IMPORTANT POINT
The court emphasized that while substantial compliance with procedural requirements is acceptable, strict adherence to the prescribed form for demand notices is mandatory, and the limitation for tax recovery is three years.

JUDGMENT :

Petitioners in all these writ petitions are owners of commercial buildings situated in Kottayam Municipality. They challenge the demand notices issued to them demanding property tax for their respective buildings. In some of the writ petitions, the Government Order dated 06-03-2019, directing collection of property tax on plinth area basis from 01-04-2016 is also challenged.

2. W.P.(C) No. 29844 of 2022 is treated as the leading case in this batch of writ petitions. Petitioner in the said writ petition is the owner of two buildings in Kottayam and had been paying property tax upto second half of 2021-22. However, in 2022, she was served with two demand notices for property tax for a period of five years i.e., from 2016-17 onwards. According to the petitioner, the demand notices have been issued without complying with the procedure prescribed by law for assessing property tax and that tax has been demanded with retrospective effect, with one hundred percent hike from the existing rate of tax. Petitioner also alleges that demand has been made without even giving credit to the tax already paid till the second half of 2021-22. Petitioner has also pleaded that the demand of property tax is barred by limitation and that tax has been assessed without following the requirements of law and hence the demands are unenforceable.

3. In W.P.(C) No.8590 of 2023 and a few other cases, apart from challenging the mode of assessment, it is also pleaded that the demand notices have not been issued in the form prescribed under the Rules and hence the demand notices are without authority of law. In some of the petitions, petitioners have sought for directions to conduct a fresh assessment of property tax for the buildings involved therein as per the provisions of the applicable statutory provisions. Petitioner in W.P.(C) No.10624 of 2023, has also challenged the Government Order dated 06-03-2019, permitting levy of property tax with effect from 01-04-2016.

4. In the counter affidavit dated 20-11-2023, the respondent Municipality has averred that the statute provides for an efficacious alternative remedy to challenge the demand notice and that the petitioners ought to be relegated to pursue the said remedy. It is pleaded that the date of levy of revised property tax as per the Kerala Municipality (Property Tax, Service Cess, and Surcharge) Rules 2011, (for short ‘the Rules’) was extended from time to time by the State Government and finally by an Order dated 06-03-2019, the tax as per the Rules were directed to be collected from 01-04-2016, and that the demand notices have been issued in consonance with the said Government Order. The respondents asserted that the procedure prescribed for assessing property tax as per the Rules had been scrupulously complied with, before issuing the demand notices. It is also pleaded that demand notices do not fall within the category of distraint, suit, or prosecution as prescribed under section 539 of the Kerala Municipality Act , 1994. Respondents have also pleaded that the issuance of demand notice is the starting point of limitation of three years to initiate proceedings for recovery of the said amount and therefore the contention on the basis of limitation is misconceived.

5. It is specifically pleaded that as per Decision No.1 of 22.02.2014 and 11 of 30.09.2011 of the Municipal Council, the area within Kottayam Municipality was divided into various zones and the roads were categorised based on their width and also that wide publicity of the same was given through newspapers and in the noticeboard of the Municipality and objections were called for from the general public as per Ext.R1(b). Thereafter, the Council finalised the basic rates of property tax per square metre of plinth area as per its decision No.1 dated 20-06-2014, which was published in the Malayala Manorama and Mathrubhumi dailies on 08-07-2014, and also in the noticeboards of the Municipality as per Ext.R1(c). According to the respondents,