PARUR TOURIST HOME Vs. STATE OF KERALA

JUDGEMENT

(1.) THE petitioner, which is a Firm, had constructed a three-storied commercial building in Paravur Municipality, in ernakulam District. THE construction was completed by December, 1986. 'the annual value was fixed at Rs. 87. 500/- in the first instance by the Paravur municipality, but that was reduced in revision to Rs. 75, 000/- the assessing authority functioning under the Kerala Building Tax Act, 1975 (the Act), completed an assessment, Ext. P1 under the Act, fixing the capital value of the building at Rs. 10,59,098/- with a liability for tax of Rs. 79, 659/ -. Exl. P1 did not disclose the reason why the assessing authority chose to depart from the annual value fixed by the local authority, or the capital value based thereon namely Rs. 750000/ -. THE petitioner filed an appeal before the Revenue divisional Officer under S. 11 of the Act. But it was dismissed by an order, which was not communicated to the petitioner. THE petitioner filed a revision petition before the District Collector under S. 13 of the Act, which was also dismissed by the proceedings, Ext. P5, dated 9-11-1990. All that the District collector did was to state in the order, Ext. P5, that the capital value of the building fixed by the assessing authority, the Tahsildar, was "fair and reasonable" and that the petitioner did not produce sufficient evidence to justify its claim for "a reconsideration of the assessment". THE petitioner challenges these proceedings under the Act.

(2.) THE learned Government Pleader who appeared for the respondents, stated that on the filing of the return by the petitioner, he was called for a hearing by the Tahsildar, at which he produced a valuation statement from his architect-engineer disclosing the cost of construction as rs. 10, 43,500/ -. THEreupon the Tahsildar fixed the capital value at Rs. 10, 59,098/- making some addition for the value of the land as well. Government pleader submits that since the capital value has been fixed after notice to the petitioner, there is no scope for interference by this Court with the orders in question.

(3.) SECOI, Jiy the cost of construction is not the sole criterion for fixing the annual value of a building. It is only one of the factors made relevant. The capital value of the building is not the cost of construction, but a multiple of the annual value, which will necessarily vary from place to place depending upon the importance of the location of the building, its accessibility and other factors. No doubt, the cost of construction also goes into the reckoning of the annual value as one of the factors, but it must be remembered that the rent that may be fetched is not always proportionate to the cost. Therefore the proper, and the only, course open to the assessing authority is to fix the annual value with reference to the rent which it would fetch if it were let out keeping in mind the various factors made relevant by S. 6 (4 ).