1. This writ petition is filed by a private limited company incorporated under the provisions of the Companies Act, 1956, challenging Exts. P4 and P6 demand notices issued by the Secretary of the Panavally Grama Panchayat, the 2nd respondent, directing the petitioner to pay property tax of Rs. 35,70,446/- and Rs. 12,66,745/- to 36 buildings bearing different numbers and 54 buildings bearing different numbers, respectively, for different periods.
2. Brief material facts for the disposal of the writ petition are as follows:-
3. Petitioner has secured Ext. P1 building permit on 10.10.2007 for construction of Standard Villas, Deluxe Villas, Two Bedroom Villas, Resident Villa and other buildings.
4. Admittedly, certain public interest litigations were filed before this Court, alleging inter alia that the construction of the resort was illegal and against the provisions of the Coastal Regulation Zone Notification, 1991 and the plan prepared by the Kerala Coastal Zone Management Authority.
5. Finally the writ petitions were allowed holding that the constructions made by the petitioner are violative of the Coastal Zone Management Plan and Coastal Regulation Zone Notification, 1991, reported in Ratheesh v. State of Kerala [2013 (3) KLT 840]. The said judgment of the Division Bench of this Court was upheld by the Hon’ble Apex Court in Kapico Kerala Resorts Private Limited v. State of Kerala and Others [2020 (3) SCC 18].
6. Be that as it may, the case projected by the petitioner is that the construction of the Villas have been completed and the Secretary of the Panchayat had allotted building numbers to all the buildings; the petitioner had remitted a sum of Rs. 18,30,334/- as property tax to the Panchayat on 31.01.2012 for the half year period of 2011-12 evident from Ext. P2 tax receipt dated 31.01.2012. It is also submitted that petitioner has remitted building tax for the first half of 2012-13 evident from Ext. P2(a) tax receipt dated 19.12.2012.
7. It seems the Panchayat has filed S. T. No. 1070 of 2013 before the Judicial First Class Magistrate Court – II, Cherthala under Section 210 of the Kerala Panchayat Raj Act, 1994 read with Rule 27 of the Kerala Panchayat Raj (Taxation, Levy and Appeal) Rules, 1996 alleging that the petitioner has failed to remit the building tax for the period 2012-13 evident from Ext. P3 complaint.
8. Anyhow Ext. P4 demand is dated 09.04.2013 and even though an appeal was preferred before the Standing Committee for Finance of the 2nd respondent Panchayat, it was rejected as per Ext. P5 order dated 06.01.2014.
9. Later the petitioner is served with Ext. P6 demand dated 14.03.2014 for the period 01.04.2013 to 31.07.2013.
10. The paramount contention advanced in the writ petition is that the Panchayat is not entitled to raise any demand against the building ordered to be demolished as per the judgment of the Division Bench of this Court and affirmed by the Hon'ble Apex Court as specified above.
11. That apart, it is submitted that there is no default or latches on the part of the petitioner in applying for building permit before the Secretary of the Grama Panchayat and securing the same, and if at all there was any consequence on the basis of the Coastal Regulation Zone Notification and the Coastal Management Plan, the Secretary of the Panchayat ought not have issued the building permit and should not have numbered the buildings.
12. The sum and substance of the contention is that the Secretary of the Panchayat having granted permit and numbered the building, no manner of illegality can be attributed on the part of the petitioner and therefore the demand raised by the Secretary of the Grama Panchayat against the building ordered to be demolished by this Court and affirmed by the Hon'ble Apex Court cannot be legally sustained.
13. The Grama Panchayat has filed a detailed counter affidavit justifying the demand raised by it. It is also submitted that even if the construction is unlawful, the Panchayat is entitled as of right to levy tax in contemplation of the provisions of the Kerala Panchayat Raj Act, 1994.
14. I have heard, learned Counsel for the petitioner Sri. M. Gopikrishnan Nambiar and Sri. Mohammed Raiz, learned Government Pleader Sri. Riyal Devassy for the State and Sri. Manu Govind for the Grama Panchayat and perused the pleadings and material on record.
15. Learned counsel for the petitioner has advanced arguments on the basis of the contentions deliberated above.
16. Section 203 of the Act 1994 deals with property tax and sub section (1) thereto clearly specifies that any Village Panchayat shall in accordance with the provisions of the Act and the rules as may be prescribed, levy property tax on every building (including the land appurtenant thereto) situated in the area of the respective Village Panchayat and not exempted under the provisions of this Act.
17. Admittedly, various buildings are constructed by the petitioner in an island within the limits of the 2nd respondent Grama Panchayat. There is no manner of dispute with respect to the rate of basic property tax or the plinth area for which the tax is assessed.
18. The sole contention is that the building having been found to be unlawfully constructed, the Panchayat is not entitled to impose any tax on the building, and the petitioner is not liable to comply with the demand. Even though petitioner has a case that the construction of the buildings are found to be unlawful by the Division Bench of this Court as well as the Hon'ble Apex Court and it is to be demolished, that cannot be claimed to be a circumstance exonerating the petitioner from payment of the property tax imposed against an unlawful building construction so as long as the buildings continue to be in existence. It is an admitted fact that the building is not so far demolished for reasons best known to the rival parties.
19. In that regard, learned counsel has invited my attention to the provisions of Chapter XXI of Act 1994 dealing with buildings and submitted that once a building is constructed as per the permit granted by the Secretary and the building is numbered by the Secretary, no manner of illegality can be attributed against the petitioner.
20. However on a perusal of Ext. P1 building permit, it is quite clear and evident that the Secretary while issuing the permit has clearly specified that construction should be complied with as per notification under Section 3(1) and Section 3(2)(v) of the Environmental (Protection) Act, 1986 and Rule 5(3)(d) of Environmental (Protection) Rules, 1986 and Regulations constituted in the Coastal Regulation Zone notification in force.
21. It is also specified therein that the proposed construction must be upto or beyond the existing buildings, otherwise CRZ will be applicable.
22. It is an admitted fact that the Coastal Regulation Zone and the Coastal Zone Management Plan were applicable for construction of the buildings in question. It is also admitted that petitioner has not secured any clearances from the Coastal Zone Management Authority and it was accordingly that the construction put up by the petitioner was found to be unlawful.
23. In fact the permit was granted by the Secretary and the building was also numbered by the Secretary, but that will not absolve the petitioner from payment of the building tax to the Panchayat, to which the amounts are due. Even assuming that the Secretary was not legally right in granting the building permit, that will not abdicate the Panchayat from recovering the dues to it legally. The judgment of the Division Bench of this Court as well as the judgment of the Hon'ble Apex Court referred to above would make it clear that the constructions are found to be unlawful.
24. Even assuming that the construction is unlawful, the Panchayat is entitled to impose tax by virtue of Section 235AA of the Kerala Panchayat Raj Act, 1994, irrespective of the building permit granted by the Secretary, which reads thus:-
“235AA. Levying of tax for the building constructed unlawfully.- (1) Notwithstanding anything contained in this Act or the rules made thereunder, where any person has unlawfully constructed or reconstructed any building, such building, shall without prejudice to any action that may be taken against that person, be liable to pay the sum of property tax that would have been paid, had the said building been constructed lawfully, together with twice the amount, towards property tax of the building so constructed unlawfully with effect from the date of completion or utilisation of that for any of the purposes mentioned in sub-section (2) of section 203, whichever is earlier, till the date of demolition of that building.
(2) Nothing contained in sub-section (1) shall preclude the Secretary from proceeding against such person under section 235W of the Act and the owner shall not have right to get any compensation due to any action taken by the Secretary under this section.
(3) No building number as provided under section 235 shall be affixed to the building constructed unlawfully and they shall be given a special number as prescribed. Any delay in giving special number shall not be a bar to levy property tax retrospectively under sub-section (1).
(4) Secretary shall maintain ward-wise special registers recording the survey number of the land on which the building has been constructed unlawfully, name and particulars of the owner of the land, special number given to the building, details of the property tax levied and collected for the building.
(5) The Village Panchayat shall not grant permit or licence to use the building constructed unlawfully and given a special number as provided in sub-section (3) and liable to be proceeded against under section 235W, for any trade, commerce or industrial purposes or any other purposes and if the Village Panchayat has granted any permit or licence, that shall be reconsidered and cancelled after giving notice to the owner of the building and the licensee.”
25. On an analysis of the said provision, it is clear that there is no force or weight in the arguments made by the learned counsel for the petitioner that the construction being illegal and liable to be demolished, the Panchayat is not liable to impose tax against the petitioner; especially when it opens with a non obstante clause so as to gather a meaning that in spite of the building permit granted by the Secretary, if it is unlawful the consequences prescribed therein has to follow, and tax has to be paid till the building is demolished.
26. Learned counsel for the petitioner has taken me through the provision
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s of the Chapter XXI of the Act1994 dealing with buildings. It is clear from the said provisions that the phraseology employed in those provisions are in respect of the violation of the provisions of the Kerala Panchayat Raj Act, 1994 and the Kerala Panchayat Building Rules, 2011, however the phraseology employed in Section 235AA is 'unlawful construction' which comprehends not only the violation of the provisions of the Kerala Panchayat Raj Act, 1994 and the Kerala Panchayat Building Rules, 2011, but every other situation by which the construction becomes unlawful. 27. As per the 9th Edition of the Black's Law Dictionary, the term ‘unlawful’ is defined to mean :- “unlawful, adj. (14c) 1. Not authorized by law; illegal . 2. Criminally punishable . 3. Involving moral turpitude . - unlawfully, adv.” Taking into account all the above factual and legal aspects, I am of the considered opinion that the petitioner could not make out any illegality, arbitrariness or other legal infirmities justifying interference under Article 226 of the Constitution of India, against Exts. P4 and P6 demands. Needless to say, the writ petition fails. Accordingly it is dismissed.