Kerala High Court Upholds Triple Tax On Unauthorised Construction Due To Lack Of Proof Of Deemed Permit

Justice Ziyad Rahman A.A. stated that “in the absence of any documents indicating the submission of application for permit and inaction on the part of the Panchayat in considering the said application, the contention of the assessee as to the deemed permit cannot be accepted.”

Those are the basic documents which are required to establish the case of the assessee and in the absence of the same, the contention of the assessee cannot be entertained, added the bench.

In this case, the assessee/petitioner has been engaged in the business of Dairy Milk and related products since 1999 onwards.

According to the assessee he had constructed ten buildings for the purpose of using the same for their business, in the year 2016. The constructions were made after submitting proper applications in this regard.

However, as the Secretary/3rd respondent failed to issue appropriate permissions within the statutory period, the assessee had attained the right to commence and continue the construction, as according to them they obtained a deemed permission to do so.

Later, the Secretary passed an order, allotting unauthorized number to the aforesaid building, by imposing the tax upon the building three times of the actual tax.

Against the order of Secretary, appeal was submitted which was rejected. Based on the same, notices were issued as part of the revenue recovery proceedings initiated against the assessee.

The bench observed that the specific contention raised by the assessee is that, the action on the part of the department in assigning unauthorized number to the building and imposing three times of actual tax is not legally sustainable.

As per the assessee the construction was commenced and completed, on the basis of the application submitted by the assessee before the Panchayat for building permit but the same was not considered and therefore the assessee have the right to carry out the constructions based on the deemed permit, as the statutory period expired.

However, apart from merely raising the said contention, absolutely no documents are produced indicating the submission of any application for permit and the rejection of the same, stated the bench.

The bench stated that according to the assessee the building had been completed in the year 2016. However, there is reference of several applications submitted by the assessee in the year 2019, 2020, 2021 and 2022 seeking regularization of the constructions which were already rejected. Therefore, as the regularization applications were rejected and there are no records to show the challenge raised against the same, the contention of the assessee is to be rejected on this reason also.

The bench further observed that even if an opportunity is granted to the assessee, in the absence of any documents, it could not have been possible for the assessee to establish the said case. Therefore, granting a further opportunity would be merely reduced to an empty formality.

In view of the above, the bench dismissed the petition.

Case Title: A One Milk Products Pvt. Ltd. v. State of Kerala

Case Number: WP(C) NO. 14218 OF 2023

Counsel for Petitioner/Assessee: B.S. Sivaji and Dhanya Sreenivasan

Counsel for Respondent/Department: M.R. Sasith and M.R. Sarin

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