THOMAS JOHN 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 1994-95 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. P1 notice, objections were invited from the 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 1996-97. Against the same, the petitioner filed a revision petition under R. 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 S.575 of the new Act. Ext. P2 is the said revision petition. That revision petition was dismissed by Ext. P3 order. Against Ext. P3 order, the petitioner filed an appeal before the 2nd respondent under R.24 of Schedule II of the old Rules. Ext. P4 is that appeal. By Ext. P5 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. P6 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 R.9(2) of the Rules. Consequent thereto, the petitioner was continuing to pay property tax at the rate of Rs. 17,918/-. Again, Ext. P7 notice was issued to the petitioner proposing to recover property tax from the petitioner at the rate of Rs. 70,094/- from the year 1998-99 retrospectively. Against the same, the petitioner filed objections, after considering which Ext. P9 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 2001-02. The petitioner filed an appeal before the Municipal Council, which was dismissed by Ext. P10. The petitioner filed Ext. P11 revision before the Government which was dismissed by Ext. P12. Although Ext. P12 order was passed in a revision petition filed by the petitioner, the Government went into the question as to whether Ext P6 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. P6 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. P12 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.