Property Tax Applicable from Date of Occupancy Certificate Issuance

Baiju Vs Secretary (Kerala High Court)

Kerala High Court held that the property tax can be levied on the building which becomes capable of use for residential purposes or other purposes. Hence, municipality is entitled to recover the property tax only from the date of issuance of occupancy certificate.

Facts- Present writ petition is filed u/s. 226 of the Constitution of India impugning the demand notices. Notably, 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 19^th Feb 2015. However, the occupancy certificate was issued only on 01.02.2017 by the respondent Municipal Corporation. The impugned demand notices are in respect of the property tax for the period from 1^st October 2014 to 28^th February, 2017.

Conclusion- If subsection 2 (a) of Section 233 is read in proper perspective, it could mean that the tax can be levied on the building which becomes capable of use for residential purposes or other purposes which is defined under Subsection 2(a). It is not in dispute that without occupancy certificate, the building would not get numbered and electricity, water and gas connections would not be provided to such building. If these facilities are not provided, the building does not become capable of being used for residential purposes or other purposes as defined in Subsection 2(a).

Held 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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