IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 29188 of 2010(W)
1. BHARATH SANCHAR NIGAM LIMITED,
... Petitioner
Vs
1. THE TAHASILDAR, ERANAD TALUK, ERANAD,
... Respondent
2. THE REVENUE DIVISIONAL OFFICER,
3. THE DEPUTY TAHASILDAR (RR),
4. THE DISTRICT COLLECTOR, MALAPPURAM
For Petitioner :SMT.S.K.DEVI
For Respondent : No Appearance
The Hon'ble MR. Justice C.K.ABDUL REHIM
Dated :26/10/2010
O R D E R
C.R.
C.K.ABDUL REHIM, J.
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W.P.(C).No.29188 of 2010
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Dated this the 26th day of October, 2010
J U D G M E N T
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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
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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
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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
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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).
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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
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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
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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