Radha Namboothiri vs Thrissur Corporation Represented By Its Secretary, Corporation Office, Thrissur 680001

Bechu Kurian Thomas, J

Petitioner challenges the demand of property tax for the building constructed by her. Petitioner objects to the demand of tax for the period from the date of submission of completion certificate, instead of the date of occupancy certificate.

Petitioner had entered into a joint venture agreement for the construction of a multistoried apartment complex. When the construction of the apartment complex was completed in 2013, petitioner applied for issuance of an occupancy certificate on 08-04-2013 by submitting a completion certificate. However, as evident from Ext P2, the occupancy certificate was issued only on 21-11-2019. In the meantime, the 2nd respondent issued a demand notice dated 17-08-2020 directing the petitioner to pay property tax under the Kerala Municipality (Property tax, Service Tax, Service Tax and Surcharge) Rules, 2011, (for short 'the Rules') for the period from 2013-14 onwards. According to the petitioner, the liability to pay property tax falls only from the date of issuance of occupancy certificate, as held by this Court in Sheela v. Kollam Municipal Corporation (2017 (4) KLT 887) and that the demand for the period prior to the date of occupancy certificate, is legally impermissible.

A statement has been filed by the respondents contending that as per Rule 24 of the Rules, property tax can be levied from the date of completion of the building or date of occupancy, whichever is earlier and that, upon site inspection and enquiry, it was revealed that the apartments in the building was sold out prior to the year 2019 itself. Respondents further pleaded that electricity connection was obtained for the building and that the same is being continued, indicating that the building was put to use even prior to the date of issuance of the occupancy certificate. Respondents further contended that the issuance of the occupancy certificate was delayed due to the default of the petitioner to submit the final NOC from the Fire and Rescue Department and that the decision relied upon by the petitioner is not applicable to the facts of the case.

On a consideration of the rival contentions, it is understood that though the petitioner had applied for occupancy certificate as early as on 08-04-2013, for reasons that can be attributed to the petitioner itself, the occupancy certificate was issued only on 21-11-2019. There is nothing on record to suggest that the petitioner had occupied the building unauthorisedly, after submitting the completion certificate. Respondents have not issued any notice intimating the unauthorised occupation or directing the petitioner to desist from occupying the building before obtaining the occupancy certificate. In the absence of any such action initiated by the respondents, it cannot be assumed, merely on the basis of the electricity connection continuing in the name of the petitioner, the details of which are not even available, that the building was occupied by the petitioner prior to issuance of occupancy certificate.

In the decision reported in Sheela v. Kollam Municipal Corporation (2017 (4) KLT 887), this Court had held that a conjoint reading of the provisions clearly indicated that while the charge of property tax that accrued in respect of a building fell immediately on the completion of its construction, the liability to pay property tax depends entirely on whether the building was occupied or used for the purpose for which it was constructed. It was further observed that if the charging provision is to be continued as intending a levy and collection of tax in respect of the buildings with effect from the date of completion of construction, irrespective of whether they were occupied or not, the statutory provision in section 239 of the Kerala Municipality Act, 1994, relating to vacancy remission, would be rendered meaningless.

Coming to the facts of the case, as mentioned earlier, there is nothing on record to show that the building was occupied prior to the occupancy certificate and further, the respondents have not issued any notice directing the petitioner to desist from occupying the building without obtaining the occupancy certificate. In the absence of any such proceedings, this Court cannot come to a conclusion that the building was occupied even before obtaining the occupancy certificate.

In such a view of the matter, the demand of the respondents to pay the property tax for the building under consideration from the date of submission of the completion certificate, is without the authority of law. Petitioner is liable to remit the property tax for the building covered by Ext.P2 occupancy certificate only from the date of issuance of occupancy certificate, i.e; 21-11-2019 and not for any earlier period. Therefore there will be a direction to the 2nd respondent to consider and dispose of Ext.P5 in the light of the above directions, within a period of thirty days from the date of receipt of a copy of this judgment.

The writ petition is allowed as above.