KOSHY P JOHN Vs. STATE OF KERALA

JUDGEMENT

(1.) The petitioners in all these cases are challenging the constitutional validly of S.5A of the Kerala Building Tax Act, 1975, hereinafter called the Act which provides for the levy of luxury tax at a flat rate of Rs.2000 payable every year on residential buildings with plinth area of 278.7 Square Metres or more and the construction of which is completed on or after 1st April, 1999. Though the challenge is essentially on the constitutional validly of S.5A the Act, in some cases there is factual dispute with regard to the plinth area assessed.

(2.) I heard the various counsel appearing for the petitioners as well as the Special Government Pleader appearing for the respondents. The respondents have also filed a counter in O.P. 13766/2002 with a prayer to treat its counter affidavit for all the cases. The impugned Section is extracted hereunder.

(3.) The first contention raised by the petitioners is that introduction of luxury tax on residential buildings under the Building Tax Act, 1975 is not permissible as there is a separate levy of luxury tax under another state legislation namely, Kerala Tax on Luxuries Act, 1976. According to the petitioners when there is a separate statute comprehensively dealing with levy of luxury tax the legislation is complete under Entry 62 of the State List under Seventh Schedule of the Constitution and there is no authority for the State to make a separate levy of luxury tax in another statute namely, Kerala Building Tax Act which otherwise provides for assessment and collection of building tax, a one - time levy on new buildings. The Government Pleader on the other hand submitted that so long as there is power under Entry 62 of the State List under Seventh Schedule to the Constitution the Legislature has the freedom to introduce luxury tax in any other statute. I am not able to accept the contention of the petitioners that the Legislature is bound to provide luxury tax on all commodities, services and assets, under one comprehensive legislation because no such restriction is provided on the Constitution. All that the petitioners contend is that the Legislature does not have competence to make a separate law of luxury tax on buildings under the Building Tax Act. The levy under challenge is brought to the Statute by an amendment by Act 23/99 providing for luxury tax on residential building completed on or after 1.4.1999 and with plinth area of 278.7 sq. metres and above. The Building Tax Act mainly provides for one time levy of building tax on the completion of construction of building and on reconstruction or extension of existing buildings and the revenue authorities, namely, the Tahsildar, Revenue Divisional Officer and the District Collector, are the authorities enforcing the Act through the assessment of tax, appeal, revision etc. Therefore, the provision for luxury tax on residential buildings is also including in the Building Tax Act as the very same statutory authorities familiar with the matter with the appropriate authorities to assess and collect luxury tax periodically every year. Moreover, luxury tax is payable for all residential buildings coming within the description under S.5A constructed all over the State and needless to mention that Revenue officials in the field are the right people to trace such buildings and assess the tax. On the other hand, the authorities enforcing the provisions of Luxury Tax Act are officers of the commercial taxes department stationed only in trade centres and towns. Therefore, the Government rightly identified the revenue authorities under the Building Tax Act to assess, and collect luxury tax on residential building attracting liability. If the Legislature has the competence to levy luxury tax on residential buildings, then of course it is open to them to provide such levy under any legislation and provide machinery for collection. The competence for legislation on luxury tax on anything permissible is not affected by the reason that there is a separate legislation for luxury tax on other commodities and services. Therefore, this contention cannot be accepted and is therefore rejected.