Perinthalmanna Municipality Vs Abdul Kareem (Kerala High Court)
Conclusion: Property tax couldn’t be levied without following statutory assessment procedure under Section 233 of Kerala Municipality Act, 1994 as in the absence of a valid levy, there could not have been an assessment to tax, or a collection of the said tax, since the mandate of Article 265 of the Constitution required both the levy and collection of tax to be backed by the authority of law.
Held: In the instant case, the challenge in the writ petitions against the demand for arrears of property tax by assessee Municipality was that the demand notices were issued without assessing the basic property tax and annual property tax as per the mandatory procedure prescribed under Section 233 of the Kerala Municipality Act read with the Kerala Municipality (Property Tax, Service Cess and Surcharge) Rules, 2011 and in particular, Rules 4 and 10 of the 2011 Rules. Assessee submitted that in the light of the documents produced before the Single Judge, that clearly showed compliance with the procedure contemplated under Rule 4(2) of the 2011 Rules, assessee Municipality had to be seen as having substantially complied with the requirements under Section 233 of the Kerala Municipality Act and Rules. It was held that Rule 10 of Kerala Municipality (Property Tax, Service Cess and Surcharge) Rules, 2011 observed that the procedure for assessment of property tax could begin only with the filing of a return pursuant to the publication of a notice under Rule 10, which contained details helpful to the owners of buildings to assess the basic property tax and annual property tax of the buildings by themselves. It was only if the owners of the buildings fail to file their returns within 30 days of that notice that the Municipality can proceed to unilaterally collect the details necessary for an assessment and complete the assessment against the owners of buildings. In the absence of a valid levy, there could not have been an assessment to tax, or a collection of the said tax, since the mandate of Article 265 of the Constitution required both the levy and collection of tax to be backed by the authority of law. Since there was no effective levy of tax, the contention of assessee that the respondents had an effective alternate remedy by way of an appeal against the assessment orders, pales into insignificance. Assessee remedy being against assessments irregularly completed, and not against nonest assessments, could not be seen as an efficacious alternate remedy on the facts and circumstances arising in these appeals.
