Kerala HC quashes Property Tax Demand without Assessment of Property under Kerala Panchayat Raj Act [Read Order]

In a recent judgment the Kerala High Court quashed the property tax demand made without assessment of property under the Kerala Panchayat Raj Act, 1994.

The petitioner, Mohammed Kabeer had constructed a building which was assessed to property tax in the year 2000 and the petitioner was paying the property tax as demanded. However, without any prior notice or intimation, notice was issued to the petitioner requiring the petitioner to remit an amount of Rs.1,36,731/- being the property tax required to be paid by the petitioner from 2013-2014 onwards.

The Counsel for the petitioner submitted that the petitioner had not been given any notice or opportunity with regard to the revision of the tax already assessed. It is contended by the counsel for the petitioner that the building of the petitioner was more than 15 years old even at the time of issuance of notice and that no enhancement is required in terms of the Rules.

The Counsel for the respondent submitted that the building of the petitioner was constructed in the year 2000-2001 and was assessed to property tax on the basis of the annual rental value of the building. It was submitted that the property tax was assessed as Rs.8359/- plus Library Cess and this was not varied till issuance of the Government Order in 2011 and that the same property tax was being paid by the petitioner till the issuance of the notice.

The Counsel for the respondent further submitted that since the basic rate for auditoriums was revised at the minimum of Rs.20/- and the maximum of Rs.40/- per square meter of plinth area. The building of the petitioner which has a plinth area of 840 sq.m. is assessed to tax at Rs.35,280/- and the demand is raised. It was further submitted that there is no illegality in the notice demand notice since notice and news in respect of enhancement/increase in property tax was published in newspapers informing the public with regard to enhancement/increase in property tax.

A Single Bench of the Kerala High Court comprising Justice Anu Sivaraman observed that “Demand raised without any assessment having been made is incompetent. “

The Court further directed that in case the petitioner submits his objections to the assessment of property tax, the same shall be taken note of by the Secretary and a proper order of assessment shall be passed with notice to the petitioner. The demands, if any, on the basis of such assessment can be raised by the Secretary in accordance with the provisions of the Panchayat Raj Act and the Rules made thereunder.

To Read the full text of the Order CLICK HERE

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