The main legal point established in the judgment is that the recovery of dues under the Kerala Municipality Act, 1994 is subject to limitations prescribed in Section 539, and the imposition of taxes must adhere to the provisions outlined in Section 230 and Section 231.

JUDGMENT :

This writ petition is filed by an English Medium CBSE School within the limits of the Kottayam Municipality. The issues raised in the writ petition are two fold. First aspect is, Ext. P1 demand notice issued by the Municipality dated 19.05.2009 imposing service tax of Rs.2,36,406/-cannot be sustained under law, since it is imposed from the financial year 2001-2002 onwards and as per Section 539 of the Kerala Municipality Act, 1994 ('Act, 1994' for short), any amount due to the Municipality can be recovered only if it is within a period of three years. Therefore, according to the petitioner, through a notice issued on 19.05.2009, the service tax sought to be realised from the year 2001-2002 cannot be recovered. Which thus means, the recovery exceeding a period of three years is prohibited under law and therefore, interference is required, is the contention.

2. The second aspect is in respect of the property tax imposed as per Ext.P5 order dated 16.11.2010 directing the petitioner to pay an amount of Rs.33,740/-annually. According to the petitioner, as per Section 235 of the Act, 1994, as it originally stood, there was exemption from the property tax to all educational institutions. However, consequent to an amendment made in the year 2009, the exemption in regard to the schools was limited to the Government and the Government Aided Schools. But, the tax was imposed without providing sufficient opportunity of hearing and participation to the petitioner. Anyhow, to Ext. P5 notice, petitioner has submitted Ext. P6 reply, however apprehending coercive action before any orders are passed finally on the same, the petitioner has approached this Court by filing this writ petition.

3. This writ petition was pending before this Court from the year 2011, and the petitioner has secured an order of status quo from the date of admission of the writ petition.

4. A detailed counter affidavit is filed by the Secretary and the Municipality jointly refuting the allegations and the claims and demands raised by the petitioner and also submitting that the entire action initiated by the Municipality is in terms of the provisions of the Act, 1994 and therefore, the petitioner has not made out any case for interference with the demands raised, invoking the discretionary jurisdiction conferred on this Court under Article 226 of the Constitution of India.

5. I have heard the learned Senior Counsel for the petitioner Sri. N. N. Sugunapalan assisted by Sri. Navaneet Pai, Sri. Siby Chenappady appeared for the Municipality, and Sri. Surin George Ipe, learned Senior Government Pleader, and perused the pleadings and materials on record.

6. The discussion of facts made above would make it clear that the subject issue in respect of the recovery of service tax is guided by Section 539 of the Act, 1994, which reads thus:

“539. Limitation for recovery of dues.— (1) No distraint shall be made, no suit shall be instituted and no prosecution shall be commenced in respect of any sum due to a Municipality under this Act after the expiration of a period of three years from the date on which distraint might first have been made, suit might first have been instituted, or prosecution might first have been commenced, as the case may be, in respect of such sum:

Provided that in the case of assessments made under section 282 the said period of three years shall be computed from the date on which distraint might have been made, suit instituted, or prosecution commenced, after the assessment under the said section shall have been made.

(2) Where any amount due to the Municipality has been barred by limitation under sub-section (1) due to the default of not taking steps at the appropriate time, and it is found in a lawful enquiry that it was lost due to the default of any officer or officers, the amount so lost to the Municipality shall be realised with twelve per cent interest thereon from such officer or officers.”

7. Therefore, on a reading of Section 539, it is categoric an