B. Thankamma v. Corporation Of Trivandrum — 1989 DIGILAW 450 (KER)

JUDGMENT 1. The question arising for consideration is: Is the demand for property tax levied on the building having T.C. No. 23/ 1222, Thampanoor, Trivandrum, housing the Bhaskara Bhavan Tourist Paradise, owned by Bhaskaran Nair, the predecessor-in-interest of the petitioners, barred by limitation. 2. Facts relevant and requisite to decide the point covered by the above question can briefly be stated thus. The property tax for the period from 1st April, 1972 to 31st March 1976 levied on the building, on the basis of the revised annual rental value, was the subject matter of the suit, 0. S.72/77, in the court of the Subordinate Judge, Trivandrum, instituted by Bhaskaran Nair. The suit was decreed. (See Ext. P-1 judgment). The operative portion of the judgment, Ext. P-1 reads:- "In the result, the plaintiff is given a decree against the defendant declaring that the revised assessment of property tax for the building of the plaintiff viz., T. C. 23/1122 Thampanoor, Trivandrum at the rate mentioned in Exhibit A-4 memo, dated 6th August 1976 is illegal and against the provisions of S.102 of the Kerala Municipal Corporation Act. The defendants are restrained by a permanent injunction from taking any steps to recover the tax at the revised rate. But this decree shall not be understood as curtailing rights of the defendant Corporation to make a reassessment as per the provisions of the Act and in the light of this judgment and their right to recover the tax at the rate immediate prior to the refixation. made on 6th August 1976.........". The Corporation challenged the above judgment by filing A. S.175/78 before this court. A Division Bench of this court by judgment dated 10th December, 1984 found that, inasmuch as the order of assessment was one made in violation of principles of natural justice, the same was unenforceable. However, this court reserved the right of the Corporation to make an assessment of the building in accordance with law. A Division Bench of this court by judgment dated 10th December, 1984 found that, inasmuch as the order of assessment was one made in violation of principles of natural justice, the same was unenforceable. However, this court reserved the right of the Corporation to make an assessment of the building in accordance with law. A reference in this connection to the following observations of the Division Bench is profitable:- "We also make it clear that the judgment in this appeal does not preclude the authorities from making a fresh assessment for the relevant period according to law." The proceedings, the predecessor-in-interest of the petitioners had initiated prior to Ext, P-1 suit are not relevant for the purpose of deciding the issue and therefore the facts relevant thereto are not recapitulated here. However it is relevant to note that the predecessor-in-interest of the petitioners as stated in the counter affidavit, had paid a portion of the demand dated 17th August 1976 after the withdrawal of the first suit with liberty to file the suit evidenced by Ext. P-1 judgment. Thereafter the Commissioner, the second respondent issued Ext. P-2 notice, dated 28th July 1987 under R.7(b) of II Schedule of the Kerala Municipal Corporations Act, for short The Act, informing the heirs of Bhaskaran Nair that their revision petition challenging the levy will be considered if the same reaches his office within 15 days from the date of the notice. Ext. P-3 is the explanation given by the heirs of deceased Bhaskaran Nair. The Commissioner thereafter issued Ext. P-4 memo informing the petitioners that they are liable to pay the amount made mention of therein. 3. The learned counsel for the petitioners submits that the demand for tax for the period from 1972-73 to 1st April 1985 is based on the amended property tax assessment book. The tax which is now sought to be recovered however had fallen due prior to the amendment introduced to the property tax assessment book. The amended property tax assessment book, going by R.8 of the Second Schedule of the Act can be said to have taken effect only on the first day of the half year in which it is made, the counsel submits. The amended property tax assessment book, going by R.8 of the Second Schedule of the Act can be said to have taken effect only on the first day of the half year in which it is made, the counsel submits. The Rule which is read hereunder, supports the above submission, "The Commissioner may after giving notice to the parties concerned and hearing their objection, if any, amend the property tax assessment books at any time between one general revision and another by inserting therein or removing therefrom any property or by altering the valuation of any property or the amount of tax. Such amendment shall be deemed to have taken effect on the first day of the half-year in which it is made: Provided that except in a case of revision which is necessitated by re-construction of, or improvements or additions to buildings or by clerical or arithmetic error when the amendment is made in any half year after the demand notice for that half-year has been issued, it shall have effect only from the succeeding half-year." However for want of materials the issue highlighted by the counsel in the course of his argument, I could not decide. The same therefore is left open. 4. Now coming to the main question, whether demand is barred by limitation, it is necessary to refer to some of the relevant sections of the Act. They are S.417, 108 and R.29 and 30 of II Schedule. S.417 reads:- "Limitation for recovery of dues.-No distraint shall be made, no suit shall be instituted and no prosecution shall be commenced in respect of any sum due to the corporation under this Act after the expiration of a period of three years from the date on which distraint might first have been made, a suit might first have been instituted or prosecution might first have been commenced, as the case may be, in respect of such sum." The unambiguous and plain words employed in this section would indicate that no steps to recover sums due to the Corporation under the Act can be had after the expiration of a period of three years from the date on which distraint might first have been made, a suit might first have been instituted or prosecution might first have been commenced as the case may be, in respect of such sum. The prohibitive words employed in the section would make the above intention of the legislature clear. It is therefore necessary to find out as to when the property tax that will be assessed on a building situated within the jurisdiction of the Corporation would become due. S.106 of the Act requires to be considered in this connection. It reads:- "Property tax when payable:-The property tax shall be levied every half-year and shall, save as otherwise expressly provided in Schedule II, be paid by the owner of the assessed premises within thirty days after the commencement of the half year." That means, the property tax shall be levied every half year and the said tax, the owner of the property is bound to pay within thirty days after the commencement of the half year. Failure to pay the tax within the time stipulated under S.106 will result in the authority concerned initiating recovery proceedings under Part VI of the II Schedule. R.29 of Part VI provides that if it is found that the tax has not been paid by the owner, the Commissioner shall cause to be served upon or sent to the person a bill for the sum due before proceeding to enforce the provision of R.30. The bill shall be signed by the Commissioner and shall contain a statement of the period and a description of the occupation property or thing for which the tax is charged and other particulars of the demand and also a notice of the liability which may be incurred in default of payment. Sub-rule 3 of R.29 provides that where a notice or bill referred to in sub-rule (1) has not been served or given either in the half year in which the tax became due or in the succeeding half year, the tax for the half year first mentioned in the sub-rule shall not be demanded. Sub-rule 3 of R.29 provides that where a notice or bill referred to in sub-rule (1) has not been served or given either in the half year in which the tax became due or in the succeeding half year, the tax for the half year first mentioned in the sub-rule shall not be demanded. If the amount due as per the bill envisaged under R.29 is not paid within thirty days from the service of the notice or if the person from whom the tax is due has not shown cause to the satisfaction of the Commissioner, why he did not pay, then the Commissioner can recover the same by distraint under his warrant and sale of the movable property of the defaulter or if the defaulter is the occupier of any building or land in respect of which a tax is due, by distress and sale of any movable property which may be found in or on such building or land. If for any reason the distraint, or a sufficient distraint of the defaulter's property is impracticable, the Commissioner has the power to prosecute the defaulter before a Magistrate. Yet another mode of collection is by instituting a suit in a civil court (refer to Rule 30). No prosecution however, can be had unless the complaint in this regard is made within six months from the commission of the offence. Similarly no suit to enforce the charge created on the buildings in respect of taxes imposed on the annual value of the building (section 105 of The Act) can be had after the expiry of 12 years when the money sued for becomes due. (Vide Art.62 of the Limitation Act). It should in this connection be remembered that no period of limitation for such a suit is prescribed under the Act. Anyway no such provision has been brought to my notice. The These modes of recovery unless they are resorted to before the expiration of a period of three years from the date on which the recovery for the first time could be had under R.30 read with R.29 of II Schedule, will be time barred. (Section 417). The petitioner however, has no case that the demand for the period from 1st April 1985 is time barred. In fact the petitioner, it is submitted, has paid the said dues. 5. (Section 417). The petitioner however, has no case that the demand for the period from 1st April 1985 is time barred. In fact the petitioner, it is submitted, has paid the said dues. 5. The above position notwithstanding the learned counsel for the Corporation argued that the demand made under Ext. P-4, inasmuch as the same is made pursuant to the directions contained in Ext. P-1 judgment and affirmed by this court (see judgment in A.S. 175/78), cannot be said to be time barred. On a perusal of the judgment it could be seen that the above argument is not sustainable because the assessment, as per the directions of this court, must be one made in accordance with law. The Corporation therefore could make an assessment provided the same is sustainable under the Act. As already noted, the assessments could be had only under the provisions in S.102. Levy of tax on the basis of the assessment should satisfy the requirements of S.106. while collections could be had as per the provisions of II Schedule. It is relevant in this context to note that an assessment once made shall continue in force until it is revised and until the revised assessment takes effect. (See R.6 of II Schedule). That means, until the revised assessment takes place in accordance with the provisions of the Act, the levy of tax shall be continued on the basis of the old assessment. The revised assessment will come into force only in the half year in which the revision is made, is relevant to be noted in the context. The above argument therefore is liable to be rejected. 6. I shall now consider the question whether the proceedings proposed by Ext. P-4 for recovery of the disputed tax is barred by limitation. From the facts stated supra it could be inferred that recovery of the tax arrears for the period from 1972-73 to 1st April 1985 as provided under R.29 except by suing in a civil court (sub-rule 3) is barred by limitation. However the facts now available on record are not sufficient to decide the issue whether a suit to recover the said arrears is barred by limitation. The said issue therefore is left open. However the facts now available on record are not sufficient to decide the issue whether a suit to recover the said arrears is barred by limitation. The said issue therefore is left open. I wish to make it clear that this judgment will not stand in the way of the Corporation instituting a suit for recovery of the arrears of tax provided the same is not barred by limitation. While considering the question relating to the bar of limitation, the Corporation shall keep in view the relevant observations contained in this judgment. The O. P. is allowed to the above extent. No costs.