Establishments In Notified Industrial Areas Exempted From Obtaining Building Permit From Local Bodies: Kerala High Court

"I am of the undoubted opinion that when a statute exempts or grant benefits to industrial establishments located within the notified industrial areas, the local body is precluded from taking any action on the basis of the provisions of law applicable to other industrial establishments. I am also of the view that exemption is granted by the statute as well as the Government in order to promote industries within the State and to facilitate an easy mechanism for an industrialist to start the establishments without being saddled by the intricacies contained under various statutes, by resorting to the single window clearance methodology provided under Act 1999."

The petition was filed by a private company that owns a manufacturing industrial unit in a State declared Industrial Development Area. The petitioner submitted that it had secured all statutory permissions and licenses from the Municipality. 

In 2013, the petitioner constructed a new factory building in accordance with law and the Secretary of the Municipality classified the factory building as an unauthorized building for the purpose of levying municipal property tax and issued demand notices. Challenging the legality and correctness of the levy and demand, the petitioner moved the High Court.

Advocates Joby Cyriac and Sanjay Thampi appeared for the petitioner and argued that as per Section 450(i) of the Kerala Municipality Act as well as Section 6 of the Kerala Industrial Single Window Clearance Act, all industrial undertakings established or proposed to be established in industrial areas declared by Government are exempted from obtaining a building permit from Local Self Government Institutions, Town Planning Department and other authorities.

Even prior to these enactments, a Government Order dated 1994 had exempted such industrial units from obtaining clearances from local bodies, which was clarified through another circular as well. Therefore, their argument was that the petitioner, who is functioning in the notified industrial estate is exempted from obtaining a building permit to establish or construct a factory building or any other building in the industrial area.

Senior Government Pleader K.P Harish agreed with the submissions of the petitioner and submitted that As per the GO and the Kerala Industrial Single Window Clearance Boards and Industrial Townships Area Development Act, all industrial undertakings being established or proposed to be established in industrial areas shall be exempted from obtaining any type of permits from Municipalities or Grama Panchayat etc. for construction of building for starting an industrial undertaking.

Standing Counsel M.K Aboobacker advanced various arguments including that the State or the District Industries Centre are not intimating the exemptions given to the industrial establishments by the State.

The Court noted that the Government Order exempted the industrial establishments from obtaining licenses of the local bodies functioning within the industrial area declared by the Government. 

"The order clearly specifies that the industrial units located in the Industrial Estates/Development Area/Mini Industrial Estate/a consolidated list of which are appended to the order, shall be exempted from obtaining clearances from local bodies."

Moreover, it was found that Section 450 of the Kerala Municipality Act granted an exemption to the industrial establishments functioning within the notified industrial area from securing clearances from the local bodies.

Therefore, on a conjoint reading of the Government order and the relevant provisions of law, it is clear that the Panchayat was not right in levying property tax against the petitioner and demanding the same.

As such, the petition was allowed and the order levying property tax and the demand notices issued to the petitioner were quashed. 

Case Title: M/s Holmarc Opto Mechatronics (P) Ltd v. Secretary, Kalamassery Municipality & Ors.

Citation: 2022 LiveLaw (Ker) 343

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