The main legal point established in the judgment is that the Rules prescribing a period for revising property tax must not be contrary to the substantive provisions of the Act, and any notice for revising property tax must be in accordance with the prescribed Rules.

ORDER :

The appellant owns a lodging-cum-shopping complex viz. N.C.K. Tourist Home Pvt. Ltd. at Kozhikode, Kerala. There are nine buildings which are part of the shopping complex. The respondent, Kozhikode Corporation separately assessed the nine buildings having assessment nos. 5/3357, 5/33578, 5/3359, 5/3361, 5/3362, 5/3363, 5/3365, 5/3365-A and 5/3366. The Corporation issued notices to review the annual rental value of the building for five years period. On receipt of the notices, the appellant filed objections and the Corporation reviewed the property tax. Subsequently, the Secretary of the Corporation issued special notices on the ground that the annual rental value fixed with effect from 01.04.1995 is under assessment and proposed to revise the annual rental value of all the aforesaid assessments. Being aggrieved, the appellant filed a revision before the Commissioner objecting to the proposal. The Commissioner as per the proceedings No. A5/516/96-97 dated 16.07.1996 confirmed the proposal of enhancement. Aggrieved by the order of the Commissioner, the appellant preferred an appeal before the Standing Committee for Taxation and Finance of the respondent-Corporation which was dismissed. The appellant carried the matter by filing a Civil Miscellaneous Appeal before the District Court, Kozhikode contending inter alia that the proposal of enhancement within one year of the general revision was unjustified and unreasonable. The District Court dismissed the appeal stating that the question was only regarding the quantum of enhancement and no other grounds are taken in the appeal. The appellant being dissatisfied filed a revision petition before the High Court of Kerala which was dismissed by holding that the Commissioner of the Municipal Corporation has the power to amend the amount of tax payable in between the quinquennial revision as per the Rules.

2. As it is clear from the above, the notice for revising the property tax was given before the expiry of five years of the period. The appellant herein challenged this notice, taking shelter under Section 238 of the Kerala Municipalities Act, 1994 (hereinafter referred to as "the Act"), with the contention that it was not permissible for the respondent-authorities to make any revision in the property tax before the expiry of five years. This contention is not accepted, notwithstanding the existence of a categorical stipulation to this effect in Section 238 of the Act inasmuch as the High Court has fallen back to Rule 2A of the Taxation Rules which were made under the earlier enactments viz. Kerala Municipalities Act, 1960 and Municipal Corporations Act, 1961. For proper understanding of the matter, we re-produce herein below Section 238 of the Municipalities Act, 1994 as well as Rule 2A of the Taxation Rules.

"Section 238. Revision and time of payment of property tax - Subject to the rules made by Government the property tax shall be assessed and the half-yearly tax determined once in every five years and the half-yearly tax shall be payable by the owner of the assessed property within thirty days of the commencement of the each half-year.

Provided that except in the case of substantial improvements or addition to an existing building since the last assessment, the annual value of any building shall not exceed the limit, if any, fixed by the Government from time to time.

Provided that revision of tax after date of first April, 1998, shall come into force on the date fixed by the Government."

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"Rule 2A(i) If at any time it appears to the Standing Committee that any person or property has been inadequately assessed or inadvertently or improperly omitted from the assessment books relating to any tax, arithmetical error in the said books, it may direct the Commissioner to amend the said books in such manner as it deems just or necessary.

Provided that on such direction shall be given where it involved an increase in the assessment, unless the person concerned shall have been affo