Kerala High Court
State Of Kerala vs C. Abdulla on 17 June, 2014
Author: Antony Dominic
Bench: Antony Dominic
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE ANTONY DOMINIC
&
THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN
MONDAY, THE 1ST DAY OF AUGUST 2016/10TH SRAVANA, 1938
W.A.No.2011 of 2015 IN WP(C).8717/2013
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AGAINST THE JUDGMENT IN W.P.(C)8717/2013 of HIGH COURT OF KERALA DATED 17-06-2014
APPELLANTS/RESPONDENTS 1 TO 3 IN THE WPC:
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1. STATE OF KERALA
REPRESENTED BY ITS PRINCIPAL SECRETARY TO GOVERNMENT,
REVENUE DEPARTMENT, SECRETARIAT,
THIRUVANANTHAPURAM - 695 001.
2. THE DISTRICT COLLECTOR, KASARAGOD - 671 121.
3. THE TAHSILDAR
KASARAGOD - 671 121.
BY SRI.P.RAVINDRANATH, SPL. GOVERNMENT PLEADER
RESPONDENTS/PETITIONER & RESPONDENT NO.4 IN THE WPC:
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1. C. ABDULLA
BEVINJA, THEKKILFERRY POST, KASARAGOD - 671 545.
2. CHENGALA GRAMA PANCHAYATH
CHENGALA, KASARAGOD - 671 541,
REPRESENTED BY ITS SPECIAL GRADE SECRETARY.
R1 BY ADV. SRI.S.SANTHOSH KUMAR
R2 BY ADV. SRI.M.S.IMTHIYAZ AHAMMED
R2 BY ADV. SRI.SHIRAZ ABDULLA
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 01-08-2016 ALONG
WITH W.A.1429/14, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
ANTONY DOMINIC & ANU SIVARAMAN, JJ.
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Writ Appeal Nos.2011 of 2015 & 1429 of 2014
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Dated this the 1st day of August, 2016
JUDGMENT
Antony Dominic, J.
These writ appeals are filed by the State of Kerala and its officers challenging the common judgment of the learned Single Judge in W.P.(C)26207/12 and 8717/13 respectively.
2. In the writ petitions, the respective first respondents in these appeals, BOT (Build, Operate and Transfer) contractors, impugned the orders of assessment and consequent demands for tax under the Kerala Building Tax Act, 1975 (hereinafter referred to as 'the Act') in respect of two bus stands and a market which were built and operated by them on the basis of BOT agreements entered into with the Kannur Municipality and Chengala Grama Panchayat.
3. The ground on which the demands were impugned was that the contractors were not owners as defined under Section 2(i) of the Act and that the buildings in question being owned by the W.A.2011/15 & 1429/14 : 2 : local authority concerned, were exempted from tax under Section 3 of the Act, and that, therefore, the impugned demands were illegal. In the common judgment under appeal, though the learned Single Judge accepted the contention of the appellants that the writ petitioners do come within the definition of the term 'owner' as provided under Section 2(i) of the Act, the learned single Judge held that since the buildings in question are exempted from levy of tax under Section 3, the demands are unsustainable. On that basis, the learned Single Judge allowed the writ petitions. It is impugning this common judgment, these appeals are filed.
4. We heard the learned Special Government Pleader appearing for the appellants and the learned counsel appearing for the respondents.
5. While the learned Government Pleader contended that irrespective of the fact whether the buildings are exempted from the purview of the Act, so long as the BOT contractors are owners W.A.2011/15 & 1429/14 : 3 : of the buildings as defined under Section 2(i), they are liable to pay tax due under the Act. On the other hand, referring to the various provisions of the concession agreements which were entered into between the BOT contractors with the Panchayat and the Municipality, as the case may be, counsel appearing for them agreed that the contractors are neither owners nor are they liable for tax having regard to the provisions of the Kerala Building Tax Act.
6. We have considered the submissions made. The issue that arises for consideration is a narrow one, which as stated above, is whether tax as provided under the Kerala Building Tax Act can be levied on the BOT contractors in respect of the bus stands, and the market which they have built and are operating on behalf of the Kannur Municipality and the Chengala Panchayat.
7. The relevant provisions of the Kerala Building Tax Act are Sections 2(i), 3(i) and 5. Making a departure from the conventional W.A.2011/15 & 1429/14 : 4 : concept of ownership, which is confined to the title holder, Section 2(i) shows that owner as defined in the Act includes persons who for the time being are receiving, or are entitled to receive, the rent of any building, whether on his own account or on account of himself and others or as an agent, trustee, guardian or receiver for any other person or who should so receive the rent or be entitled to receive it if the building or part thereof were let to a tenant. This, therefore, means that even an agent or trustee or guardian who receives rent on behalf of him is also an owner for the purposes of the Kerala Building Tax Act. Turning to Section 3(1), the exemption provision, Clause (a) thereof, declares that nothing in the Act shall apply to buildings owned by the Government of Kerala or Government of India or any local authority. Section 5(1) shows that subject to the other provisions of the Act, there shall be charged a tax based on the plinth area on every building the construction of which is completed on or after the appointed day. W.A.2011/15 & 1429/14 : 5 : Section 5(6) shows that the amount of tax due under the Act shall be payable by the owner of the building.
8. From the above provisions of the Act, it is clear that levy of building tax is on building and the liability to pay tax is on the owner as defined in Section 2(i) thereof. It is also evident that if a building is owned by a local authority such as a Municipality or Panchayat, constituted under the Kerala Municipality Act or the Kerala Panchayat Raj Act, such buildings are exempted from the provisions of the Act in view of Section 3(1). Insofar as this case is concerned, we have been taken through the concession agreements that have been entered into between the Municipality and the Panchayat on the one side and the BOT contractor on the other. These agreements enumerate the respective rights and obligations of the parties and the authorization of the BOT contractor to build, operate and transfer the bus stands and the market place till expiry of the concession period. Various provisions are also incorporated W.A.2011/15 & 1429/14 : 6 : in the agreement, providing for payment of revenue to the Panchayat and Municipality and also authorizing the Panchayat and Municipality to suspend and terminate the agreement. All these provisions, therefore, indicate that despite the authoritisation conferred on the contractor for building and operating the bus stands and the market, the Municipality and the Panchayat have still retained the ownership of the building. If the ownership of the building is with the Municipality and the Panchayat, obviously in view of Section 3(1) such buildings stand exempted from the provisions of the Act and cannot be made liable for building tax. The fact the BOT contractor is an owner as defined under Section 2
(i) of the Act is of consequence, because such an owner cannot be made liable to pay tax due since buildings itself are exempted from the Act, as per Section 3.
9. In such a situation, even if we accept the contention of the learned Government Pleader that the BOT contractor, has the W.A.2011/15 & 1429/14 : 7 : attributes of owner as defined in Section 2(i), according to us, the additional requirements for attracting levy, namely, that the building should be liable for tax is not satisfied in this case. In the absence of satisfaction of that essential requirement, the appellants could not have levied building tax on the buildings in question.
10. We, therefore, do not find any illegality in the conclusions of the learned Single Judge that the assessment of building tax in respect of the bus stands and the market built and operated by the BOT contractors is illegal. Therefore, there is no merit in these appeals.
Appeals are dismissed.
Sd/-
ANTONY DOMINIC JUDGE Sd/-
ANU SIVARAMAN JUDGE jes