Recreational areas and caretaker’s rooms in residential complexes cannot be assessed for property tax under commercial tariff as they are mandated by law for residential use.

JUDGMENT

The first petitioner is a builder and the second petitioner is the Apartment Owners Association. Petitioners have approached this Court challenging Exts.P3, P4, P6 and P9 and also seeking a declaration that the recreation area and caretaker’s room which is statutorily provided in a residential apartment complex cannot be assessed in commercial tariff for levy of Municipal property tax.

2. The 1^st petitioner constructed an apartment complex on their land having an extent of 30.41 ares comprised in Sy.Nos.274/16, 33, 14-2, 11-2-2, 11-3, 14-3 of Maradu Village, Kanayannur Taluk in the name and style “Abad Golden Oak” on the strength of Ext.P1 building permit obtained from the 1^st respondent Municipality on 31.03.2018. The 1^st petitioner completed the construction of the apartment complex as per the building permit which includes 52 apartments including a recreation block and a caretaker’s room. After completion of the construction, Ext.P2 occupancy certificate was issued and door numbers were assigned to different apartments including the recreational area and the caretaker’s room.

3. The 1^st respondent Municipality raised a demand for Municipal Property Tax in respect of the recreational block as well as the caretaker’s room in commercial tariff and issued Exts.P3 and P4 demands. The 1^st petitioner remitted property tax as against Exts.P3 and P4 for the 1^st and 2^nd half of 2019-20 under protest. Learned senior counsel appearing for the petitioners would contend that as per Rule 50 of the Kerala Municipality Building Rules, 1999 (hereinafter referred to as ‘KMBR, 1999’) the 1^st petitioner is bound to provide a recreation space of suitable size in a residential apartment having more than 12 dwelling units, and that the recreational space shall not be less than 6% of the total floor area of all the units taken together, and a minimum 35% of such recreational space shall be provided outside the building on the ground itself, and the remaining recreational space may be provided either inside a building or outside or both. The learned Senior Counsel also referred to Rules 4 and 5 of the Kerala Municipality (Property Tax, Service Cess and Surcharge) Rules, 2011 (hereinafter referred to as ‘Surcharge Rules, 2011’) and contended that going by Rule 5 it is clear that the residential apartments are to be levied property tax under the residential tariff alone, and there is no legal warrant to separate the recreation area and caretaker’s room to levy property tax under commercial tariff. It is further submitted that as mandated in Rule 50 of KMBR, 1999, the 1^st petitioner has provided a recreational block having 406.69 sq.mtrs adjacent to the apartment complex and a caretaker’s room on the ground floor, i.e. having an area of 18.68 sq.mtrs. 4. The 1^st petitioner challenged the said demand of assessing the property tax of the area in commercial tariff and sought review of the said demand by submitting Ext.P5 representation. The Finance Standing Committee of the 1^st respondent Municipality considered the said request and by Ext.P6 decided to confirm the levy of tax at commercial tariff in respect of the recreational block as well as the caretaker’s room. Thereupon, the 1^st petitioner filed Ext.P7 representation before the 4^th respondent Government, and Ext.P8 report was submitted by the 2^nd respondent Secretary of the Municipality before the 4^th respondent. On the basis of Ext.P8 report the 4^th respondent sustained the stand taken by the 1^st respondent Municipality and rejected the request of the 1^st petitioner as per Ext.P9 order.

5. Petitioners submit that the stand taken in the impugned orders is clearly against the statutory provisions contained in the KMBR Rules, 1999 and Surcharge Rules, 2011 in as much as the same is in violation of Section 233 of the Kerala Municipality Act , 1994 (hereinafter referred to as Act 1994), which is a charging provision to levy property tax on building, Rule 30 and Rule 50 of the KMBR Rules 1999. The