Kerala High Court Quashes Property Tax Demand Raised Without The Assessment Of The Property

The Kerala High Court has quashed the property tax demand raised without an assessment of the property.

The bench of Justice Anu Sivaraman has observed that the property tax was demanded at the maximum rate possible without considering any relevant aspect, including the age of the building.

The petitioner has challenged the demand raised against him for property tax. The petitioner had constructed a building that was assessed property tax in the year 2000, and the petitioner was paying the property tax as demanded.

However, without any prior notice of intimation, a notice was issued to the petitioner dated December 23, 2016, requiring the petitioner to remit an amount of Rs. 1,36,731, which is the property tax from 2013–2014 onwards.

The petitioner submitted that he had not been given any notice or opportunity with regard to the revision of the tax already assessed. The building of the petitioner was more than 15 years old even at the time of the issuance of notice, and no enhancement is required in terms of the Rules.

The department contended that the demand was raised on the basis of a general revision of property tax as authorised by the government in a notification dated January 14, 2011. The building of the petitioner was constructed in the years 2000–2001 and was assessed property tax on the basis of the annual rental value of the building. Since the basic rate for auditoriums under notification was revised to a minimum of Rs. 20 and a maximum of Rs. 40 per square metre of plinth area, the building of the petitioner, which has a plinth area of 840 sq. m., is assessed for tax at Rs. 35,280, and the demand was raised. There is no illegality in demand notice since notice and news in respect of enhancement or increase in property tax were published in newspapers informing the public with regard to enhancement or increase in property tax.

The court noted that even in a notification issued by the government, there cannot be an automatic demand for tax without fixing the tax payable in accordance with the procedure provided in the Act and the Rules in terms of the total plinth area of the building. Though it is contended in the counter affidavit that notices were published in newspapers regarding the enhancement of tax, nothing was produced to show that any order fixing the rate of tax on auditoriums at Rs. 40 per square metre had been issued or published.

The court directed that if the petitioner submits his objections to the assessment of property tax, it shall be taken note of by the Secretary, and a proper order of assessment shall be passed with notice to the petitioner.

Case Title: Mohammed Kabeer Versus Secretary

Case No.: WP(C) NO. 41464 OF 2016

Citation: 2023 LiveLaw (Ker) 269

Date: 31/05/2023

Counsel For Petitioner: Praveen K. Joy, Nixon Paul

Counsel For Respondent: Biju K. Mathew, V.Philip Mathew

Click Here To Read The Order