Ownership for taxation lies with the entity maintaining legal title unless a registered conveyance exists, despite funding construction by individual members.

JUDGMENT :

Easwaran S., J.

1. This intra court appeal is preferred by the petitioner aggrieved by the dismissal of the Writ Petition No.40431 of 2024. We are called upon to decide whether a multi storied residential complex constructed out of the funds of a group of persons is liable to be taxed against the owner/person who constructed it or is against the individual members for whose benefit the said flat is constructed.

2. Succinctly, the brief facts for disposal of the appeal are as follows:

2.1 The appellant is a house construction society registered under the provisions of Section 7 of the Kerala Co-operative Societies Act, 1969. The appellant society purchased the land on behalf of its members for construction of a multi-storied apartment complex in Survey No.92/8-3, 8-5, 8-1 and 8-2 located within the Karumalloor Village, Paravur Taluk. On 11.1.2020, the Occupancy Certificate was issued by the Karumalloor Panchayath. The appellant states that the society had constructed the said building for its members and it ought to have been assessed with the tax under the applicable law and not as a single unit. Although the ownership still vests with the society, the 120 individual apartments of the building are in possession of its individual members and hence the members individually are liable to pay the one time tax under the Kerala Building Tax Act, 1975.

2.2. On 25.1.2021, the Tahsildar assessed the building as a whole and an amount Rs.39,82,800/- was demanded from the petitioner as tax. At the time of levy, the society could not execute individual sale deeds in favour of 120 members since there was some dispute regarding the quantum of stamp duty to be paid in respect of sale deeds. The appellant contends that the flats are allotted as per 120 allotment letters and, for which, 120 separate sale agreements have been executed and that separate electricity connections for 120 flats are taken.

2.3. Aggrieved by the order of assessment, an appeal dated 22.03.2021 was preferred by the appellant which came to be dismissed on 25.7.2023. It is contended that, while dismissing the appeal, the Revenue Divisional Officer (R.D.O.) had apparently relied on a report of the Tahsildar dated 4.5.2022. Aggrieved by the dismissal of the appeal by the R.D.O., the society preferred a Revision Petition under Section 13 of the Kerala Building Tax Act, 1975 which came to be dismissed by Ext.P7 order. Challenging Ext.P7 order, the petitioner approached the writ court for a declaration that the petitioner is not liable to be assessed under the provisions of the Kerala Building Tax Act and it is the individual owners who are liable to be taxed. The learned Single Judge dismissed the writ petition in limine without even calling upon the State to answer the various contentions raised in the writ petition. Thus, the appellant is in appeal before us.

3. Heard Smt. John Nellimala Sarai, the learned counsel appearing for the appellant and Smt. Resmitha Ramachandran, the learned Government Pleader appearing on behalf of the State.

4. The learned counsel appearing for the appellant submitted that in the light of the Explanation 2 to Section 2(e) of the Kerala Building Tax Act, 1975, where a building consists of different apartments or flats owned by different persons and the cost of construction of the building was met by all such persons jointly, each such apartments or flat shall be treated as a separate unit. While issuing the order of assessment, the assessing authority has not taken into consideration the Explanation 2 to Section 2(e) of the Act and therefore the assessment becomes bad. The learned counsel further pointed out that, going by the definition of owner under Section 2(i), the “owner” includes a person who for the time be