T.L. VARKEY v. TAHSILDAR

T.R.RAMACHANDRAN NAIR, J.= = = = = = = = = = = = = = = = =O.P. No. 10590 of 2001 - I. = = = = = = = = = = = = = = = = = Dated this the 13th day of November, 2007.J U D G M E N TThe petitioners are aggrieved by Ext.P10 and P10(a) order ofassessment under the Building Tax Act followed by the notice of demand.The case of the petitioners is that they are the joint owners of 48.75 cents ofland comprised in Survey No.235/3 and 234/4 of Aluva West Village. Thepetitioners are partners of a firm by name 'United Wood and MetalIndustries'. For developing the area the firm applied and obtainedpermission from the Aluva Municipality for construction of a three storeyedcommercial complex. Ext.P2 is the building permit. They entered into anagreement with a company by name 'Build 'N' Style Projects Pvt. Ltd' as perExt.P3. At the time of filing of the Original Petition the floor work upto thefirst floor was over. Ext.P4 is the occupancy certificate issued by the AluvaMunicipality. The petitioners have given in the writ petition the names ofpersons who are the buyers of the built up areas in the basement and groundfloor. It is stated that the cost of construction was met by respective allottees. 2.By Ext.P6 notice the first respondent directed the petitioners tosubmit their return for the purpose of assessment of tax. Ext.P7 is their replyand Ext.P8 is the further notice directing them to appear for hearing on O.P. No. 10590 of 2001 - I.221.10.2000. The case of the petitioners is that on the date of hearing theManaging Director of the builder represented the petitioners and pleaded forfinalisation of assessment excluding any liability on the part of thepetitioners, since the built up portions are owned by separate owners. 3.Now going by Ext.P10 the assessment has been finalised bytaking the built up area of 7881 sq. metres., taking the whole plinth area ofsix floors and Rs.13,91,400/- has been assessed as building tax.4.The learned counsel for the petitioners relied upon the decisionsof this Court reported in Bhattathiripad v. Tahsildar (1994(1) KLT 790,S.Balu v. State of Kerala (1994 KLJ (Tax Cases) 278, Kurian George v.Tahsildar (1995(2) KLT 457), Lissy v. Tahsildar (2000(3) KLT 497) and arecent decision in Bavasons Constructions (P) Ltd. v. State of Kerala (2007(3) KLT 101). It is submitted that the assessment has been completedwithout considering the effect of Explanation 2 of Section 2(e) of the KeralaBuilding Tax Act. It is also submitted that different owners have not beenissued notice in the matter before finalising the matter. 5.In Bavasons Constructions (P) Ltd. v. State of Kerala (2007(3)KLT 101), a similar question was considered and the procedure to befollowed was explained in para.9, which reads as follows:“9. The petitioners-builders shall produce materialsbefore the concerned Tahsildars regarding the allotment ofindividual flats to the respective owners. They shall also O.P. No. 10590 of 2001 - I.3produce the agreements entered into with the owners of flatsand also evidence to show that the payments were made by theallottees from time to time to foot the bills for the construction.They shall produce their books of accounts and bankstatements. They shall also produce the deeds, assigning theundivided interest in the property. They shall produce thosematerials before the concerned Tahsildars before 30/04/2007. Ifthose materials are produced to show that the construction ofthe flats is covered by Explanation 2 to S.2(3) of the BuildingTax Act, then, the assessments shall be made separately. Theassessing authorities shall consider the claim relating to eachflat and render a separate speaking decision with reference toeach flat. A common order can be passed for each residentialcomplex. But, in that order, there should be separate findingregarding each flat/apartment. In case any flat is remainingunallotted, the assessment in respect of such flat shall be made,treating the builder as the owner. In case, in relation to aparticular flat, sufficient materials are not produced to supportthe claim for the benefit of Explanation 2 to S.2(e), then also,the assessment shall be made, treating the builder as the ownerof the apartment. While making separate assessments of theflats, the common area shall also be divided on pro rata basis, sothat the entire built up area of the building is assessed tobuilding tax. The petitioners shall also furnish the correctaddresses, as far as possible, of the allottees of the flats, to theassessing authorities. The assessing authorities shall afford anopportunity of being heard to the petitioners-builders and theindividual flat owners and pass final orders in the matter, as faras possible, before 30/07/2007. They shall, as stated earlier,deal with the assessment relating to every flat/apartmentseparately, with reference to the documents produced. In thiscontext, it is apposite to remind the assessing authorities, thepowers conferred on them under S.17 of the Act.”6.The learned Government Pleader points out by referring to thepleadings in the counter-affidavit that the case of the petitioners have notbeen substantiated in the hearing and it is accordingly the assessment wasfinalised. But a reading of the assessment order, does not show that the plea O.P. No. 10590 of 2001 - I.4raised by the petitioners have been considered in the light of the legalprinciples laid down by this Court in the various decisions.7.Therefore, Exts.P10 & P10(a) are quashed. The petitioners shallproduce before the first respondent along with a copy of this judgment, thenames of all persons who, according to the petitioners, are the respectiveowners of various portions of the building for enabling the firstrespondent to issue notice to them and hear them before the assessment isfinalised within one month from today. The first respondent will finalise theassessment after hearing all the parties concerned within a period of fourmonths from thereof. The Original Petition is disposed of as above.T.R.RAMACHANDRAN NAIR, JUDGE.Kvs/-