The legislative competence to levy luxury tax is not affected by the constitutional amendment that removed taxes on luxuries, allowing for tax recovery under the Kerala Building Tax Act.

JUDGMENT :

A.K. Jayasankaran Nambiar, J.

The petitioner in WP(C) No.3603 of 2020 is the appellant before us aggrieved by the judgment dated 02.06.2020 of a learned Single Judge dismissing his Writ petition.

2. The brief facts necessary for the disposal of this Writ Appeal are as follows:

The appellant is the owner of a residential building having a plinth area of 289.22 sq.m. comprised in Sy.No.82/8-1 in Chethipuzha Village in Chenganasherry Taluk. In the Writ Petition, he was aggrieved by Ext.P2 demand notice that sought to recover luxury tax as per the provisions of Section 5A of the Kerala Building Tax Act, 1975 for the assessment years from 2007-2008 to 2020-2021. The demand notice is dated 04.12.2019, and it was apparently the first demand notice served on the appellant demanding luxury tax. The challenge in the Writ Petition was essentially against the validity of Section 5A of the Kerala Building Tax Act, and the relief prayed for in the Writ Petition was for a declaration that Section 5A of the Kerala Building Tax Act was ultra vires, illegal unconstitutional and void.

3. The grounds in support of the reliefs prayed for in the Writ petition urged that since the 101^st amendment to the Constitution had amended Entry 62 of List II of the 7^th Schedule to the Constitution of India, by excluding the entry regarding taxes on luxuries, the State Legislature was denuded of the power to levy luxury tax thereafter, and hence there could not have been a levy or collection of luxury tax in terms of Section 5A of the Kerala Building Tax Act from the appellant. The appellant also sought to quash Ext.P2 demand notice that was issued to him, and for a further direction to the 3^rd respondent to refrain from recovering any amount by way of luxury tax under Section 5A of the Kerala Building Tax Act on the basis of Ext.P2 demand.

4. The learned Single Judge, who considered the matter found that merely because the 101^st amendment to the Constitution had amended Entry 62 of List II of the 7^th Schedule to the Constitution, it did not follow that the legislative competence to levy a tax of the nature envisaged under Section 5A of the Kerala Building Tax Act was taken away. He, therefore, proceeded to dismiss the Writ Petition as devoid of merit.

5. In the appeal before us, while Sri. Raju.K.Mathew the learned counsel for the appellant would reiterate the arguments made before the learned Single Judge, he would also point out, in the alternative, that the demand in Ext.P2 to the extent it pertains to the assessment years from 2007-2008 onwards is substantially hit by the provisions of limitation. Per contra, it is the submission of the learned Government Pleader that in the absence of any specific provision for limitation under the Kerala Building Tax Act, it was open to the State to recover all the past dues of luxury tax under Section 5A of the Kerala Building Tax Act from the appellant.

6. We have considered the rival submissions and find that the mere fact that Entry 62 of List II in the 7^th Schedule to the Constitution of India had been amended to take away the field of 'taxes on luxuries' from the ambit of legislative competence of the State Legislature, it did not necessarily follow that the levy of tax under Section 5A of the Kerala Building Tax Act was unconstitutional. As is trite, entries in the Lists under the 7^th Schedule to the Constitution are only fields of legislation and if a particular legislative provision can trace its validity to any of the other fields of legislation mentioned in List II, then the statutory provision concerned would satisfy the test of legislative competence. In the instant case, we find that Section 5A of the Kerala Building Tax Act is in essence a tax on residential buildings which have a plinth area above 278.7 sq.ms. It is on account of its nature as a tax on buildings that the provision finds mention under the Kerala Building Tax Act, 1975, and not elsewhere. Entry 49 of List II of the 7^th Schedule to the Co