Tax/Penalty U/S 242 Kerala Municipality Act Cannot Be Imposed If Building Was Lawfully Constructed: Kerala HC

The Court emphasized that the construction of a building and its occupation were not the same.

A Division Bench of Chief Justice A.J. Desai and Justice V.G. Arun observed, “The contention of the Standing Counsel for the Corporation that, utilisation of a building for any of the purposes mentioned in Section 233(2) would also attract tax and penalty under Section 242 can only be rejected, since a careful reading of the provision would show that it is not mere utilisation of a building that would attract the provision, but utilisation of an unlawfully constructed building. Therefore, in our considered opinion, the Corporation cannot charge tax under Section 242 alleging unauthorised occupation of the appellants' building.”

Sr. Advocate Kurian George Kannanthanam represented the appellants, while Advocate K B Arunkumar appeared for the respondents.

The appellants were the proprietors of a Women’s Hospital who had challenged an order issued by the Corporation of Kochi (Corporation) demanding property tax and penalty arguing against the imposition of tax and penalty under Section 242 of the Act.

The Court had to determine whether the owner and occupier of a building, who constructed the building in tune with the building permit granted by the Corporation, can be made liable to pay the tax and penalty under Section 242 of the Act, on the ground that the building was occupied without obtaining the certificates mandated as per Rule 22 of the Kerala Municipality Building Rules, 1999 (Rules).

The Court noted that the Corporation had accepted the entire building to have been constructed in accordance with the building permit issued to the appellants. The only demand in the notice was to produce no objection certificates from the Fire Force Department and the Pollution Control Board. Therefore, it cannot be said that the building was unlawfully constructed.

“Sub-section (1) of Section 242 leaves no room for doubt that, imposition of tax under the provision would apply only if the building is constructed/re-constructed unlawfully or such unlawfully constructed building is utilised for any of the purposes mentioned in sub-section (2) of Section 233,” the Court pointed out.

Accordingly, the High Court allowed the appeal.

Cause Title: Dr. P.J. Joy & Anr. v. The Corporation of Kochi & Anr. (Neutral Citation: 2024:KER:26055)

Appearance:

Appellants: Sr. Advocate Kurian George Kannanthanam; Advocate Tony George Kannanthanam

Respondents: Advocate K B Arunkumar

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