IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN MONDAY, THE 12TH DAY OF DECEMBER 2011/21ST AGRAHAYANA 1933 WA.No. 1791 of 2006 ========= AGAINST THE JUDGMENT IN WPC.22966/2004 DATED 14-08-2006 APPELLANT/RESPONDENT ======================= THE MUNICIPAL COUNCIL, MAVELIKKARA MUNICIPALITY MAVELIKKARA REPRESENTED BY ITS SECRETARY. 2 THE SECRETARY, MAVELIKKARA MUNICIPALITY, MAVELIKKARA. 3 THE TAXATION & FINANCIAL COMMITTEE, MUNICIPAL COUNCIL MAVELIKKARA REPRESENTED BY ITS SECRETARY. BY ADV..SRI.M.T.SURESHKUMAR SRI. RASHEED ,SC, MAVELIKARA MUNICIPALITY RESPONDENTS/PETITIONER ======================== K.N.KARTHIKEYAN, KARTHIKA BHAVAN MANNAR MAVELIKKARA. BY ADV.SRI.N.SUKUMARAN (SR.) SRI.S.SHYAM SRI.N.K.KARNIS THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 12-12-2011 ALONG WITH WA NO.168 OF 2007 ,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: jma C.N. RAMACHANDRAN NAIR, & K. VINOD CHANDRAN, JJ ---------------------------------------------------- W.A No.1791 of 2006 & W.A No.168 of 2007 ---------------------------------------------------- Dated this the 12th day of December, 2011 J U D G M E N T C.N. Ramachandran Nair , J This is the fourth round of litigation challenging property tax assessment in respect of bar hotel building and other three buildings in the same compound belonging to the same person located in the heart of the Mavelikkara Municipality. Each time when notice was issued proposing assessment of the buildings, petitioner has been filing writ petitions before this Court and after disposal of the last of the three writ petitions filed, the Municipal Council refixed the tax for all the buildings in appeal by order dated 8.7.2004 which was also challenged in W.P(C) No.22966/2004 filed by the building owner. The learned Single Judge set aside Ext.P14 appellate order of the standing committee and again remanded the matter for fresh decision by taking into account the Government Order stating that the increase shall not be more than 25% of the previous tax. It is against this judgment both W.A Nos.1791/2006 & 168/2007 : 2 : the building owner as well as the Municipality has filed separate writ appeals. 2. We have heard the senior counsel Sri.N. Sukumaran appearing for the hotel building owner and Advocate C.Rasheed appearing for the Municipality. The first controversy raised is that the tax originally assessed with effect from 1.4.1989 should not have been revised through Ext.P2 proceedings initiated by the Municipality, because the assessment was applicable to first five years and the period was not over when Ext.P2 notice was issued. However, the Municipality took a stand that the building had only 4000 square feet completed construction at the time of assessment and it is thereafter the building owner made further construction completing the building with a plinth area around 50000 square feet where a bar hotel is started. The case of the building owner is that building originally constructed in 1989 remains the same and no more addition or modification is made for revising the assessment in 1991 as proposed vide Ext.P2. These issues were considered and decided in three writ petitions filed earlier and under last W.A Nos.1791/2006 & 168/2007 : 3 : judgment this Court directed the Standing Committee to consider the appeal and decide after hearing the appellant. Consequently Ext.P14 appellate order was issued. Therefore, what we propose to do is to consider Ext.P14 on merits. We have heard the learned counsel appearing for both sides. It is seen that the disputed assessment falls within two periods starting from 1.4.1990 onwards and next period commencing from 1.4.1993 onwards. Therefore, the law applicable is the provisions of the Kerala Municipalities Act, 1960 which under section 100 provides for assessment of the buildings for tax based on the gross annual rent at which the building is reasonably expected to be let from month to month or from year to year. Obviously, while making assessment the location of the building, the nature of use, rental and other income from the building are matters which should weigh with the authority making assessment. In this case it is the statement of the Standing Committee that the building is located in the heart of the Municipal town and it is very close to the bus stands operated by the KSRTC and also by the private operators. Further, from the details of the main building it is W.A Nos.1791/2006 & 168/2007 : 4 : seen that it is a bar hotel with three floors with ten rooms and halls besides the air conditioned bar hall, reception counter, parking facility etc. The tax assessed for this building from 1.4.1990 is only Rs.18,389/- and from 1.4.1993 tax assessed is only Rs. 26,907/-. Considering the location and nature of use of the building that is running a profitable business like bar hotel, we do not find any justification to interfere with the assessment so made. The petitioners contentions that increase in tax should not exceed Government Orders issued in this matter does not find any support from the provisions of the statute and is made on the assumption that the previous tax assessed is reasonable and fair. In this case, what we notice is that the building itself is constructed in 1989 and business commenced only thereafter. So much so, we do not find any justification to interfere with the appellate order re-fixing tax based on Government Orders with regard to the percentage of increase that is permissible while making quinquennial revision of tax. 3. So far as other buildings are concerned, we notice that one building assessed is the one which has four rooms let W.A Nos.1791/2006 & 168/2007 : 5 : out for a textile show room and the first floor is let out to a Commercial Bank. Yet another building is one which is used as an office for the petitioner to run the hotel and with other facilities. Another building assessed is a kitchen with three rooms. On the whole, we notice that the annual tax assessed for these buildings are paltry sums of Rs.74 and Rs.282/- which are increased to Rs.102/- and Rs.386/-. So far as other two buildings are concerned the tax assessed on 1.4.1990 was Rs.2375/- and 4642/- and thereafter increased to Rs.5480/- and 7560/-. The tax assessed and re-fixed for the above periods by Ext.P14 by any standard cannot be said to be high or arbitrary. We therefore, do not find any justification to remand the matter a 4th time again for hearing. It is seen that section 223B of the 1994 Act, is amended for making assessment of rate of tax fixed by the Government. If the Government have not fixed the same, section234 authorises Municipality to fix the tax based on location, nature of use and rentals and other income received and by examining accounts. The Municipality is free to re-fix the tax from 1997 onwards, and if not so far done on account of the W.A Nos.1791/2006 & 168/2007 : 6 : pendency of the above two appeals they can still do it. For the reasons stated above we dismiss Writ Appeal No. 168/2007 filed by the petitioner/appellant and we allow the writ appeal No.1791/2006 filed by the Municipality by vacating the judgment and by restoring Ext.P14 order of the Municipal council. Sd/- C.N. RAMACHANDRAN NAIR(Judge) Sd/ K. VINOD CHANDRAN(Judge) jma //true copy// P.A to judge