PAVAN KUMAR Vs. STATE OF KERALA

JUDGEMENT

(1.) This Writ Appeal is filed against judgment of the learned Single Judge upholding single assessment of 13 flats made up into 12 numbers as a single building in a flat complex. We have heard counsel appearing for the appellant and Government Pleader for respondents. The facts leading to the controversy are the following. The appellant along with his two sisters, the joint owners of 54 cents of land, gave it to a builder under an agreement for development and construction of a residential flat complex comprising of 58 flats. As consideration for the grant, under the agreement Builder was bound to give appellant 13 flats made up into 12 numbers by combining two flats together for appellant's residence and two each flats to appellant's sisters and remaining 41 flats were allowed to be sold by the Builder to customers. When separate returns were filed for assessment of each and every flat separately, the Tahsildar assessed the 12 flats including one combination of two flats as a single building and the two flats each of appellant's sisters were also clubbed together and assessed as a single building. However, so far as the 41 flats built and sold by the builder are concerned, all are assessed as separate units by applying Explanation (2) to Section 2(e) of the Kerala Building Tax Act (hereinafter called "the Act"). The appellant questioned the single assessment of 12 flats in his name as according to him, these flats are also entitled to be assessed as individual units by applying the very same Explanation. However, this was rejected by the Assessing Officer as well as in appeal by the R.D.O. against which Writ Petition was filed. The learned Single Judge, however, by following Full Bench judgment of this court in District Collector v. Sreekumari Kunjamma, 2011 1 KerLT 248 the claim against which Writ Appeal is filed.

(2.) Counsel for the appellant in the first place submitted that Full Bench decision has no application because that was a case pertaining to a two storied building with two apartments owned by the same person, the assessment of which as a single unit was upheld by the Full Bench by declaring that Explanation 2 to Section 2(e) does not apply to a building with two flats owned by the same person. There can be no controversy on this because the building, the assessment of which was considered by the Full Bench is only a two storied building and the two flats are owned by the very same person. On the other hand, in this case the apartment complex is assessed as 41 + 3 = 44 flats by applying Explanation 2 to Section 2(e) of the Act. So much so, the only question that remains to be considered is whether the very same Explanation applied by the Assessing Officer for assessment of the flats other than those belonging to appellant and his sisters should apply for assessment of their flats also. Since situation of this kind will repeatedly arise, we feel for the guidance of Assessing officers we should explain the scope of Explanation with reference to buildings of the type referred to herein. Accordingly we extract hereunder the definition clause of "building" with Explanation 2:

(3.) In this, case the controversy in the first place is whether the appellant has shared the construction cost with the builder which is seriously disputed by the Government Pleader by stating that assigning the right in land to the builder to build and sell the fats on condition of constructing and delivering few flats to the owners of the land does not amount to sharing of cost as stated in the Explanation. However, counsel for the appellant submitted that consideration for assigning the land in part to the builder or to his nominees is received by the appellant and his sisters being owners of the land in the form of built up area in the building and not as cash consideration. According to counsel, it makes no difference whether the value of the flats constructed and delivered to them were received first in cash and then given to the builder for construction or instead treat it as notional consideration and receive the consideration in the form of built up area. We are in complete agreement with this argument of the counsel because when the builder constructs and sells the fiats and uses the consideration for construction of the entire building, the value of the built up area given to the appellant by the builder as consideration for getting the right amounts to sharing of cost of construction of the building. So much so, the Explanation applies to a situation where the land owner receives consideration for right in land partly assigned in favour of other apartment owners, even in the form of built up area. We, therefore, hold that the Explanation on sharing the cost of construction, is satisfied so far as appellant and his two sisters are concerned.