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1971 DIGILAW 339 (KER)

KALLARA PANCHAYAT v. STATE OF KERALA

1971-12-15

P.GOVINDA NAIR

body1971
Judgment :- 1.The petitioner Panchayat assessed the 3rd respondent to building tax under the Kerala Panchayats Act, 1960, in an appeal taken from the order of the Executive Officer of the Panchayat. That order of the Panchayat is Ext. P9 which merely stated that the Panchayat did not find any reason to interfere with the decision of the Executive Officer. The 3rd respondent appealed to the Deputy Director of Panchayats and the Deputy Director of Panchayats by Ext. P10 order after narrating the history of the proceedings also declined to interfere without stating any reasons for upholding the assessment made by the Panchayat. The 3rd respondent took up the matter in revision before the Government under S.144 (3) of the Kerala Panchayats Act, 1960 and the Government by Ext. P11 order set aside Exts. P9 and P10 orders and directed the Panchayat to assess the buildings in question on the basis of the 'fair-rent' fixed by the junior Engineer whose certificate was produced for the first time before the revisional authority. The Panchayat has impugned this order Ext P11 on three grounds; (1) that the order has been passed in excess of the powers of the Government under sub-section (3) of S.144 of the Kerala Panchayats Act, 1960 and (2) that the Government erred in admitting additional evidence in revision which was not produced by the 3rd respondent at any earlier stage, and (3) that the basis of the order of the State Government is wrong because the second proviso to R.4 of the Kerala Panchayats (Building Tax) Rules, 1963 has been applied by the Government to the buildings in question which do not belong to a class that are not ordinarily let. 2. The concerned buildings are three in number. They bear numbers K. P. 246/3 which is used for the residence of the third respondent, K. P.430/3 & 430A used by the 3rd respondent as his dispensary (the 3rd respondent appears to be an Ayurvedic Physician and the third, bearing K.P.431/3 consisting of 11 rooms rented out to different persons. The assessment was for the period of five years, 1963 64 to 1967 68. The provision under which such an assessment could be made is S.68 of the Kerala Panchayats Act, 1960 which is in these terms: "68. The assessment was for the period of five years, 1963 64 to 1967 68. The provision under which such an assessment could be made is S.68 of the Kerala Panchayats Act, 1960 which is in these terms: "68. Building tax: (I) Every Panchayat shall in accordance with the rules prescribed for the purpose levy a tax on all buildings (other than huts and buildings exempted by the provisions of this Act) in the Panchayat area, at such percentage of the net annual rental value of the building as may be fixed by the Panchayat by resolution, subject to a maximum of ten per cent and a minimum of four per cent. (2) The building tax shall be levied annually and be payable in two equal half-yearly instalments. (3) The building tax, and the surcharge on building tax, if any, levied under S.73, shall subject to the prior payment of the land revenue, if any, due to the Government in respect of the site of the building, be a first charge upon the building and upon the moveable property, if any, found within or upon the same and belonging to the persons liable to such tax. (4) The Government may make rules providing for (i) the manner of ascertaining the net annual rental value of buildings or the categories into which they fall for the purposes of taxation; (ii) the persons who shall be liable to pay tax and the giving of notices of transfer of buildings; (iii) the grant of exemption from tax on the ground of poverty; (iv) the grant of vacancy and other remissions; and (v) the circumstances in which and the conditions subject to which buildings constructed, reconstructed or demolished or situated in areas included in, or excluded from. the Panchayat area during any half year, shall be liable or cease to be liable to the whole or any portion of the tax. (5) If the occupier of a building pays the building tax on behalf of the owner thereof, such occupier shall be entitled to recover the same from the owner and may deduct the same from the rent then or thereafter due by him to the owner." 3. The Panchayat has passed a resolution fixing 10 per cent of the net annual rental value as tax, and rules have been framed indicating the method for ascertaining the net annual rental value of buildings. The Panchayat has passed a resolution fixing 10 per cent of the net annual rental value as tax, and rules have been framed indicating the method for ascertaining the net annual rental value of buildings. The relevant rule is R.4 which along with the first proviso thereto are in these terms: "4. Determination of annual rental value: The net annual rental value of buildings shall be deemed to be the gross annual rent at which they may reasonably be expected to be let from month to month or from year to year, less a deduction of ten percent of such annual rent, and the said deduction shall be in lieu of all allowances for repairs or any other account whatever: Provided that in the case of (i) any Government building; or (ii) any building of a class not ordinarily let, the gross annual rent of which cannot, in the opinion of the Executive Authority be estimated, the annual rental value shall be deemed to be six percent of the total estimated value of the appurtenant land and estimated present cost of erecting the building after deducting for depreciation a reasonable amount which shall in no case be less than tea percent of such cost." 4. It is clear from the rule extracted above that the normal method of determining the annual rental value is to ascertain the gross annual rent at which a building may reasonably be expected to be let from month to month or from year to year. There is no case here that due to any particular feature of the buildings in question they belong to a class which are not ordinarily let. In order that the second clause of the first proviso to R.4 might apply, the buildings must belong to a class which are not ordinarily let. It is not sufficient that the buildings were not intended to be let or that the owner was ordinarily using it for his own purposes. By some inherent nature of the building it must be capable of being grouped with a class which are not ordinarily let. One may think of temples or memorial buildings or churches, religious institutions and buildings of that type. I am fortified in this view by the decisions of the Madras High Court in The General Committee, Madras Club v. The City Municipal Council of Madras reported in (1954) 1 MLJ. One may think of temples or memorial buildings or churches, religious institutions and buildings of that type. I am fortified in this view by the decisions of the Madras High Court in The General Committee, Madras Club v. The City Municipal Council of Madras reported in (1954) 1 MLJ. 671 and in Addison Paints and Chemicals (Private) Ltd., Madras v. The Commissioner, Corporation of Madras reported in (1952) II MLJ. 440. In both those cases the section that was construed was S.100 (2) of the City Municipal Act and the proviso thereto. That section is worded similarly to R.4 and the proviso of the Kerala Panchayats (Building Tax) Rules, 1963. 5. It will be a misapplication of this rule to rely on the second clause of the proviso to buildings such as the one owned by the 3rd respondent which are all capable of being let and which do not belong to a class of buildings which are not ordinarily let. The certificate issued by the Junior Engineer relied on by the State Government in its order Ext. P11 shows that the method of calculation for determining the fair rent adopted by the Junior Engineer has been that provided by the second clause of the proviso. This is not applicable to the buildings in question. Apart from the fact that it was not proper for the revisional authority to allow the production of additional evidence before that authority for the first time the evidence produced was irrelevant for determining the question involved. The certificate also deals only with some of the buildings; K P. 246/3 is not dealt with. In this view, the order Ext. Apart from the fact that it was not proper for the revisional authority to allow the production of additional evidence before that authority for the first time the evidence produced was irrelevant for determining the question involved. The certificate also deals only with some of the buildings; K P. 246/3 is not dealt with. In this view, the order Ext. P11 cannot stand and it is therefore unnecessary to consider the scope of S.144 (3) (c) of the Kerala Panchayats Act, 1960 which is in these terms: "(3) (i) The Government may in their discretion after consulting if they deem fit, the Collector, the Director, Deputy Director or such other officer or authority, at any time, either suo mote or on application call for an examine the record of any order passed or proceedings recorded under the provisions of this Act by (a) ~~~~~~ ~~~~~ ~~~~~ (b) ~~~~~ ~~~~~ ~~~~~ (c) any other authority or officer, for the purpose of satisfying themselves as to the legality or to the propriety of such order, or as to the regularity of such proceeding and pass such order in reference there to as they think fit." 6. I may however add that the power to consider the propriety of an order or the regularity of such proceedings confers wide powers on the State Government but it does not go to the extent of conferring appellate powers. Even in appeal it is seldom that additional evidence is allowed to be let in. In regular suits and appeals therefrom provision has been made under the Code of Civil Procedure for this and only if the conditions prescribed by R.27 f 0.41 are satisfied that additional evidence is permitted to be produced at the appellate stage. Even if those conditions are satisfied, I doubt whether it is appropriate to allow additional evidence to be let in in revisional proceedings. The proper procedure if it was found that there was no material or that additional material was necessary for a fair determination of the question would be to set aside the orders passed by the authorities mentioned in the section and direct a reconsideration of the question after affording opportunity to the parties to adduce fresh evidence. 7. In the light of the above, I set aside the order Ext. P11 and direct the State Government to take back the revision on its file. 7. In the light of the above, I set aside the order Ext. P11 and direct the State Government to take back the revision on its file. As I indicated earlier, the orders Exts. P9 and P10 are bereft of any reasoning. The materials on the basis of which the assessment has been made by the Panchayat are not seen from the order. In fact, it is not known what was the material available before the Panchayat in deciding that the tax that is payable from the three buildings are Rs. 3.24 for K. P. 246/3, Rs. 13.50 for K. P. 430/431A and Rs. 43.20 for K. P. 431. It is no doubt true that the 3rd respondent had not been co-operating. He had not appeared before the Panchayat in spite of notice. He did not care to get represented before the Deputy Director of Panchayats in appeal. 8. If the State Government finds that there is no material available in the records (other than the certificate of Junior Engineer which is not useful) to fairly determine the question, it will set aside the orders of the Deputy Director of Panchayats and of the Panchayat and direct the Panchayat to deal with the question afresh after affording opportunity to the 3rd respondent to adduce his evidence if any. The Panchayat in that event will also make known to the 3rd respondent any material it has. 9. This Original Petition is ordered as above. There will be no order as to costs.