The Kerala High Court in a recent decision held that the assessee who paid the building tax even without protest can claim exemption in a later stage. The single bench clarified that payment of building tax without protest cannot be a ground for estopping the assessee from claiming exemption.
In the instant case, the assessee, a Trust running a nursing college, had paid building tax till the previous year even though it was exempted from building tax. From the next year, the college objected to pay tax. Consequently, the Grama Panchayat initiated co-ercive steps to realize tax.
The Court, on the contention of the Grama Panchayat on the maintainability of the Petition on ground of availability of alternative remedy, observed that the self-imposed limitation under Article 226 on the alternative remedy cannot be invoked in the face of the authority’s lacking the power.
Rejecting the contentions of the Punchayat, Justice Dama Seshadri Naidu held that “Section 203 (c) (unamended) of the Panchayat Raj Act clearly exempts the college building from tax. The very demand by the Grama Panchyat is beyond its powers: without any statutory basis. Ultra vires. So I hold that the petitioner’s paying the tax earlier—even without protest, for instance—could not come in the petitioner’s way to raise a plea, and successfully at that, against the college being compelled to pay the building tax. Thus, the Grama Panchayath’s plea on the count of either acquiescence or estoppel must fail; and, in fact, it has failed.”
Read the full text of the Judgment below.