THOMAS JOHN MUTHOOT Vs. STATE OF KERALA

JUDGEMENT

(1.) The petitioner has a building within the jurisdiction of the 2nd respondent- Kayamkulam Municipality. The first floor of that building has been let out to the State Bank of Travancore. The property tax payable for the first floor of the building is the bone of contention between the parties in this original petition. Originally, from 1994-1995 onwards, the property tax for the building was fixed as Rs. 34,680 as per the provisions of the Kerala Municipalities Act, 1960 and Rules made thereunder. Pursuant to a revision filed by the petitioner before the 3rd respondent, the same was reduced to Rs. 17,918. Although the petitioner filed an appeal against the same, the same did not succeed and the petitioner was paying property tax in respect of that building at the rate of Rs. 17,918 per year. By Ext. P-1 notice, objections were invited from me petitioner as to why the property tax of the building should not be enhanced to Rs. 70,094 with retrospective effect from the financial year 1996-1997. Against the same, the petitioner filed a revision petition under Rule 11 of Schedule II of the Taxation and Finance Rules framed under the Kerala Municipalities Act, 1960, which continued to be in force despite the bringing into force of the Kerala Municipality Act, 1994, by virtue of Section 575 of the new Act. Ext. P-2 is the said revision petition. That revision petition was dismissed by Ext. P-3 order. Against Ext. P-3 order, the petitioner filed an appeal before the 2nd respondent under Rule 24 of Schedule II of the old Rules. Ext. P-4 is that appeal. By Ext. P-5 order, that appeal was dismissed on the ground that the petitioner has not remitted the property tax at the revised rate. Since, against that order the petitioner did not have any effective remedy anywhere, the petitioner chose to file a petition before the Director of Municipal Administration, who issued Ext. P-6 communication dated 22-6-1999 to the Municipality directing that the enhancement of property tax cannot be retrospective and that the petitioner is liable to pay property tax at the old rate until the Municipality re-computes the property tax in accordance with Rule 9 (2) of the Rules. Consequent thereto, the petitioner was continuing to pay property tax at the rate of Rs. 17,918. Again, Ext. P-7 notice was issued to the petitioner proposing to recover property tax from the petitioner at the rate of Rs. 70,094 from the year 1998-1999 retrospectively. Against the same, the petitioner filed objections, after considering which Ext. P-9 order was passed, wherein, while confirming the demand for property tax at the rate of Rs. 70,094 per year, he was directed to pay the same only from the second half year of 2001-2002. The petitioner filed an appeal before the Municipal Council, which was dismissed by Ext. P-10. The petitioner filed Ext. P-11 revision before the Government, which was dismissed by Ext. P-12. Although Ext. P-12 order was passed in a revision petition filed by the petitioner, the Government went into the question as to whether Ext. P-6 direction of the Municipal Director is correct and whether the tax can be recovered retrospectively. After holding that the decision of the Municipal Director is not correct, the Government dismissed the revision petition and cancelled Ext. P-6 order of the Municipal Director. It is under the above circumstances, the petitioner has filed this original petition seeking the following reliefs:

(2.) The petitioner raises two contentions. First is that the property tax cannot be demanded retrospectively. The second is that the enhancement of property tax from Rs. 17,918 to Rs. 70,094 is arbitrary and unreasonable.

(3.) Both the Municipality as well as the Government support Ext. P-12 order by filing counter-affidavits. According to them, it is well within the powers of the Municipality to recover property tax retrospectively in appropriate cases and that the fixation of property tax as Rs. 70,094 on the basis of actual rental value of the building is perfectly valid and proper.