Ar. Lakshmanan, J. 1. Heard Mr. Santhosh Mathew for the appellant and Mr. R. K. Muraleedharan, Government Pleader for the respondents.
2. The writ appeal is directed against the judgment of the learned single Judge dated 21st March, 2000. The appellant as petitioner challenged Ex. P4 assessment order and Exts. P3 and P7 demand notices Issued by the Tahslldar, Elappully, Palakkad. It is the case of the appellant that the appellant is a factory registered under the Factories and Boilers Act. Photocopy of the licence Issued in favour of the appellant by the Director of Factories and Boilers on 12-7-1999 was produced as Ext. P1 in the original petition. It is stated that the said licence is valid till 31-12-2000. It is submitted that the appellant is engaged in the manufacture of uncoated paper and paper boards, namely, poster papers, blue match papers, manifold papers etc. Hence it is submitted that the appellant is a factory engaged in the manufacture of various kinds of papers and paper boards and as per the Kerala Building Tax Act, 1975 (hereinafter referred to as the Act). Since the appellant is a factory, it is not liable to pay building tax. As per Section 3(1)(b) of the Act, building used principally for religious, charitable or educational purposes or as factories or workshops are exempted from building tax. However, the appellant was served with a notice by the Tahsildar, Palakkad informing them to be present before him on 7-2-2000 at 11 a.m., which was received on 4-2-2000. On 7-2-2000 the appellant attended the hearing and explained the fact that the building is intended to be used as a factory and a copy of Ext. P1 licence issued by the Director of Factories and Boilers was submitted to the Tahsildar. On that basis the appellant claimed exemption under Section 3(1)(b) of the Act. However, the appellant was issued demand notice under Section 10 of the Act, wherein which the appellant was directed to pay a sum of Rs. 1,67,400/- as building tax, This has been directed to be paid in four equal monthly instalments from 26-2-2000. A copy of the demand notice was also produced as Ext. P3. The appellant was also served with an assessment order made under R. 8(1) of the Kerala Building Rules, whereby a sum of Rs. 1,67,400/- has been assessed as building tax. Copy of the assessment order was also produced as Ext. P4. The appellant on receipt of Exts. P3 and P4 sent a reply to the 1st respondent stating that the appellant is a factory and hence in the light of Section 3(1)(b) of the Act, they are entitled to get exemption from building tax. A copy of the reply sent by the appellant to the 1st respondent on 21-2-2000 was produced as Ext, P5. Subsequently another demand notice under Section 7 of the Revenue Recovery Act for a sum of Rs. 1,67,400/- was issued which has been marked as Ext. P7. Therefore, the appellant filed the original petition challenging Ext. P4 assessment order and Exts. P3 and P7 notices.
3. The Government filed a counter-affidavit stating that the appellant appeared on 8-2-2000 and contended that they are eligible to get exemption under Section 3(1)(b) of the Act since a portion of the building is being used as a factory. It is further stated that the appellant failed to produce any evidence substantiating their claim. It is further stated that the report of the Village Officer also revealed that no machinery has been erected in the building said to be constructed as a factory. It is also submitted that the appellant herein is not entitled to get exemption since no satisfactory evidence was produced before the assessing authority at the time of assessment. The appellant placed reliance on the Division Bench judgment of this Court reported in Church of South India v. Tahsildar (1996) 1 Ker LT499 in support of its contention. However, the learned single Judge, placing reliance on the contention put forward by the Government Pleader that the assessing authority Is competent to consider whether a question of exemption arises for making reference under Section 3(2) of the Act and that the appellant had not placed any material before the assessing authority for establishing its case, came to the conclusion that the Division Bench judgment relied on by the appellant is not applicable and if the appellant has any grievance against Ext. P4 assessment order, it should file an appeal before the authority competent under the Statute. Accordingly the original petition was disposed of giving liberty to the appellant to file appeal. This writ appeal is directed against the said judgment.
4. Learned counsel for the appellant submitted that the judgment of the learned single Judge is on a misappreciation of the facts of the case and law in this regard and. therefore, is liable to be Interfered with.
5. Our attention was drawn to Section 3(1)(b) of the Act. The entire section Including explanation is reproduced hereunder :--
"3. Exemptions (1) Nothing in this Act shall apply to.
(a) buildings owned by the Government of Kerala or the Government of India or any local authority; and
(b) buildings used principally for religious, charitable or educational purposes or as factories or workshops.
Explanations :00 For the purposes of this sub-section, "charitable purpose" includes relief of the poor and free medical relief.
(2) If any question arises as to whether a building falls under Sub-section (1) or under Section 3-Ait shall be referred to the Government, and the Goverment shall decide the question after giving the interested parties an opportunity to present their case.
(3) a decision of the Goverment under Sub-section (2) shall be final and shall not be called in question in any Court of law."
It is the case of the appellant that even though the Assessing Officer was appraised of the fact that the appellant is a factory, the Assessing Officer, without taking note of the said contention and the document filed in support of the claim, has however, passed an assessment order. As per Section 3(1)(b) of the Act, If an establishment is used as a factory.
the same is liable to get exempted under the Building Tax Act. In fact the appellant had placed reliance on Ext. P1 licence issued by the Director of Factories and Boilers to substantiate the fact that the premises is going to be used as a factory. In such circumstances, when a claim was made by the appellant before the Assessing Authority that the building is liable to get exemption, the proper course which ought to have been adopted by the assessing authority was to refer the matter to the Government as stipulated in Section 3(2) of the Act. The action of the assessing authority in not doing the same and going ahead with the assessment and passing Ext. P4 assessment order is, therefore, in our opinion, not proper and legal.
6. In Tellicherry Madrassa Darussalam v. Assessing Authority (1989) 1 Ker LJ 783, this Court held as follows :--
"The moment a claim is put forward, it could be said that a question has arisen in relation to that claim. This is particularly so, if the claim is not immediately conceded. An adjudicable issue is there in the embryonic form. The legislature In its wisdom must have thought that rather than entrusting the adjudication on the questions of exemptions, to the assessing authorities, the Government itself is empowered to do so. It may serve a larger purpose so that adequate and well informed attention could be given to every aspect of the claim, it is quite likely that a busy assessing authority and of a lower cadre may be unable to grasp many a principle borrowed from the legal history of the working of the charitable institutions. Sometimes complicated and complex factual matters can arise. Even legal complications are not Insignificant. Whatever be the purpose, one thing is clear. The Government marked out for itself an area of adjudication. In that area, none can trespass upon. For the assessing authority, it is a prohibited area, it is doubtless so for the appellate or revisional authorities. Even an ordinary Civil Court is interdicted from entertaining such question, by a specific statutory provision under Section 3."
7. In Church of South India v. Tahsildar (1996) 1 Ker LT 499, a Division Bench of this Court had held that when a claim is made for exemption and when the claim is not immediately conceded to. the resultant position Is that a question would arise whether the exemption claimed should be granted or not.
Such question can be determined only by the Government. The Division Bench also observed that as the question has not been referred to the Government for decision, the Tahsildar has acted without jurisdiction in making the assessment without obtaining a decision from the Government. Accordingly, the Division Bench quashed the impugned assessment orders and directed the Tahsildar to refer the question whether the appellant therein was entitled to exemption under Section 3 of the Act to the Government for decision. Placing reliance on the Division Benchjudg-ment referred above, In the decision reported in Achamma Chacko v. Tahsildar (1999) 1 Ker LJ (NOC) 37 : (AIR 1999 Ker 252) this Court has held that when there is a dispute regarding the question as to whether a particular building is used for charitable purposes, dispute regarding the exemption from assessing the building can be decided only by the Government and that the Tahsildar has no power to assess the tax before obtaining a decision from the Government regarding the exemption. In the light of the above decisions, the learned single Judge is not correct in passing the judgment impugned in this appeal.
8. The judgment of the learned single Judge directing the appellant to file a statutory appeal before the authority concerned, if they have any grievance, is in our opinion, not legally permissible since the appellate authority also, as observed in the judgment reported in (1989) 1 Ker LJ 783. has no authority to look into the question of eligibility to get exemption under the Act.
9. Per contra, the learned Government Pleader cited a decision in Mathew P. Mathai v. State of Kerala (1989) 2 Ker LT 678, before the learned single Judge and contended that the assessing authority has the right to make an enquiry and find out whether a prima facie case has been established for referring the matter to the Government under Sub-section (2) of Section 3. Placing reliance on the abovesaid decision, the learned single Judge came to the conclusion that the Division Bench judgment on which reliance was placed by the appellant, i.e. (1996) 1 Ker LT 499, is not applicable to the case in hand.
10. We are of the opinion that the conclusion arrived at by the learned single Judge is not correct. As observed in Mathew P. Mathai v. State of Kerala (1989) 2 Ker LT 678, the appellant authority, when it had been ap-
praised of the provisions of Section 3(2) of the Act, ought to have set aside the assessment and remanded the case to the assessing authority with a direction to complete the assessment afresh after complying with the procedure prescribed under Sub-section (2) of Section 4. Instead, the appellate authority has arro-gated jurisdictlon into itself and decided the issue which order, the learned single Judge declared, is an order passed without Jurisdiction. Accordingly this Court set aside the orders of the assessing authority and the appellate authority and revlsional authority because of the fact that the matter was not referred to the Government and the assessing authority was directed to restore the proceedings for assessment and refer the question as to whether the building is eligible for exemption under Section 3(1)(b) to the Government for its decision. In view of the Division Bench judgment in Church of South India v. Tahsildar, reported in (1996) 1 Ker LT 499 the judgment on which reliance was placed by the Government Pleader has lost its significance. Hence the direction given by the learned single judge placing reliance on the Judgment reported in (1989) 2 Ker LT 678 has no basis. As already noticed, it is concluded by the learned single Judge that the Division Bench judgment in (1996) 1 Ker LT 499 does not affect the judgment referred earlier. On that account, the conclusion arrived at by the learned single Judge is erroneous in law.
11. This apart, on a consideration of the entire facts and circumstances of the case and the law on the subject, we are of the opinion that the Judgment reported in (1996) 1 Ker LT 499 will govern the case on hand. The resultant position is that the Tahsildar, the second respondent herein has to refer the matter under Section 3(2) of the Act as to whether the appellant is entitled to claim exemption under Section 3(1)(b) of the Act. Since the Tahsildar has acted without jurisdiction in making the assessment without obtaining a decision from the Government, the assessment made by the Tahsildar is liable to be set aside.
12. Accordingly Ext. P4 assessment order passed by the Tahsildar is set aside. The appellant is directed to place before the Tahsildar a fresh representation supported by documents relied on by him claiming exemption under Section 3(1)(b) of the Act and on receipt of the said representation, the Tahsildar shall forward the same to the Government for its decision. Now that we have quashed Ext. P4 assessment order, the consequential demand notices under Exts. P3 and P7 are also quashed. The fresh representation shall be made within two weeks from the date of receipt of the judg-ment and the Tahsildar to forward the same within two weeks thereafter to the Government. The Government will pass an order after affording opportunity to the appellant or his authorised representative.
The writ appeal is ordered accordingly.