Appulli Gopalakrishnan vs Tahasildar and Others

K. Narayana Kurup, J.—Petitioner is the owner of a lodging house called ''Sasta Tourist Home'' at Mannarghat. It is a two storied building arid was constructed stage by stage. The construction started in 1983. After completion of the ground floor and the first floor, as per Ext. P-1, the Petitioner was assessed to building tax under the Kerala Building Tax Act then in force for a sum of Rs. 8,000. This amount was paid by the Petitioner and he started construction of the Second floor. Meanwhile, the first Respondent-assessing authority issued Ext. P-2 notice u/s 9(2)/9(4) of the Kerala Building Tax Act, 1975 proposing to reassess the building and asking the Petitioner to produce all documents relating to capital value of the building and title deed of the property. On receipt of Ext. P-2, the Petitioner produced all the documents before the first Respondent-assessing authority as also Ext. P-3 representation requesting him to drop the proceedings proposed as per Exp. P-2 However, the first Respondent, without considering the various points raised in Ext. P-3, passed Ext. P-4 printed, stereotyped order directing the Petitioner to pay a sum of Rs. (sic) as building tax. Aggrieved by Ext. P-4, Petitioner approached the second Respondent-revisional authority as per Ext. P-5 who as, per Ext. P-7, dismissed the same simultaneously vacating the stay ordered as per Ext. P-6 during the pendency of the revision.

Aggrieved by Ext. P-7, Petitioner moved the third Respondent-Government as per Ext. P-8 petition. (such a petition though shown in the index is not seen in the body of the O.P.). The third Respondent, however, rejected Ext. P-8. Ext. P-9 is the valuation report submitted by the Petitioner in respect of the building prepared by the Executive Engineer (Valuation). Since the Petitioner was aggrieved by the orders of the Respondents, viz., Exts. P-1, P-4 and P-7, he moved this Court in O.P. No. 4425 of 1989, which was disposed of by Ext. P-10 judgment dated 21st February 1993 holding that the capital value fixed by the Respondents is basically incorrect and the annual value of the building fixed by the local authority is relevant, although it can be departed from for sufficient reasons. In Ext. P-10 judgment, there is a specific finding that the assessing authority did not show the basis on which the capital value was sought to be revised at Rs. 9,75,600 and it was the revisional authority/second Respondent for the first time chose to disclose those details.

Petitioner''s main grievance is that the basis of the assessment was not disclosed in Ext. P-1 original order of assessment nor in Ext. P-2 notice proposing to revise the assessment nor in Ext. P-4 order enhancing the assess ment. It is under these circumstances that this Court as per Ext. P-10 judgment remitted the matter back to the first Respondent-assessing authority for making a fresh assessment in the matter after affording an opportunity of being heard to the Petitioner. Pursuant to. Ext. P-10 judgment, the first Respondent passed Ext. P-11 order saddling the Petitioner with liability to pay a sum of Rs. 88,800 in four equal quarterly instalments. Thereafter, Petitioner filed Ext. P-12 revision petition before the Respondent, who as per Ext. P-13, dismissed the same confirming Ext. P-11 order of the first Respondent.

The prayer in the Orginal Petition is for the issuance of a writ of certiorari to quash Exts. P-11 and P-13 orders of the first and second Respondents respectively and for other incidental reliefs.

The first Respondent has filed a counter affidavit justifying Exts. P-11 and P-13. Having heard learned Counsel on both sides and having perused the pleadings and having bestowed my anxious consideration on the entire gamut of the case, I am of the view that the Petitioner is entitled to succeed in this Original Petition for more than one reason.

First of all it has to be seen that this Court as per Ext. P-10 judgment remitted the matter back to the first Respondent for making a fresh assessment in the matter after affording an opportunity of being heard to the Petitioner. The grievance of the Petitioner is that the basis of assessment was not disclosed to him by the assessing authority while passing Exts. P-2 and P-4 and that it made it''s appearance for the first time in Ext. P-7 order of the second Respondent-vide penultimate paragraph thereof. Petitioner has a specific case that the method adopted for calculating the capital value is wrong as the assumptions made that all the rooms, single, double and family, will be let out on all the 365 days in the year and that the rent at the rates mentioned in Ext. P-7 is being received for the rooms are all erroneous and based on mere surmises. According to the Petitioner, these facts were not put to him at any point of time and therefore he had no opportunity of rebutting the same. According to the Petitioner, the capital value has to be fixed with reference to other relevant factors like cost of construction, annual value fixed by the local authority, etc. Petitioner has a further case that the re-opening of the assessment for the first two floors was also without jurisdiction, as there was no error apparent on the face of the record in relation to the original assessment. completed by the first Respondent-assessing authority. It was after taking note of all these facts that this Court as per Ext. P-10 judgment quashed the assessment and revisional orders and remitted the matter back to the first Respondent for making fresh assessment in the matter after affording an opportunity of being heard to the Petitioner.

From a perusal of the counter affidavit filed by the first Respondent, it is not clear whether the Petitioner was informed of the basis of assessment by the assessing authority affording him an opportunity of rebutting the same. All that the counter affidavit states is as follows:

The case was remitted back to the assessing authority for fresh assessment as per Ext. P-10 order. Accordingly the Petitioner was given opportunity of being heard. As per the Kerala Building Tax (Amendment) Act, 1992, published in Government notification No. 4064/Leg. Al/92/Law, dated 1st April 1992, the building taxis chargeable based on the plinth area of the building. Instructions have been issued by Government to assess the building tax of the buildings constructed prior to the appointed day, but the assessment of which has not been initiated or completed or against which appeal or revision has been filed at the rates specified in the amended Act. There were directions from this Honourable Court also to assess or reassess building tax of such buildings as per the latest rules. Therefore the building owned by the Petitioner was reassessed based on the plinth area rules, by which the amount assessed became Rs. 88,800. Of the above, the Petitioner remitted Rs. 23,000 already. Deducting that amount the Petitioner is liable to remit Rs. 65,800 as balance." (vide paragraph 7 of the counter affidavit)

From a reading of Ext. P-10 judgment, the first Respondent had a duty to inform the Petitioner the basis for enhancement of assessment, so as to afford the Petitioner an opportunity rebutting the same. Since this has not been done, I am of the view that the impugned orders passed pursuant to Ext. P-10 judgment cannot be legally sustained.

Secondly, going by the counter affidavit, the revision of assessment as per Ext. P-4 order was made "within the ambit of para 15(1) of the Act and the mistake crept while computing the capital value on the basis of rent derived was rectified". Obviously, the attempt of the Respondent was to rectify the mistake apparent on the face of the record by acting u/s 15 of the Kerala Building Tax Act. There is a catena of decisions to the effect that the provision enabling rectification of mistakes has to be invoked only in cases of obvious, patent mistakes and not to correct mistakes which can be established by a long drawn process of rea oning as has been done in the instant case (vide paragraph 7 as extracted above)-See in this connection The Asok Textiles Ltd. v. The Income Tax Officer Alwaye 1956 KLT 207 and Abdul Rahim Haji Jacob Sait, v. The Commissioner of Income Tax 1972 K.L.J. 121. It has also to be noted that there is a distinct difference between the re-opening of assessment and the rectification of a mistake in it apparent from the record. It is nowhere provided in the Kerala Building Tax Act for re-opening of an order of assessment and to substitute it with a fresh order on a different basis-see in this connection rousef v. State of Kerala 1993 (2) KLT 59.

There is yet another reason why the Petitioner shall succeed in this Original Petition. By Ext. P-7 order of the second Respondent, dated 6th September 1986 the order of assessment stands completed. Thereafter, is it possible for the assessing authority to undertake an exercise of re-assessment under the amended provisions of the Kerala Building Tax (Amendment) Act, 1992 published in Government notification No. 4064/Leg. A1/92/Law, dated 1st April 1992 under which the building tax is chargeable based on the plinth area of the building, whereas prior to that amendment as noticed above, building tax is chargeable based on the capital value of the building. Admittedly, the amended provision making the plinth area as the basis of assessment came into force after the assessment in this case attained statutory finality. There is a well settled principle against interference with the vested rights by subsequent legislation unless the legislation has been made retrospective expressly or by necessary implication. If an assessment has already been made and completed, the Assessee cannot be subjected to re-assessment unless the statute permits that to be dons. In other words, where an assessment has already been completed prior to coming into force of the amendment, re-assessment under the amended provision will be bad- see Controller of Estate Duty, Gujarat I, Ahmedabad Vs. M.A. Merchant, Accountable Person of Late Shri A.G. Merchant, Majirajwadi Road, Bhavnagar and Others, The result, therefore, is that the Petitioner is not liable to be assessed, on the plinth area basis, on the other hand, I am of the view that he is liable to be assessed adopting capital value as the basis assuming that on the facts disclosed such reassessment is permissible.

In the light of the above discussion, I hold that the impugned orders evidenced by Exts. P-11 and P-13 cannot be sustained. Exts. P-11 and P-13 are accordingly quashed. However, I make it clear that the Respondents will be at liberty to pass fresh assessment orders against the Petitioner after disclosing to the Petitioner the basis of enhancement of assessment as directed in Ext. P-10 judgment.

The Original Petition is allowed as above.

*A reproduction from ILR (Kerala Series).