefore, Ext.P7 is invalid for re-opening the proceedings under Section 15 of the Act. Ext.P7 reads as follows: “Attention is invited to the reference cited above. As per Reference (1) Order, your building was assessed with Tax of Rs.4,74,750/- (Four lakhs seventy four thousand seven hundred and fifty only). As some discrepancies have been noticed in the assessment as per Reference (2), it has become necessary to conduct re-assessment. Therefore, it is proposed to re-assess the tax imposed on your building as per Section 15 of the Kerala Building Tax Act, 1975. If you have any objections the same will be heard at 11 AM on 15th W.A.No.2597 of 2007 :: 3 :: June 2007 at this office. On failure Tax will be re- assessed on the presumption that you have no objections to submit.” 3. Notice under Section 15(3), without disclosing reason for rectification by which an assessee is burdened is denial of an effective opportunity and it cannot be treated as a valid notice at all, as stated by this court in Shajahan v. Tahsildar {2000(2) KLT 143}. It is contended that another mode of assessment is not a matter for rectification of the error, because change of method of assessment is not a matter that can be done in a rectification order under Section 15 of the Act. By way of rectification, another method of assessment can be adopted or re-assessment cannot be made as held in P.P.Yousef and brothers v. State of Kerala {1993(2) KLT 59}. Audit objection (ref.2 in the notice) also can be a ground for rectification of the error. If assessment is rectified on the basis of an 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, as held in Kurian George v. Tahsildar {1995(2) KLT 457}. There is no provision in the Act for re-opening an assessment, which has already W.A.No.2597 of 2007 :: 4 :: been concluded, except by way of an appeal/revision/rectification as specifically mentioned in the Act. In Ext.P9, it is stated that the plinth area was increased stating that assessment for a total area of 3690.96 sq.m is necessary. It is also noticed that an additional shed has been newly constructed measuring to 161.82 sq.m. Nothing is mentioned in Ext.P7 regarding these matters. Assessment on new additional construction under Section 5(3) is different from rectification of a mistake under Section 15 of the Act. It is the contention of the appellant that there is no newly constructed area liable to tax. Learned single Judge also held that workshop and service station are to be exempted from assessment. Only if the claim for exemption is disputed, there is necessity for reference to the Government under Section 3(2) and merely because the claim for exemption is allowed without referring the matter to the Government, it cannot be stated that there is a mistake apparent on the face of the record warranting rectification. In any event, we have already held that in view of the deficiency in the notice, as no reasons are stated in Ext.P7, it cannot be termed as a proper W.A.No.2597 of 2007 :: 5 :: notice under Section 15(3) and the notice itself is illegal. Consequently, Exts.P7, P9 and P10 are set aside. This will not prevent the respondents from taking appropriate proceedings, if tax is payable, if otherwise permissible under law. Writ appeal is allowed. Sd/- (J.B. KOSHY) ACTING CHIEF JUSTICE Sd/- (V.GIRI) JUDGE sk/ //true copy// P.S. to Judge