Chairman And Managing Trustee vs Revenue Divisional Officer

Bechu Kurian Thomas, J

Numerous reliefs have been sought in this writ petition which includes a challenge against an assessment order under the Kerala Building Tax Act, 1975 (for short the Act). Challenge is also raised against a communication intimating the rejection of appeal on account of failure to cure the defects pointed out, apart from seeking a declaration that the building constructed as part of a Medical College for teaching purposes, is exempted from the building tax. Yet another relief of a declaration that the proviso to section 11(1) of the Act is unconstitutional is also sought for.

On the basis of a building permit issued in the year 2010, petitioner constructed a non-residential building having an area of 168.38 m2. Petitioner was assessed to tax under the Act for the said construction in the year 2011 as per Ext.P1 and the entire amount of tax was paid. The said building is being used as a Specialty Hospital. Subsequently, petitioner constructed another separate building to be used as a teaching facility attached to the hospital for converting the hospital into a Medical College. On completion of construction, a notice under Section 7(3) and Section 9(2) of the Act was issued on 31.01.2020, calling upon the petitioner to submit a return and to produce records for carrying out an assessment under the Act. In response to the aforementioned notices, a reply was submitted by the petitioner on 10.02.2020 stating that the building constructed by the petitioner is for a teaching hospital recognised by the Central and State Governments and therefore, exempted from payment of tax under the Act. Another detailed objection was also submitted on 28.02.2020 claiming the benefit of exemption under the Act. However, in the return filed by the petitioner, the details of the buildings were shown only as new constructions. Thereafter, by order dated 07.07.2020, the assessing authority assessed the buildings to tax and imposed an amount of Rs.65,90,600/- as building tax.

Challenging the imposition of tax on the building constructed by the petitioner, an appeal was preferred, claiming inter alia, that the order of assessment is not a speaking order, the statutory exemption available to the petitioner was not considered, and also that a building principally used for educational purposes is outside the purview of the tax liability.

While the appeal was pending, the assessing officer is alleged to have issued a predated order as 06.07.2020, with a marginal difference in the tax liability calculated on the basis of an area omitted from calculation. The said order Ext.P12 is alleged as having been issued without authority and without notice. In the meanwhile, on 22.10.2020, the Appellate Authority rejected the appeal stating that the appeal memorandum was not affixed with sufficient stamp of Rs.110/- and that the building tax as per Section 11(1) of the Act which was liable to be deposited at the time of filing the appeal, had not been deposited by the petitioner. Petitioner asserted that, before issuing the impugned communication rejecting the appeal, an opportunity for rectifying the defects was not granted to the petitioner. It was further stated that the time limit for filing an appeal is 6 months with an application for condonation of delay and therefore when the appeal was filed within the timeline provided by the Statute, though with a deficiency, it was incumbent upon the Appellate Authority to intimate the nature of defect to the petitioner.

Sri. George Jacob, the learned counsel for the petitioner apart from assailing the assessment order, contended that the communication/order rejecting the appeal filed by the petitioner is patently illegal and perverse, since the defects noticed on the appeal memorandum ought to have been intimated to the petitioner. It was submitted that, immediately on coming to know about the deficiency, the petitioner had remitted the first instalment of Rs.16,29,900/-on 30.11.2020 by enclosing a demand draft. According to the petitioner, unless an opportunity is granted to the petitioner to make the said deposit and affix the stamp of Rs.110/-, petitioner would be put to great prejudice, since a huge liability has been illegally and contrary to the statutory provisions being imposed upon the petitioner. It was also contended that an application had even been filed seeking a reference to the Government to consider the claim of exemption under the Section 3(1)(b) of the Act.

I have heard the learned Senior Government Pleader, Dr. Thushara James, who contended that the Appellate Authority had no other alternative other than to reject the appeal since the petitioner had failed to remit the mandatory deposit as per Section 11 of the Act. The learned Government Pleader also submitted that the petitioner has a remedy by way of a revision before the Statutory Authority and he can have recourse to the said alternative remedy. It was also contended that the remittance of the 1st instalment itself was after the appeal was rejected and hence the said remittance cannot be considered.

I have considered the rival contentions.

Though the petitioner has an alternative remedy of preferring a statutory revision under Section 13 of the Act since the appeal filed by the petitioner was rejected on the technical plea of failure to cure the defects, this Court felt it proper to entertain this writ petition, especially after noticing the nature of assessment order issued. When an inherently perverse order is brought to the notice of this Court, the discretionary jurisdiction under Article 226 can be used to render relief to the litigant, especially when the order is issued in violation of the principles of natural justice.

A perusal of Ext.P8 order of assessment shows that other than merely filling in the blanks in the form prescribed under the Statute, the respondent had not considered any details relating to the assessment. Though the return of the petitioner mentioned only “new construction”, it is noticed from the subsequent columns that the details of the construction carried out had been attached separately. In column 11 of the return provided for answering the claim whether an exemption is sought, it is also noticed that the petitioner had mentioned the documents apart from attaching other details. None of those details submitted by the petitioner in the return filed finds a mention or a consideration in the assessment order. The impugned order of assessment issued by the second respondent is rendered mechanically and without any application of mind.

It is trite law that every order of assessment must specify the details of the subject being taxed, the reason for issuing the order of assessment and the manner in which the quantum has been arrived at. In cases where a claim for exemption has been raised under Section 3A of the Act, the jurisdiction of the assessing authority to decide or issue an assessment order gets curtailed to a large measure and the same becomes vested with the Government. The very name of the assessee mentioned in the assessment order itself indicates an educational or charitable body. In such circumstances, it was incumbent for the assessing officer to atleast consider whether there was any claim for exemption or even whether he had jurisdiction to impose building tax as per the Statute. The omission to even refer to the details submitted along with the return also indubitably reflects a lack of application of mind. Therefore, though the petitioner preferred a statutory appeal which has been rejected for non-payment of the first instalment of the tax assessed, and for deficient court fee, I am of the view that, since the order of assessment is per se illegal and non-speaking, this Court should interfere in exercise of the jurisdiction under Article 226 of the Constitution of India.

In the decision in Abraham Thomas and Others v. State of Kerala and Others [2012(2) KHC 792], this Court had held that, issuing assessment orders by merely filling up the columns in the printed format cannot amount to a valid assessment order. The following observations are relevant: “As rightly pointed out by the counsel for the petitioners, Ext.P41 assessment order contains only some printed sentences wherein the names of the petitioners, the area and the amount of the tax only have been filled up. There is absolutely no reason stated therein. It also does not disclose the method of assessment. I am also of opinion that, passing of assessment orders under the Kerala Building Tax Act cannot be a mechanical process. The assessing authority should apply his mind to the contentions of the parties and the assessing order on the face of the same should disclose such application of mind giving reasons for the same. In Ext.P41 printed from of order the assessing authority has not even scored off the portions which are not applicable to the petitioners, which itself shows total non-application of mind. I have in one decision held that while passing assessment orders under the Kerala Building Tax Act, the assessing authority should not mechanically follow the form of assessment order prescribed in the rules. If there is no space provided for giving reasons in the printed form, the reasons should be appended to the assessment order in a separate sheet. In view of the fact that Ext.P41 assessment order does not contain any reason whatsoever, I am of opinion that, it amounts to violation of principles of natural justice.

Ext.P12 order relates to an extent of 578.25 m2 alleged to have been omitted in Ext.P1 assessment order. Curiously, no notice is seen referred to even before issuing Ext.P12. Therefore, the said order is also vitiated.

In view of the above, I find that Ext.P8 and Ext.P12 orders of assessment itself are without jurisdiction or authority and liable to be set aside. In the nature of the reliefs being granted, the challenge against the constitutional validity of the proviso to Section 11 (1) of the Act is kept open for consideration.

Accordingly, I set aside Ext.P8, Ext.P12 and consequently Ext.P17 order of the Appellate Authority rejecting the appeal on technicalities and direct the second respondent to consider afresh, the return filed by the petitioner under Section 7(3) of the Act and pass appropriate orders in accordance with law, in a time-bound manner. Needless to mention, if the claim for exemption is raised by the petitioner, appropriate orders as contemplated by law shall be issued by the 2nd respondent.

The writ petition is allowed as above.