Kerala HC Quashes Building Tax Demand on Toyota Dealership, Directs State to Decide Exemption Claim
The Kerala High Court quashed the building tax demand on a Toyota dealership and directed the State Government to decide the pending exemption claim as required under the law
In a recent ruling, the Kerala High Court set aside building tax demand raised on a Toyota dealership and directed the State Government to decide the company’s exemption claim under the Kerala Building Tax Act. VPK Motors Pvt. Ltd., challenged the levy of building tax on its premises. The company claimed exemption under Section 3(1)(b) of the Kerala Building Tax Act which...
In a recent ruling, the Kerala High Court set aside building tax demand raised on a Toyota dealership and directed the State Government to decide the company’s exemption claim under the Kerala Building Tax Act.
VPK Motors Pvt. Ltd., challenged the levy of building tax on its premises. The company claimed exemption under Section 3(1)(b) of the Kerala Building Tax Act which gives exemption to buildings used mainly as factories or workshops.
The Tahsildar assessed building tax of Rs. 31.52 lakh against the petitioner. The company had already applied to the Government seeking exemption. Even while this application was pending, the authorities proceeded with the assessment. The petitioner was first asked to file an appeal which was later rejected on the ground that the showroom area was larger than the workshop area.
A revision filed before the District Collector was also rejected, stating that only the Government could decide the exemption issue but the matter was not referred to the Government.
Before the High Court, the petitioner argued that once an exemption claim is raised, the authorities must refer the matter to the Government as required under Section 3(2) of the Act. The State opposed the petition and said the building was mainly used as a showroom.
JusticeZiyad Rahman A.A. observed that the law makes it compulsory for the authorities to refer the exemption question to the Government. The court observed that the authorities were wrong in rejecting the claim on their own without making such a reference. The court also pointed out that the revisional authority could not reject the revision after saying that only the Government can decide the issue.
The court held that the assessment, appeal and revision orders were not valid. The court quashed all the impugned orders and directed the State Government to decide the exemption application after hearing the petitioner and calling for reports, within three months.
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