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2006 DIGILAW 262 (KER)

Radhakrishnan v. State of Kerala

2006-05-23

K.M.JOSEPH

body2006
Judgment :- 1. Since these Writ Petitions are connected, they are disposed of by a common Judgment. The case of the petitioner in W.P.(C) No.22355/04, in brief, is as follows: He constructed a residential building in the year 1992-1993. It had a plinth area of 105 M. Sq.Ext.P1 is the plan. He filed return under the Kerala Building Tax Act. A site inspection followed and there was verification of the measurement. He was served with Ext.P2 order of assessment and Ext. P3 notice of demand. He paid the amount of Rs.500/- in two equal instalments, in compliance with the same. Exts.P4 (a) and P4 (b) are the receipts. In 2001, he made an additional construction having a plinth area of 172.38 Sq. Metres.Ext.P2 is the plan showing the proposed extension. He was again served with Ext. P6 demand notice. As it is a one time tax, without challenging the same, he paid the entire amount vide Ext. P7 receipt. He was however served with a demand under S.5A informing that he was liable to pay luxury tax as "residential building" with a plinth area of 294.56 Sq. Metres had been constructed by him on or after 01/04/1999 and he was asked to pay luxury tax for the period 2002-2003 at the rate of Rs.2000/- in lump vide Ext.P8. He filed Ext.P9 appeal. It was rejected by Ext.P10. Petitioner filed a revision. It was rejected by Ext.P11. It was rejected on the ground that the petitioner had not attached the assessment order, the appeal was not attached and the remittance of building tax receipt was not produced. Petitioner paid the luxury tax for two years covering the period 2000-2002. He cured other defects and he preferred another revision challenging Ext.P10. Ext.P12 is a receipt. Ext.P13 is a revision petition. It was rejected stating that the earlier revision having been rejected, it is not possible to accept a revision against the said order (Ext.P14). Petitioner challenges Exts.P8, P10, P11 and P14 orders and seeks a prohibition against collection of luxury tax. 2. The contention of the learned counsel for the petitioner, in short, is that the petitioner cannot be mulcted with the liability to pay luxury tax. S.5A of the Kerala Building Tax Act reads as follows: "5A. Petitioner challenges Exts.P8, P10, P11 and P14 orders and seeks a prohibition against collection of luxury tax. 2. The contention of the learned counsel for the petitioner, in short, is that the petitioner cannot be mulcted with the liability to pay luxury tax. S.5A of the Kerala Building Tax Act reads as follows: "5A. Charge of luxury tax:- (1) Notwithstanding anything contained in this Act, there shall be charged a luxury tax of two thousand rupees annually on all residential buildings having a plinth area of 278.7 Sq. Metres or more and completed on or after the 1st day of April, 1999, (2) The luxury tax assessed under this Act shall be paid In advance on or before the 31st day of March, every year." 3. The date mentioned is 1.4.1999. Petitioner does not dispute that the total plinth area of the building as originally constructed along with the additions made to it is such that his contention if otherwise rejected, he is liable to luxury tax. His contention is that in order to make a building exigible to luxury tax, the entire building must have been constructed and completed after 1.4.1999. He had constructed a house in the year 1992-1993. S.5A has no retrospective operation, it is contended, and therefore, excluding the portion as it existed prior to 1.4.1999, the size of the building was such that it did not attract the provisions of S.5A of the Act runs the contention. He relied on the decisions of this Court in Abdul Rasheed v. Tahsildar (2005 (2) KLT 819) and Gopalakrishnan v. Tahsildar (1995 (2) KLT 37). On the other hand, learned Government Pleader would submit that there was no case of separate unit. Petitioner has paid the building tax. In such circumstances, it is indeed exigible to luxury tax, it is contended. In Gopalakrishnan v. Tahsildar (1995 (2) KLT 37), this Court held that an assessment has already been made and completed, the assessee cannot be subjected to re-assessment unless the Statute permits that to be done. In other words, where an assessment had already been completed prior to coming into force of the amendment, re-assessment under the amended provision will be bad." 4. In other words, where an assessment had already been completed prior to coming into force of the amendment, re-assessment under the amended provision will be bad." 4. In Abdul Rasheed v. Tahsildar (2005 (2) KLT 819), the question which arose for consideration was whether the construction of three floors in a case where the initial construction was prior to the appointed day, attracts S.5(3) or 5(4). The Court took the view that S.5(4) is attracted only when both the initial construction and the extension/improvement is after the appointed day. 5. In the facts of this case, what is stated is that the petitioner has constructed the house building during the year 1992-1993. After 01/04/1999, it is the admitted case that he has constructed the first floor having a plinth area, according to his pleadings, of 172.38 Sq. Metres to the existing building. The question in this case is not whether S.5(3) or 5(4) of the Kerala Building Tax Act is attracted. The question is whether, in view of the fact that he has not put up a construction having a plinth area of more than 278.7 Sq. Metres, he is liable to pay luxury tax. Luxury tax under S.5A is attracted in cases where the construction of a residential building having a plinth area of 278.7 Sq. Metres is completed on or after 01/04/1999. The argument of the petitioner is that unless a person completes construction of a new building having a plinth area of 278.7 Sq. Metres on or after 1.4.1999, he cannot be made liable to pay luxury tax under S.5A. Admittedly, he has not put up a new construction having a plinth area of 278.7 Sq. Metres after 1.4.1999. Petitioner is sought to be made exigible to luxury tax on the footing that the total plinth area of the building taking in the original construction made by him during 1992-1993 and the addition of the first floor made by him after 1.4.1999 is more than 278.7 Sq. Metres and therefore he is liable to pay luxury tax. Learned Government Pleader emphasised that the building is only one unit. It is not as if there is another building put up, but this is an addition to the existing building and, therefore, since the construction has been completed exceeding the limit fixed in S.5A after 1.4.1999, petitioner is exigible to luxury tax, it is contended. 6. Learned Government Pleader emphasised that the building is only one unit. It is not as if there is another building put up, but this is an addition to the existing building and, therefore, since the construction has been completed exceeding the limit fixed in S.5A after 1.4.1999, petitioner is exigible to luxury tax, it is contended. 6. Every statute affecting a substantive legal right or liability will be presumed to be prospective. The contention of the learned counsel for the petitioner is that being a substantive liability, it has to be presumed that S.SA is clearly prospective and cannot, therefore, fasten liability on the petitioner in the admitted facts of this case. There is an annual recurring liability. I hasten to add that the learned counsel for the petitioner agreed during the course of the argument that the Court can proceed oh the basis that the total plinth area of the building can he taken as one which attracts S.5A in terms of the plinth area, if his contention about retrospectivity is rejected. 7. The words used in S.5A bring about a charge of luxury tax on every building which is completed having the plinth area mentioned in the said Section. Admittedly, the construction made by petitioner after 1.4.1999 is in the form of an addition to an existing building. In other words, what the petitioner has done is that he has added a further construction to an existing construction, the result of which was the plinth area of the total structure was ill excess of the area mentioned in S.5A of the Kerala Building Tax Act. There was only one unit. No doubt, the words of S.5A are not that a construction made after 1.4.1999 is made exigible to luxury tax. On the other hand, S.5A employs the words "completion of a construction after 1.4.1999". Even then, it is contended that the words "completed on or after the 1st day of April, 1999" must be taken to mean that the completion must be of a building having the total plinth area of 278.7 Square Metres." The language used in the Section is that a building must be completed with the requisite area after 1.4.1999. Certainly, it is a provision which creates a substantive liability for a perennial liability is created to pay the amount mentioned in the Act, if S.5A is attracted. Certainly, it is a provision which creates a substantive liability for a perennial liability is created to pay the amount mentioned in the Act, if S.5A is attracted. The building housing the first floor was already completed admittedly much earlier and tax was also collected on the basis of the same. If that be so, what is completed after 1.4.1999 is a building having the plinth area which falls short of the plinth area mentioned in S.5A. In other words, a building having a plinth area of 278.7 Sq. Metres cannot be said to have been completed after 01/04/1999 in the facts of this case. As already found, the ground floor was already completed much prior to 1.4.1999. If that be so, in view of the fact that the Section is not retrospective, but only prospective, the building in question cannot be rendered exigible to luxury tax. Accordingly, the Writ Petition is liable to be allowed. I do so. The impugned Exts.P8 and P10 shall stand quashed and there will be a direction not to collect luxury tax in respect of the building in question. W. P. (C) No.28655/04 8. In this Writ Petition what is challenged is Ext.P1 notice of demand for payment of building tax. The facts of this case have already been set out in this Judgment. What the petitioner seeks to challenge is the order demanding payment of building tax consequent upon his having put up the additional construction in the year 2001. Ext.P1 is dated 17.3.2001. It is stated that since Ext.P1 was a one time tax, without challenging the same, he remitted the entire amount. It is consequent upon his being served with Ext.P2 notice calling upon him to pay the luxury tax that it is stated that he was constrained to challenge Ext.P1 Notice. It suffices to dismiss the Writ Petition to note that Ext.P1 is dated 17.3.2001 and the Writ Petition was filed more than three years after, namely on 29.9.2004. Even otherwise, I do not think that the petitioner has made out a case for interference under Art. 226 of the Constitution of India, with Ext.P1, particularly, since I have proceeded on the basis of the submission of the learned counsel for the petitioner that the plinth area as calculated by the respondents represents the correct position in facts. I find no merit in this Writ Petition and it is dismissed.