The main legal point established is that rules prescribing property tax fixation must comply with the limits specified by the Government as per Section 233 of the Kerala Municipality Act, 1994.

JUDGMENT :

The petitioner, who is owner in possession of a building in Taliparamba Municipality, seeks to declare that Rule 9(4A) and Rule 9(4C) of the Kerala Municipality (Property Tax, Service Tax and Surcharge) Rules, 2011 which prescribes fixation of Property Tax at a minimum of 25% over and above the tax levied for the previous year even if Property Tax arrived at on computation as per the said Rules is less than the tax levied for the previous year, is ultra vires Section 233 of the Kerala Municipality Act, 1994. The petitioner also seeks refund of excess tax levied from the petitioner in respect of his building.

2. The petitioner is the owner of building bearing Nos.XII/559-A, D, E, F, H, I, M, N, O, R, S and U to Y of Taliparamba Municipality. The entire buildings were assessed to Property Tax by the Municipality prior to 01.04.2011 on the basis of annual rental value and the tax was paid by the petitioner. The Property Tax of the buildings were fixed arbitrarily and the petitioner had filed representation to re-fix the tax reasonably.

3. In the meantime, the system of taxation was substituted by the amendment of Section 233 of the Kerala Municipality Act, 1994. As per the new system, the tax is to be fixed on the plinth area basis with allowances and additions. Rules 9(4A) and 9(4C) of the Kerala Municipality (Property Tax, Service Tax and Surcharge) Rules, 2011 prescribe fixation of Property Tax at 25% over and above the existing property tax levied, denying any benefit of the amended provision of Section 233. The said Rule is ultra vires Section 233 of the Kerala Municipality Act, 1994 and without any authority of law.

4. As per Article 265 of the Constitution of India, no tax shall be levied or collected except by authority of law.

Hence, the said rule is liable to be declared ultra vires and is liable to be quashed, contended the petitioner.

5. Respondents 1 and 2 resisted the writ petition. The respondents stated that the fixation of property tax on the basis of annual value of the building led to several complaints and objections which culminated in the substitution of Section 233 of the Kerala Municipalities Act, 1994. Prior to the substitution, the property tax was levied on the basis of annual value of the building or lands. The Government of Kerala promulgated the Kerala Municipality (Property Tax, Service Tax and Surcharge) Rules, 2011 by exercising the power conferred under Sections 230, 231, 233 read with Section 565 of the Kerala Municipality Act, 1994. The 1st respondent issued G.O.(P) No.17/2011/LSGD dated 14.01.2011 in exercise of the powers conferred under Section 233 of the Kerala Municipality Act fixing the minimum and maximum of the basic property tax per square metre in accordance with the use of the building.

6. Thereafter, the Government issued G.O.(P) No.100/2013/LSGD dated 15.03.2013 amending the Kerala Municipality (Property Tax, Service Tax and Surcharge) Rules, 2011 inserting various provisions including Rules 9(4A) and 9(4C) of the Kerala Municipality (Property Tax, Service Tax and Surcharge) Rules, 2011. G.O.(MS) No.144/2015/LSGD dated 27.04.2015 clearly says that while determining the annual property tax of the commercial and industrial building for the first time on the basis of plinth area, and if there is any increase in annual property tax, the same shall not exceed hundred percent. The Government Order further says that necessary amendments will be brought to the Rules concerned.

7. In the light of Ext.R2(d) Government Order, the petitioner's apprehension regarding Rule 9(4C) does not subsist. The contention of the petitioner in the writ petition to the effect that the property tax collected from the petitioner for the period from 01.04.2011 is without any authority of law as the same is collected under the old provision of Section 233, is misconceived. Exts.R2(b) to R2(f) Government Orders were issued only to reduce the tax burden. Unfortunately, due to the complexity involved in fixation