IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 26613 of 2007(R)
1. JOSE, AGED 61 YEARS,
... Petitioner
Vs
1. VILLAGE OFFICER,
... Respondent
2. TAHSILDAR,CHAVAKKAD TALUK.
For Petitioner :SRI.P.SANTHOSH (PODUVAL)
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice C.K.ABDUL REHIM
Dated :30/03/2010
O R D E R
C.K.ABDUL REHIM, J.
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W.P.(C).No.26613 OF 2007
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Dated this the 25th day of March, 2010
J U D G M E N T
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1. Challenge in this writ petition is against Ext.P7
proceedings issued by the 2nd respondent, purportedly under
Section 15 of the Kerala Building Tax Act, 1975. Ext.P8 is
the consequential demand issued claiming payment of the
balance amount of tax. The building in question is a non-
residential building situated in Guruvayoor village. The
permit for construction of the building was obtained in the
name of the petitioner. The petitioner had executed Ext.P2
Sale Deed and Ext.P3 agreement with his wife Smt.Elamma,
transferring undivided share in the property and permitting
her to construct first floor of the building. According to the
petitioner the Ground Floor of the building was constructed
by him and the First Floor was constructed by his wife.
Ext.P3 and P4 are copies of rental agreements with respect
to portions let out in the first floor of the building by the
petitioner’s wife.
2. Assessments under the Kerala Building Tax Act
W.P.(C).26613/07 -2-
was completed by the 2nd respondent on 9.2.2005, separately
in the name of the petitioner and wife with respect to the
different floor owned by each of them. Both of them had
remitted the entire amount of tax assessed. Subsequently, in
the year 2007 Ext.P5 notice was issued by the 2nd respondent
intimating that pursuant to audit conducted from the office of
the Land Revenue Commissioner, it is pointed out that
separate assessments allowed in the name of the petitioner
and his wife was not proper and there is no proper documents
available for treating the building as separate. Therefore the
petitioner was requested to produce documents to prove that
the building in question is liable to be assessed separately.
3. The petitioner filed Ext.P6 reply stating that the
first floor of the building is constructed by his wife after
assignment of share in the property and after execution of
Ext.P2 agreement. Therefore it is contended that the
buildings are liable to be assessed separately. It is also
contended that a major portion of the first floor is occupied by
the petitioner’s wife herself and the area is liable to be
exempted from assessment.
4. In Ext.P7 proceedings the 2nd respondent found
that the petitioner had failed to establish through any
W.P.(C).26613/07 -3-
convincing document that the building in question are owned
separately by the petitioner and his wife. It is found that, on
the basis of assessment made by the Muncipality for levying
property tax and on the basis of report submitted by the
Village Officer, the building in question belongs to the
petitioner. Hence it is found that the building in question is
liable to be assessed as a single unit and therefore the amount
of tax already paid is insufficient. Accordingly the petitioner
was requested to remit the differential amount of tax, to the
tune of Rs.27,000/-. The order Ext.P7 as well as the
consequential demand is challenged as legally unsustainable.
5. Heard, Sri.Santhosh P. Poduval, learned counsel
for petitioner and Sri.K.P. Pradeep, learned Government
Pleader appearing on behalf of the respondents. In the
counter affidavit filed by the respondents it is contended that
Ext.P7 is issued invoking Section 15 of the Act, on the ground
that there occurred an error apparent on the face of record
while completing the earlier assessment. Learned counsel for
the petitioner argued that apart from the question as to
whether the building is liable to be assessed as a single unit
or not, the question to be considered is as to whether there
was any valid ground existed for invoking Section 15 of the
W.P.(C).26613/07 -4-
Act. The reason stated in Ext.P7 for invoking Section 15 is
that the petitioner had failed to produce convincing evidence
to prove separate ownership of distinct floors. According to
the petitioner, the separate assessment was finalised by the
2nd respondent after being convinced with such documents of
ownership. It is argued that no error apparent on the face of
the record occurred while completing such assessment.
Therefore no legal ground warranting rectification of mistake
exists in the case at hand, is the argument.
6. The assessment pertains to a two-storied
commercial building. Going by definition of “building”
contained in Section 2(e) of the Act, it could not be disputed
that the building is liable to be assessed as a single unit. But
Explanation 2 to Section (2)(e) of the Act provides that, where
a building consists of different apartments or flats owned by
different persons and the cost of such construction was met
by all such persons jointly, each such apartment or flat shall
be deemed to be a separate building. It is held by this court
in Lissy Vs. Tahsildar (2000 (3) KLT 497) that the
exemption available under Explanation 2 will equally apply to
commercial buildings also. In the case at hand the
assessment was initially completed treating the building as
W.P.(C).26613/07 -5-
separate units. Therefore the question to be considered is as
to whether the reason mentioned in Ext.P7 to the effect that
there was no convincing proof available with respect to
separate ownership is an error which is apparent on the face
of the record which can be rectified invoking Section 15 of the
Act. In a landmark decision of this court in Kurian George
Vs. Tahsildar (1995 (2) KLT 457) a Division Bench of this
court had enumerated illustrations as to what can be
considered as a mistake apparent from the record and what
should not be considered as a mistake as contemplated in
Section 15. The extract of such illustrations contained in
paragraph 17 of the said decision is quoted below:-
(2) Usually, the following mistakes are considered to be
“mistakes apparent from the record”.
(a) Arithmetical error
(b) Clerical error
(c) Slip or inadvertent omission in an order or judgment
(d) If the later enactment having retrospective operation
enables an authority to modify or alter the original
assessment order; and
(e) Where in the earlier assessment order no valid principle
of law was applied.
(3) An authority has no jurisdiction to rectify a mistake, if
(a) the authority has passed orders by taking one of the
alternative views, when two views are possible;
(b) the authority has adopted one of the alternative methods
available for assessment of tax according to law and later
W.P.(C).26613/07 -6-
finds that more amount of tax could be obtained by
adopting the alternative method;
(c) a mistake has to be discovered by a long drawn process
of reasoning or examining arguments on points of law
and on facts or when further evidence is required to be
adduced to rectify the mistake;
(4) Re-opening or view of an assessment order is not
permissible if the relevant statute does not confer such
powers on an authority;
(5) Taxing authority is a quasi-judicial authority. Hence no
higher administrative authority or even appellate authority
without hearing the affected party or in the absence of an
appeal can give direction to the assessing authority to pass
orders in one way or the other.
(6) A writ is maintainable even at the notice stage, where
threat of prejudicial action is wholly without jurisdiction.
(7) An order or direction under Article 226 of the Constitution
of India can be issued by the High Court prohibiting an
authority acting without jurisdiction from continuing such
action of existence of such alternative remedies as appeals
and revisions.
7. It is to be noticed that Section 15 insists that,
before issuing any order rectifying the mistake the assessee
should be given a reasonable opportunity of hearing in the
matter. Going by Ext.P5 notice and Ext.P7 proceedings, it
does not mention anything about rectification of any mistake.
On the other hand what is stated in Ext.P7 is that there is a
short levy of tax amount and hence the petitioner is liable for
payment of the balance. It is also pertinent to note that the
W.P.(C).26613/07 -7-
reason for making such a demand mentioned in the
proceedings is that, objection was raised by the audit team of
the Land Revenue Commissioner. It is mentioned that the
proceedings was initiated on the basis of the audit report. In
Moopan Motors Pvt. Ltd. Vs. Tahsildar (2009 (1) KLT
989) it is held that a notice under Section 15(3), without
disclosing the reason for rectification by which an assessee is
burdened is denial of an effective opportunity and it cannot
be treated as a valid notice. It is further held that if the
assessment is rectified on the basis of ‘Audit Note’, it cannot
be stated that there is an error apparent on the face of the
record, and it cannot be rectified by using powers under
Section 15. Therefore I am of the considered opinion that
neither Ext.P5 notice nor Ext.P7 proceedings can be treated
as an order issued invoking Section 15 for valid reasons
sustainable under law.
8. A learned Judge of this court has occasion to
consider an identical issue in the decision reported in Lisha
Babu Vs. District Collector (2007 (4) KLT 648). In the
said decision it is held that,
“the assessing authority has no case that the structure
put up after Ext.X1 document had only plinth area in
W.P.(C).26613/07 -8-
excess of 446.77 M.Sq. The identity of the building,
subjected to assessment as per Ext.P5, is not in dispute.
The rate of tax applied is not in dispute. The
classification of the building as “other building” is also
not in dispute. Even if I were to take that any among
those four indicie is one, which would have enabled a
rectification under Section 15(1) of the B.T.Act, none
of those grounds exist.”
9. In the facts of this case also none of the above 4
incidents is in existence which may apparently be cited as an
error or mistake which can be rectified under Section 15.
Putting up plinth area of a “building”, assessment of which
was already completed in the name of another person, with
that of the building of the petitioner, is an exercise far away
from the scope of rectification of a mistake, which is
conferred under Section 15(1) of the Act. Therefore going by
the dictum laid in the decisions cited above, the impugned
proceedings is unsustainable, is the contention of the
petitioner.
10. The learned Government Pleader on the other hand
argued that the reason for rectification in the case at hand is
a valid reason coming within the illustrations given in the
decision of Kurian George’s case (cited supra). The earlier
assessment was happened to be finalised without application
W.P.(C).26613/07 -9-
of valid principles of law and therefore it is a mistake
apparent on the face of the record, is the contention. As
discussed above, the question as to whether Explanation 2 to
Section 2(e) will apply or not depends on the factual aspects
of ownership and also on the factual aspect as to who had
expended for construction of the buildings. If the assessing
authority had completed the assessment on the basis of
certain factual aspects available at an earlier occasion, can it
be rectified under Section 15 on the basis of an allegation
that those factual aspects were not sufficient for separate
assessment? I do not find any wrong application of law in
such manner. Erroneous acceptance of any factual situation
cannot be pointed out as a reason for rectification, because
the same is not an error apparent on the face of record.
Therefore I am not in agreement with the contentions that
there is any wrong application of law which warranted
invoking of Section 15.
11. Learned Government Pleader attempted to
distinguish the facts of Lisha Babu’s case (cited supra) from
the facts of the case at hand and argued that it is a case
where the construction of the additional area was completed
after the initial assessment. But I do not think it makes any
W.P.(C).26613/07 -10-
difference because the structure is one and the same and
ownership of distinct area was found to be separate, during
the earlier assessment. Since the question is regarding
separate ownership which is basically a factual aspect, I am of
the considered opinion that it will not come within four
corners of an “error or mistake apparent on the record” which
is contemplated under Section 15 of the Act.
12. Under the above circumstances I am of the opinion
that Ext.P7 proceedings and Ext.P8 demand are not
sustainable in law as there exists no valid reason for
rectification of mistake under Section 15 of the Act.
Consequently the writ petition is allowed and Ext.P7 and P8
are hereby quashed.
13. Needless to say that amount if any deposited
towards the disputed demand shall be refunded to the
petitioner without any further delay.
C.K.ABDUL REHIM, JUDGE.
okb