Occupancy Certificate Not Final For Plinth Area Determination: Kerala High Court Upholds Luxury Tax U/S 5A Of Kerala Building Tax Act

Justice Ziyad Rahman A.A. was addressing the issue where challenge raised by the assessee was against the assessment of building tax and luxury tax, by mainly placing reliance upon Occupancy Certificate.

Section 5A Of Kerala Building Tax Act imposes luxury tax on residential buildings that exceed a certain plinth area threshold.

Section 6 of the Kerala Building Tax Act deals with determination of plinth area for the purpose of building tax.

In this case, the assessee/petitioner is the owner of a residential building and is aggrieved by the building tax assessment in respect of the said building.

According to the assessee, the total plinth area of the building is 270.17 Square Meters, which is the plinth area mentioned in the Occupancy Certificate (Ext.P1) issued by the Changanasserry Municipality. In occupancy certificate, the plinth area of 270.17 Square meters was approved by the Town Planning Officer as well.

However, later, proceedings were issued by the 4^th respondent/The Tahsildar and Assessing Officer imposing luxury tax under Section 5A of the Kerala Building Tax Act and also making a demand of Rs.2,460/- which is the remaining amount payable based on the revision of one time building tax payable by the petitioner.

The assessment of the luxury tax was made, in view of the fact that in the measurement, the plinth area of the building was found to be more than 278.7 Square meters, therefore it was found that the petitioner is liable to pay luxury tax.

The bench after looking into Section 6 of the Kerala Building Tax Act observed that even though the said provision contemplates that plinth area of a building for the purpose of this Act, shall be the plinth area of the building as specified in the plan approved by the local authority, the said provision also enables the assessing authority to verify the same.

“This would lead to a conclusion that, the statutory stipulation contained in Section 6 is not merely to accept the plinth area mentioned in the approved plan as such, but the same is subject to verification of the assessing authority. In other words, it shall be open to the assessing authority to verify whether the plinth area mentioned in the approved plan is correct or not”, added the bench.

The bench observed that apart from the Occupancy Certificate, no other documents are produced by the assessee to substantiate that the measurement of the plinth area referred to above, was erroneous.

The bench opined that merely because of the reason that, Occupancy Certificate contains that the plinth area is 270.62 Square Meters, that by itself would not lead to a conclusion that, the building tax has to be assessed based on the same.

In view of the above, the bench found that no further scrutiny is required and dismissed the petition.

Case Title: Sherly Thomas Nalpathamkalam v. State of Kerala

Case Number: WP(C) NO. 3826 OF 2023

Counsel for Petitioner/ Assessee: Thomas Abraham, S. Abhilash Vishnu and K.R. Monisha

Click Here To Read/Download The Order