Justice Ziyad Rahman A.A., Kerala High Court
Once Regularization Comes Into Effect, Liability Is To Pay Property Tax At Regular & Not Double The Rate: Kerala High Court
|The Kerala High Court was considering a Petition seeking the quashing of the order imposing a penalty on the petitioners and demanding property tax.
The Kerala High Court has quashed an order demanding property tax at the rate of two times of the normal rate and held that once regularisation comes into effect, the liability of the assessee is to pay the tax at the regular rate, as the said building cannot be treated as unauthorised for that period.
The High Court was considering a Petition seeking the quashing of the order imposing a penalty on the petitioners and demanding property tax.
The Single Bench of Justice Ziyad Rahman A.A. held, “It is evident that once a regularization came into effect, the liability of the petitioners is to pay the tax at the regular rate, as the said building cannot be treated as unauthorised for that period.”
Advocate K.Praveen Kumar represented the Spl. G.P Deepa K.R represented the Respondent.
Factual Background
The petitioners are joint owners of a building. A notice was issued to the petitioners by the respondent Municipality alleging that the petitioner had carried out certain unauthorised construction in the said property. The dispute with regard to the unauthorised construction was ultimately settled by the Government directing the regularisation of the building. The Town Planner had also passed an order for regularising the building in compliance. An occupancy certificate was issued after the regularisation of the unauthorised construction.
A series notice was issued to the petitioner, requiring the petitioner to pay the property tax along with twice the rate of tax, treating the building as unauthorised. The said notice contained the period from 2016-2017, 2021-22 and 2022-2023. The Government issued an order, wherein the demand for the tax arrears were directed to be confined to the period from 2019-2020 onwards. An order was issued by the Municipality demanding tax by three times for the period from 2019-2020 to 2022-2023. Immediately, on receipt of the same, the petitioners submitted a request for exemption from payment of the property tax. In the meantime, the petitioner had already remitted the tax. Thereafter, the petitioner approached this Court by filing this writ petition as there was inaction on the part of the respondents.
Reasoning
One of the main contentions raised by the petitioner was that, since the Occupancy Certificate would indicate that the building was regularized with effect from May 28, 2022, it was not proper for the respondents to demand tax, double the rate along with the regular rate of tax, pertaining to the period after the said date.
It was further noticed that in the demand notice, while demanding tax at the rate of two times in addition to the normal rate, the demand was made for the period pertaining to 2022- 2023 as well, which period was after the date of regularization. Noting that the building was regularized on May 28, 2022, the Bench held that the Municipality could not have imposed two times of the normal tax along with the regular rate of tax for a period after May 28, 2022.
The Petition was thus disposed of with a direction to quash the demand of property tax in respect of the building of the petitioners at the rate of two times of the normal rate pertaining to the period after May 28, 2022. “The 2nd and 3rd respondents shall rework the demand made in Ext.P15, in tune with the observations made by May 28, 2022”, it ordered.
Cause Title: Koovatt Laila v. State Of Kerala (Neutral Citation: 2025:KER:52511)
Appearance
Petitioner: Advocate K.Praveen Kumar
Respondent: Spl. G.P Deepa K.R