K E EAPEN Vs. EXECUTIVE OFFICER KANJIRAPALLY PANCHAYAT

JUDGEMENT

(1.) Isaac J. has referred this case to a Division Bench since he felt that the decision of Govindan Nair J. in Kallara Panchayat v. State of Kerala ( 1972 KLT 126 ), following two Division Bench rulings of the Madras High Court in, one, The General Committee, Madras Club v. The City Municipal Council of Madras [(1964) I MLJ 671] and, two, Addison Paints and Chemicals (Private) Ltd., Madras v. The Commissioner, Corporation of Madras ((1962) II MLJ 440), required reconsideration. The question involved, though of importance, lies within a narrow compass: and the question relates to the interpretation of proviso (ii) of R.4 of the Kerala Panchayats (Building Tax) Rules, 1963.

(2.) The petitioner is a medical practitioner; and the first respondent is the Executive Officer of the Kanjirappally Panchayat. The petitioner has seven buildings within the panchayat area; and the buildings are used for running a hospital under the style Kadamapuzha Hospital. There is a registered partnership among the petitioner, his son and son inlaw; and the petitioner has let out these buildings on a monthly rent of Rs. 840/- under Ex. P2 dated Ist June 1968 to the partnership. Three of the buildings are used partly for the hospital and partly for housing pay wards, while the other four buildings are used as residential quarters for doctors and nursing sisters. The Panchayat made a revision of the building tax for the five years commencing from 1968-69 as required by the Building Tax Rules. And the question we have to consider is whether the mode of assessing the annual rental value for the purpose of taxation is correct.

(3.) Under S.68 of the Kerala Panchayats Act, every panchayat has the right to levy a tax on all buildings, other than huts and buildings exempted under the Act, in the panchayat area, at such percentage of the net annual rental value of the building as may be fixed by the panchayat subject to a maximum of ten per cent and a minimum of four per cent S.72 of the Act exempts certain types of buildings and lands from tax, cess or duty leviable under S.66 (S.66 enumerates the taxes, cess, etc. leviable by Panchayats.) Rules are framed regarding the mode of taxing; and the rules are the Kerala Panchayats (Building Tax) Rules, 1963. And we are concerned only with proviso (ii) to R.4. R.4 lays down that the net annual rental value of buildings shall be deemed to be the gross annual rent at which they may reasonably be expected to be let from month to month or from year to year, less a deduction of ten per cent, etc. And proviso (ii) reads