Case Law Details
A One Milk Products Pvt. Ltd. Vs State of Kerala (Kerala High Court)
Kerala High Court has affirmed the imposition of triple tax on buildings constructed without proper authorization, dismissing a writ petition filed by A One Milk Products Pvt. Ltd. and its Managing Director. The Court’s decision, delivered in the case of A One Milk Products Pvt. Ltd. Vs. State of Kerala, underscores the critical importance of documentary evidence to substantiate claims of “deemed permit” for construction activities.
The petitioners, a limited company engaged in the dairy milk and related products business since 1999, approached the High Court challenging assessment orders and recovery notices issued under the Kerala Panchayat Raj Act. Their grievance stemmed from the 3rd respondent’s action of assigning “unauthorized numbers” to ten buildings constructed by the petitioners in 2016 and subsequently imposing a tax three times the actual rate. The total amount demanded through revenue recovery proceedings reached Rs. 11,99,646/-.
According to the petitioners, they had initiated construction of these ten buildings in 2016 after submitting appropriate applications for building permits to the Panchayat. They contended that since the 3rd respondent failed to issue the necessary permissions within the statutory period, they acquired a “deemed permission” to commence and continue their construction. This claim of deemed permission, they argued, rendered the subsequent actions of assigning unauthorized numbers and levying triple tax legally unsustainable.
Following the 3rd respondent’s order dated May 18, 2022 (Ext.P1), which allotted unauthorized numbers and imposed the triple tax, the petitioners filed an appeal (Ext.P2) before the 4th respondent. However, this appeal was rejected by an order dated Ext.P3. Based on this rejection, a series of notices (Ext.P4 to P14) were issued, initiating revenue recovery proceedings against the petitioners. It was in these circumstances that the petitioners filed the writ petition before the High Court.
During the High Court proceedings, Sri. B.S. Sivaji, the learned counsel for the petitioners, reiterated the argument that the Panchayat’s failure to act on their permit applications within the statutory period granted them a deemed permit, making the triple tax imposition illegal. Smt. Jasmin M.M., the learned Government Pleader, represented the State.
The High Court, presided over by a Single Judge, meticulously examined the petitioners’ contentions. The Court observed that despite the petitioners’ assertion of having submitted permit applications and thereby acquiring a deemed permit, “absolutely no documents are produced indicating the submission of any application for permit and the rejection of the same.” The Court emphasized that it is the burden of the petitioners to establish their claim of a deemed permit by producing the necessary supporting documents. In the absence of such fundamental documents, the Court found the petitioners’ contention regarding a deemed permit untenable.
Furthermore, the petitioners argued that their appeal (Ext.P3) was dismissed without providing them an opportunity for a hearing. The High Court, however, dismissed this contention as well. It noted that even at the stage of the writ petition, more than two years after the assessment, the petitioners had still failed to produce the basic documents required to substantiate their claims. The Court reasoned that granting a further opportunity for hearing would be an “empty formality” if the essential documents to establish their case were still missing.
An additional reason for rejecting the petitioners’ arguments stemmed from their own actions. The Court noted that while the petitioners claimed the buildings were completed in 2016, Ext.P1 (the assessment order) referenced several applications submitted by the petitioners in 2019, 2020, 2021, and 2022, seeking regularization of the already constructed buildings. These regularization applications had reportedly been rejected, and there were no records to show that these rejections were challenged. This indicated that the petitioners themselves had, on multiple occasions post-2016, sought regularization, which implicitly contradicted their claim of having a deemed permit from 2016.
In its final judgment, the Kerala High Court dismissed the writ petition, thereby upholding the legal sustainability of the impugned assessment orders and recovery notices. The Court’s decision reinforces the principle that claims of deemed permission require concrete documentary proof of the initial application and the authorities’ inaction. Without such evidence, a mere assertion of deemed permission is insufficient to challenge actions taken against unauthorized constructions. The Court did, however, clarify that the petitioners retain the option to pursue the regularization of their buildings by following the prescribed legal procedures.
It is pertinent to note that the judgment, as provided in the text, does not explicitly cite any specific judicial precedents from other High Courts or the Supreme Court. The Court’s reasoning is based on its interpretation of the Kerala Panchayat Raj Act and the fundamental principles of evidence and due diligence required from parties asserting a legal right.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The 1st petitioner is a limited company and the 2nd petitioner is the Managing Director of the 1st respondent company. The petitioners have been engaged in the business of Dairy Milk and related products since 1999 onwards. The petitioners have approached this Court by filing this writ petition being aggrieved by, Exts.P1, P3 and P14, which are the assessment orders under the provisions of the Kerala Panchayat Raj Act and also the recovery notices issued pursuant to the same. The facts which led to the filing of this writ petition are as follows:
According to the petitioners, they had constructed ten buildings for the purpose of using the same for their business, in the year 2016. According to the petitioners, the constructions were made after submitting proper applications in this regard. However, as the 3rd respondent failed to issue appropriate permissions within the statutory period, the petitioners had attained the right to commence and continue the construction, as according to them they obtained a deemed permission to do so. Later, as per Ext.P1 order dated 18.05.2022 the 3rd respondent passed an order, allotting unauthorized number to the aforesaid building, by imposing the tax upon the building three times of the actual tax. As against Ext.P1, Ext.P2 appeal was submitted before the 4th respondent. However, the said appeal was rejected by the 4th respondent as per Ext.P3, order. Based on the same, Ext.P4 to P14 notices were issued as part of the revenue recovery proceedings initiated against the petitioners. The total amount demanded is Rs.11,99,646/-. This writ petition is submitted by the petitioners in such circumstances.
2. I have heard Sri.B.S Sivaji, the learned counsel appearing for the petitioners and Smt. Jasmin M.M, the learned Government Pleader for the State.
3. The specific contention raised by the learned counsel for the petitioners is that, the action on the part of the respondents in assigning unauthorized number to the building and imposing three times of actual tax is not legally sustainable, in view of the fact that the construction was commenced and completed, on the basis of the application submitted by the petitioners before the Panchayat for building permit but the same was not considered and therefore the petitioners have the right to carry out the constructions based on the deemed permit, as the statutory period expired. However, apart from merely raising the said contention, absolutely no documents are produced indicating the submission of any application for permit and the rejection of the same. Even though an appeal was submitted, before the 4th respondent, during the pendency of the appeal also, no documents indicating the same were produced. Therefore, since the petitioners are raising a contention, with regard to the deemed permit and claiming protection from the proceedings, it is the burden of the petitioners to establish the same by producing necessary documents in this regard. In the absence of any documents indicating the submission of application for permit and inaction on the part of the Panchayat in considering the said application, the contention of the petitioners as to the deemed permit cannot be accepted. Those are the basic documents which are required to establish the case of the petitioners and in the absence of the same, the contention of the petitioners cannot be entertained.
4. As far as the contention raised by the petitioners to the effect that Ext.P3 appeal was passed, without giving the petitioners an opportunity for hearing, the crucial aspect to be noticed is that, since the basic requirement of documents to establish the contentions raised by the petitioners were not placed on record even at this point of time, i.e., after more than two years of the assessment, I do not find it necessary to entertain the said contention as well. This is particularly because, even if an opportunity is granted to the petitioners, in the absence of any documents as referred to above, it could not have been possible for the petitioners to establish the said case. Therefore, granting a further opportunity would be merely reduced to an empty formality. Moreover, even though this writ petition is submitted in the year 2023, even now, no documents are produced to substantiate the contention that an application for permit was indeed submitted by them, before the authorities concerned.
5. There is yet another reason on the basis of the contention of the petitioners regarding the deemed permit is required to be rejected. According to the petitioners the building had been completed in the year 2016. However, in Ext.P1, there is reference of several applications submitted by the petitioners in the year 2019, 2020, 2021 and 2022 seeking regularization of the constructions which were already rejected. Therefore, as the regularization applications were rejected and there are no records to show the challenge raised against the same, I am of the view that the contention of the petitioners is to be rejected on this reason also.
In such circumstances, this writ petition is dismissed, upholding the legal sustainability of the impugned orders. However, it is clarified that, it shall be open for the petitioners to take necessary steps to get the building regularized by following the procedure, in accordance with law.
Author Bio
