The petitioners are husband and wife, who constructed a residential house during the year 1998. Ext.P1 completion certificate dated 14.08.1998, and Ext.P2 occupancy certificate dated 20.10.1998, are produced along with the writ petition to show that the construction of the building was completed in 1998 itself. The challenge in the writ petition is against Ext.P3 order whereby, the respondents have sought to demand luxury tax on the building for the assessment years from 1999-2000 to 2002-2003. This was followed by Ext.P5 revenue recovery notice which covered the period from 1999-2000 to 2006-2007. It is the specific of the petitioners that, insofar as the building was completed in 1998, the said building could not attract the levy of luxury tax which came into force only with effect from 01.04.1999, in respect of buildings, the construction of which was completed after that date. It is also stated that, although the petitioner preferred an appeal, although not in the proper form, before the 2nd respondent, the same was not considered by the 2nd respondent on merits. It is under these circumstances, that Ext.P3 order and P5 revenue recovery notice are impugned in the writ petition. Although, no counter affidavit has been filed on behalf of respondents 2 to 4, a counter affidavit is seen filed by the 1st respondent Corporation wherein it supports the stand of the petitioners. The learned Government Pleader appearing on behalf of respondents 2 to 4, however, would submit that although the petitioners had preferred an appeal to the 2nd respondent, against Ext.P3 order demanding luxury tax, the 2nd respondent did not consider the matter on merits in view of the fact that the petitioner had not remitted an installment of the tax that was demanded of him.
2. I have heard Sri.R.Bindu Sasthamangalam, the learned counsel appearing for the petitioners, Sri.K.D.Babu, the learned Standing counsel appearing on behalf of the 1st respondent Corporation and Smt.K.T.Lilly the learned Government Pleader appearing on behalf of the respondents 2 to 4.
3. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I am of the view that when the petitioners had produced materials to suggest that the construction of the building was completed in 1998 itself, well before the cut-off date mentioned in Section 5A of the Building Tax Act, it was incumbent upon the authority to verify this fact prior to levying any luxury tax in accordance with Section 5A of the Act.
Ext.P3 order of the 3rd respondent does not show any advertence to the documents produced by the petitioner to substantiate his contention that the construction of the building was completed in 1998 itself. That apart, the appeal preferred by the petitioners before the 2nd respondent, has been rejected on the ground that there was no payment of tax by the petitioners as a pre- condition for maintaining the appeal. In a situation such as the present, where the very applicability of the levy of luxury tax is called in question, I am of the view that the 2nd respondent ought to have considered the case of the petitioner on merits rather rather than rejecting it on a technical ground that the tax confirmed on them had not been paid. Under these circumstances, I set aside Ext.P3 assessment order, as also Ext.P5 revenue recovery notice, and direct the 3rd respondent assessing authority to reconsider the matter afresh in the light of the documents produced by the petitioners to substantiate their contention that the construction of the building was completed in 1998 itself. The 1st respondent shall pass fresh orders in the matter, referring to the documents produced by the petitioners in support of their contentions, and after affording the petitioners an opportunity of being heard, prior to the passing of such orders. The orders as directed by this Court shall be passed within a period of three months from the date of receipt of a copy of this judgment.
4. It is brought to my notice by counsel for the petitioners that during the pendency of the writ petition an amount of Rs.6,000/- has been paid by them as a condition for the grant of stay against recovery proceedings initiated against them. It is made clear that while passing fresh orders in the matter, the 3rd respondent shall take into account the said payment made by the petitioners and adjust the same against any liability, if any found due from the petitioners, consequent to the fresh determination as directed by this Court. If it is found that the petitioners are not liable to pay any amount by way of luxury tax, then the aforesaid amount shall be refunded to them forthwith.
A.K.JAYASANKARAN NAMBIAR JUDGE mns