Burden To Prove Application For 'Deemed Permit' Lies On Petitioner, Not Panchayat: Kerala High Court - 2025-10-02

Kerala HC Upholds Triple Tax on Company for Unauthorized Construction, Stresses Onus of Proof for 'Deemed Permit'

Ernakulam, Kerala - The Kerala High Court, in a significant ruling, has dismissed a writ petition filed by A One Milk Products Pvt. Ltd., upholding the local Panchayat's decision to levy a triple property tax on buildings constructed without a valid permit. Justice Ziyad Rahman A.A. affirmed that the burden of proof to establish a 'deemed permit' for construction lies squarely on the petitioner, who must produce concrete evidence of having submitted an application for the permit.

The court's decision reinforces the principle that a mere assertion of having applied for a permit is insufficient to claim the benefit of a deemed permission, especially when challenging subsequent penal actions by local authorities.

Background of the Case

The case was brought by A One Milk Products Pvt. Ltd. and its Managing Director against the State of Kerala and the local Panchayat. The company contended that it had constructed ten buildings for its dairy business in 2016 after the Panchayat failed to act on its permit application within the statutory timeframe, thereby granting them a 'deemed permission' to proceed.

However, in May 2022, the Panchayat issued an order (Ext.P1) assigning an "unauthorized" number to the buildings and imposing a property tax three times the normal rate, totaling ₹11,99,646. The company's subsequent appeal was rejected (Ext.P3), leading to revenue recovery notices and the present writ petition before the High Court.

Arguments and Court's Analysis

The petitioner’s counsel, Sri. B.S Sivaji, argued that the penal tax was illegal because the construction was carried out under the legal fiction of a deemed permit as per the Kerala Panchayat Raj Act.

The High Court, however, found this argument entirely unsubstantiated by evidence. Justice Rahman noted a critical failure on the part of the petitioners:

> "apart from merely raising the said contention, absolutely no documents are produced indicating the submission of any application for permit... 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."

The Court emphasized that the responsibility to prove that a valid application was submitted rests with the party making the claim. Since the petitioners failed to produce any such documentation, either during the initial assessment, the appeal, or even before the High Court, their central argument collapsed.

The Court also dismissed the petitioner's claim of not being given a fair hearing during the appeal, deeming it an "empty formality" since they lacked the basic documents to prove their case anyway.

Further weakening the petitioner's stance, the judgment pointed out that the company had submitted multiple applications between 2019 and 2022 seeking to regularize the very same constructions, all of which were rejected. The Court observed that these actions contradicted the claim of having built under a deemed permit from 2016.

Final Decision and Implications

In dismissing the writ petition, the High Court upheld the legality of the Panchayat's assessment orders and the subsequent recovery proceedings. Justice Ziyad Rahman A.A. concluded that the petitioners' contentions were without merit due to a complete lack of documentary evidence.

However, the Court left a window open for the company, clarifying 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."

This judgment serves as a stern reminder to builders and companies that the provision of 'deemed permission' is not an automatic right and must be supported by irrefutable proof of application submission. The ruling strengthens the hand of local self-governing bodies in taking punitive action against constructions that do not adhere to statutory approval processes.