The Act's imposition of tax solely on the basis of floorage, without considering other relevant factors such as value or income, violated the equality guaranteed by Art.14 of the Constitution.

Headnote:
Kerala Buildings Tax Act - Ultra Vires of Art.14 - S.1, S.4, S.2(d), S.3, S.2(e), S.5 - The Act levies tax solely on the basis of floorage, ignoring other relevant considerations such as value or income, violating the equality guaranteed by the Constitution. The classification based on floorage lacks rationality and does not achieve the object of the Act. The Act is struck down as violative of Art.14 of the Constitution.
Fact of the Case:

The State of Kerala appealed a judgment holding the Kerala Buildings Tax Act, 1961, ultra vires of Art.14 of the Constitution, as it levies tax solely on the basis of floorage, disregarding other relevant considerations such as value or income.
Finding of the Court:

The court found that the Act's classification based on floorage lacked rationality and did not achieve the object of the Act, leading to inequality in the distribution of the burden of taxation. As a result, the Act was struck down as violative of Art.14 of the Constitution.
Issues: The issues revolved around the validity of the Kerala Buildings Tax Act, 1961, in light of Art.14 of the Constitution, and whether the Act's imposition of tax solely on the basis of floorage violated the equality guaranteed by the Constitution.
Ratio Decidendi: The Act's classification based on floorage lacked rationality and did not achieve the object of the Act, leading to inequality in the distribution of the burden of taxation, thereby violating Art.14 of the Constitution.
Final Decision: The court dismissed the appeals and struck down the Kerala Buildings Tax Act, 1961, as violative of Art.14 of the Constitution.

Judgment :-

1. These appeals by the State of Kerala are from a common judgment holding that the Kerala Buildings Tax Act, 1961, is ultra vires of Art.14 of the Constitution which provides that the State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. Entry 49 in List II (State List) of the Seventh Schedule to the Constitution empowers the State to impose taxes on lands and buildings; and the contention of the State is that the Kerala Buildings Tax Act, 1961, embodies a valid exercise of that power and that it does not in any way violate the equality guaranteed by the Constitution.

2. The Act, as directed in S.1, extends to the whole of the State and has to be deemed to have come into force on the 2nd of March 1961. The charging section is S.4. It consists of two sub-sections and three explanations,

3. Sub-section (1) of S.4 provides that subject to the other provisions contained in the Act, there shall be charged a tax at the rate specified in the schedule to the Act in respect of every building the construction of which is completed on or after the 2nd March 1961 and which has a floorage of one thousand square feet or more; and sub-section (2) of that section, that the tax shall be payable by the owner of the building. The three explanations read as follows:

"Explanation 1. For the purposes of this section, the construction of a building shall be deemed to have been completed when it is ready for occupation or has been actually occupied, whichever is earlier.

Explanation 2. A building, which is not liable to be taxed under the provisions of this Act on account of its having a floorage of less than one thousand square feet, shall become liable to be so taxed if the floorage of the building is subsequently increased to one thousand square feet or more as computed in the manner specified in S.5 by new constructions or additions or combinations.

Explanation 3. Where the floorage of a building, which has already been taxed, is subsequently increased by new extensions or additions or combinations, tax shall be computed on the total floorage of the building including that of the new extensions or additions or combinations, and credit shall be given to the tax already levied and collected in respect of the building before such extensions or additions or combinations."

4. The expression "building" is defined in S.2 (d) of the Act. The definition is:

"'building' means a house, out-house, garage, or any other structure, or part thereof, whether of masonry, bricks, wood, metal, or other material, but does not include any portable shelter or any shed constructed principally of mud, bamboos, leaves, grass or thatch or a latrine which is not attached to the main structure."

5. S.3 of the Act exempts certain buildings from the operation of the Act. They are buildings owned by the State Government, the Central Government or any local authority; and buildings used principally for religious, charitable or educational purposes or as factories or workshops. There is an explanation to S.3. It says that "charitable purpose" includes relief of the poor and medical relief.

6. The expression "floorage" is defined in S.2 (e) of the Act. The definition is: "'floorage' means the area included in the floor of a building, and, where a building has more than one floor, the aggregate area included in all the floors together."

7. The computation of floorage is dealt with in S.5 of the Act. It provides that the following provisions shall apply:

"(1) Where a building has only one floor, the floorage shall be the total area occupied by the basement of the building.

(2) Where a building has more than one floor, the floorage shall be the aggregate of the area occupied by the basement of the building and the areas covered by each of the floors above the basement.

(3) Where there are out-houses, garages, or other structures appurtenant to the main building, the floorage of such structures shall be computed i

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1966 Supreme(Ker) 129

The Act's imposition of tax solely on the basis of floorage, without considering other relevant factors such as value or income, violated the equality guaranteed by Art.14 of the Constitution.

Cases Referred (2)