IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 26TH OCTOBER 2010 / 4TH KARTHIKA 1932 WP(C).No. 29188 of 2010(W) --------------------------------------- PETITIONER: ------------------- BHARATH SANCHAR NIGAM LIMITED, KOTTACKAL, MALAPPAURAM,REPRESENTED BY ITS ASST. GENERAL MANAGER (PLANNING) P.V.SHEELA DEVI. BY ADV. SMT.S.K.DEVI. RESPONDENTS: ------------------------ 1. THE TAHASILDAR, ERANAD TALUK, ERANAD, MANCHERI-676 508. 2. THE REVENUE DIVISIONAL OFFICER, PERINTHALMANNA-679 522. 3. THE DEPUTY TAHASILDAR (RR), TALUK OFFICE, ERANAD, MANCHERY-676 508. 4. THE DISTRICT COLLECTOR, MALAPPURAM, PIN-676 505. R1 TO R4 BY GOVT. PLEADER SRI. BEJOY CHANDRAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26/10/2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: prv. C.R. C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.29188 of 2010 ------------------------------------------- Dated this the 26th day of October, 2010 J U D G M E N T ---------------------- Petitioner is a company incorporated, which is a Government of India Enterprises, providing Telecommunication service all over the country. Before formation of the petitioner company, the activity in question was being carried out by the Department of Telecommunications, Government of India. The petitioner is now occupying properties and buildings owned by the Department of Telecommunications (DOT) used for providing such facilities. According to the petitioner none of the assets of the DOT has been transferred into the name of the petitioner. Hence, inspite of occupation of various buildings by the petitioner, ownership of such buildings still vests with W.P.(C).29188/10- -2- the Government of India, more precisely with the President of India. 2. The issue involved in this writ petition pertains to assessment of Building Tax under the provisions of the Kerala Building Tax Act 1975 (KBT Act) with respect to a building occupied by the petitioner situated at Kondotty in Malappuram District, in which the Telephone Exchange is housed. The ground floor of the building in question was constructed by the DOT and no assessment was made in view of the exemption provided under Article 285 (1) of the Constitution of India and in view of the exemption provided under Section 3(1)(a) of the KBT Act. Later, the petitioner had constructed two more floors on the existing building, construction of which was completed on 15.11.2000 and 28.12.2001 respectively. 3. On the basis of return filed in Form No:II as provided under the relevant Rules, the 1st respondent finalised the assessment as per Ext.P1 order, without giving exemption for the ground portion owned by the DOT. Ext.P1 order was challenged by the petitioner before the 2nd W.P.(C).29188/10- -3- respondent, the appellate authority. But the appeal was dismissed holding that the petitioner being a company the exemption under Section (3)(1)(a) of the KBT Act is not applicable. 4. According to the petitioner, in Ext.P2 order, the 2nd respondent had omitted to take note of the contention that, the ground floor of the building was not conveyed to the petitioner and that the Central Government still continues to be its owner, and the same is liable to be exempted. Aggrieved by Ext.P2 order, the petitioner filed a rectification application as evidenced from Ext.P3. But without considering pendency of such application, revenue recovery steps were initiated on issuing Ext.P4 and P5 demand notices. Hence the actions in this regard are challenged in this writ petition. 5. Contention of the petitioner is that the assessment ought to have been restricted for the plinth area covered by the first and second floors of the building. It is noticed that while finalising the assessment the entire plinth area of all the 3 floors were taken together and the entire building was W.P.(C).29188/10- -4- assessed as a single unit. If it is evident that the ground floor remained completed prior to occupation by the petitioner and it was constructed by DOT. The said building (the ground floor) is liable to be exempted from payment of tax since it was owned by the Government of India as on the date of completion, which is the taxable event. 6. But the question arises as to what should be the procedure to be adopted for completion of assessment with respect to the additional constructions effected. Going by Section 5(4) of the Kerala Building Tax Act and as settled through various precedents of this court, the proper procedure is to reckon the entire plinth area for the purpose of assessment and to give credit to the tax amount already paid. But the procedure as contemplated under Section 5 (4) will be applicable only in a case where the existing building was completed after the 'appointed day'. Needless to observe that if the ground floor is completed prior to the 'appointed day', then the assessment can be completed only with respect to the first floor and second floor, as contemplated under Section 5(3). W.P.(C).29188/10- -5- 7. On the other hand, if it is found that the ground floor was completed after the appointed day, then the procedure provided under Section 5(4) need be followed. Even assuming that the ground floor portion stood transferred or assigned into the name of the petitioner, even then the petitioner is not liable for payment of building tax with respect to the ground floor, because they were not the owners at the time of completion of the ground floor, which is the point of time of the taxable event. 8. Learned counsel for the petitioner raised an argument that Section 5(4) could not be adopted, since ownership of the building stands distinctly with respect to different floors, completed at different time. But it is evident that the plinth area of the building was subsequently increased by new extension/additional construction and in such case Section 5(4) will be applicable, despite the ownership of distinct area remains with different persons. Therefore, I am of the considered opinion that the assessment need be finalised adopting the procedure contemplated under Section 5(4) itself, if the W.P.(C).29188/10- -6- authority is convinced that the ground floor was completed after the appointed day. 9. The next question arising for decision is as to whether the petitioner is entitled for any credit, in case the assessment is to be completed under Section 5(4). As observed above, there was no tax collected with respect to the ground floor, since it was exempted from payment. But there is no justification for denying benefit of credit to the extent of tax payable to the petitioner, merely because the owner of the existing portion had availed statutory exemption. The wording in Section 5(4), “already levied and collected” should be given a constructive interpretation in such a situation, so as to include in its ambit and purport to give credit also to, tax leviable but exempted. It is more so because, merely because the owner of the existing portion was entitled for exemption from paying tax, the petitioner who had constructed only the additional plinth area could not be mulcted with liability for payment of tax to the existing portion also. 10. The learned counsel for the petitioner had W.P.(C).29188/10- -7- brought to my notice a decision of this court in WP(C). 8449/05 and connected cases wherein it is held that as far as the additions or modifications of a building effected by the BSNL, Section 5(3) and 5(4) of the Act can be invoked and the building can be assessed as and when additions and modifications are made by the petitioner which attract building tax. 11. Under the above narrated circumstances, the writ petition is allowed and Ext.P2 order is hereby quashed. The 2nd respondent is directed to take back the appeal and to dispose of the same afresh, taking note of the observations contained herein above. 12. Fresh orders in this regard shall be issued as early as possible, after affording an opportunity of hearing to the petitioner, at any rate, within a period of one month from the date of receipt of a copy of this judgment. C.K.ABDUL REHIM, JUDGE. okb