IMPORTANT POINT
The court upheld the validity of property tax assessments under the Kerala Municipality Act, confirming substantial compliance with procedural requirements and a three-year limitation for tax recovery.

JUDGMENT :

Petitioners are all owners of buildings situated within the limits of Kochi Corporation. They have challenged the demand notices issued to them, demanding property tax in relation to the buildings owned by them for the period from 2016-17 till the date of demand notice. Reliefs are also sought for a declaration that the provisions of the Kerala Municipality Act, 1994 (for short ‘the Act’) do not permit enhancement of property tax with retrospective effect. Since the issues arising are similar, all these writ petitions are disposed of by this common judgment. W.P.(C) No.13370/2021 is treated as the leading case and the facts and exhibits wherever referred to, are stated from the said writ petition.

2. Petitioner is the owner of a room in a commercial building in Ernakulam. The property tax due for the building has already been paid till the first half of the year 2020-21. In the year 2009, provision for property tax in the Act was amended. Though rules were framed in 2011, the Municipal Council failed to fix the minimum and maximum limits of rates of the basic property tax. However, by Ext.P4, served on 24-06-2021, property tax computed as per the new rates were demanded for the period from 01-04-2016 till 31-03-2021. Petitioner has pleaded that the levy of property tax has been carried out without complying with the provisions of the Act or the Rules and further that the required deductions have not been granted while calculating the tax. Petitioner asserted that the fixation of property tax was irrational and arbitrary and hence sought to quash the demand notice issued to it and also sought for a direction to reassess the property tax after complying with the Rules.

3. Counter affidavits have been filed by the first respondent dated 13.06.2024 and 28.01.2025. According to the first respondent, pursuant to section 233 of the Kerala Municipality Act, 1994 (for short 'the Act'), the Kerala Municipality (Property Tax, Service Cess and Surcharge) Rules, 2011 (hereinafter referred to as 'the Rules') came into force on 14.01.2011, and the minimum and maximum limits of rates of basic property tax were also notified by an Order of the same date. It is pleaded that the Council had, by a resolution dated 01.08.2011 bearing No. 63/2011 fixed the rates of basic property tax for buildings situated within the limits of Kochi Corporation. Thereafter, the Council had, by Resolution No.12 dated 16.11.2011, produced as Ext.R1(c), proposed to divide 74 divisions of the Corporation into prime, secondary and tertiary zones for the purpose of fixation of the annual property tax and invited objections from the public as per Ext.R1(d) publication in the newspaper. According to the respondents, the requirements of rule 4(1), (2) and rule 7 were thus complied with.

4. Respondents further pleaded that the Municipal Council had by Ext.R1(y) resolution dated 12.04.2012 bearing No.115, decided to implement the revised rates of basic property tax as per the Rules with effect from 01.04.2013 and the notification to that effect was published as per Ext.R1(e). In the meantime, the Government had brought out certain amendments on 15.03.2013 to the Rules and the same was also decided to be implemented as per resolution dated 14.06.2013. Thereafter, Ext.R1(p) public notice in Form-1 dated 17.12.2013 was published in the Mathrubhumi daily on 24.12.2013, and the owners of buildings were called upon to submit returns in Form-2 within 30 days. According to the respondents, consequent to the aforesaid publication, the property tax of the buildings were assessed as per the details noted in the property tax assessment register.

5. In the additional affidavit filed by the first respondent, it is stated that, in respect of those who filed returns in Form 2, intimation of property tax assessment was given in Form 5, while in respect of those who had not filed their returns in Form 2, intimation is being given in Form 7. In I.A. No.1 of 2025, the first respondent has