The Kerala High Court has recently held that Municipality should only issue demand notices for property tax from the date of issue of completion certificate.
The building for which the impugned demand notices have been issued is a multi storied apartment constructed by the petitioner. The completion certificate was issued in respect of the said building on 19th Feb 2015.
However, the occupancy certificate was issued only on 01.02.2017 by the respondent Municipal Corporation. The impugned demand notices were for the period from 1st October 2014 to 28th February, 2017 in respect of the property tax.
Counsel for the petitioner submitted that the petitioner is not liable to pay the property tax before issuance of the occupancy certificate, which is on 1st February 2017. He further submits that only on issuance of the occupancy certificate, the building is numbered, and electricity, water and gas connections are provided, and thereafter, the building can be used for residential purposes.
The case of the Counsel for the petitioner is that the building can be used for residential purposes only when it is numbered and water and electricity connections are provided.
On the other hand, Counsel for the respondent had submitted that the petitioner himself delayed issuance of the occupancy certificate; the construction of the building was completed in the year
2015, but the fire NOC was submitted by the petitioner in the year 2016. Thereafter, the occupancy certificate could be issued only on 01.02.2017.
He further submitted that the building became fit for use after completion of its construction and the completion certificate was issued. The petitioner cannot take advantage of his own wrong and complain about receiving occupancy certificate with delay as he did not submit the fire NOC on time. Therefore, the Municipality cannot be denied its tax due on the building constructed by the petitioner, he argued.
The Single Bench of Justice Dinesh Kumar Singh observed that, “the petitioner is liable to pay the tax for the period after issuance of the occupancy certificate and not prior to the said date, the present writ petition to that extent is allowed. The Municipality is entitled to recover the tax from the date of issuance of the occupancy certificate.”
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