Taxing authority must adhere to statutory procedures and notification requirements to sustain any demand of tax.

JUDGMENT

[WP(C) Nos.38108/2023, 11753/2023]

These two writ petitions have been instituted seeking to challenge the demand of property tax under the provisions of the Kerala Municipality Act , 1994 (hereinafter referred to as ‘Act’), read with the provisions of the Kerala Panchayat Raj (Property Tax, Service Cess and Surcharge)

Rules, 2011 (hereinafter referred to as ‘Rules’).

2. Heard Sri. N. Rajesh, learned counsel for the petitioners, as well as Smt. Aswini representing respondent Nos. 2 and 3.

3. The petitioner in W.P.(C) No.38108 of 2023 has been served with a demand notice at Ext.P7 seeking the demand of tax for the period from 2013–14 to 2023–24.

4. The petitioner in W.P.(C) No. 11753 of 2023 has been served with Exts.P11 to P32 demand notices covering the period from 2012–13 to 2022–23.

5. According to Sri. N. Rajesh, the demand as above is illegal and arbitrary and requires to be set aside for more than one reason. Firstly, he would point out, with reference to the provisions of Section 539 of the Act, that the proceedings have been taken beyond the period of three years prescribed thereunder. The demand, at least for the period up to 2020–21 in W.P.(C) No. 38108 of 2023 and 2019–20 in W.P.(C) No. 11753 of 2023, requires to be set aside as barred by limitation. He would further contend that the entire demand of property tax was made without following the mandate under Rules 4 to 14 of the Rules.

6. I have considered the rival contentions as well as the connected records. A perusal of the demand notices referred to above would show that they have been issued in total violation of the mandate as regards the fixation of property tax as prescribed under the relevant provisions of the Rules.

7. The petitioners have specifically contended and which I find to be justified also, that the Municipality has not properly notified the tax rates or called for objections in that regard. Though such a contention has been specifically raised in these writ petitions, in the counter affidavits filed, the afore contentions have not been specifically answered.

When that be so, I am of the opinion that the demand of property tax without following the mandate under the Rules cannot be sustained.

8. In arriving at this conclusion, this Court notices the judgment of the Division Bench of this Court in Thrissur Corporation v. Sangeetha Hotels [ 2025 (4) KLT 274 ] wherein, on an almost similar set of facts and also taking note of the Rules, it has been held as under:

“13. The chronology of events aforementioned would clearly indicate that in January, 2013, when the appellant Corporation passed a resolution finalizing the rates, the procedure for publication of these rates as mandated under Rule 4(4) was not strictly adhered to. This effectively meant that the property owners within the territorial limits of the appellant Corporation were not aware of the final rates of property tax fixed in relation to their property. The mandate of Article 265 read with Article 243-X of the Constitution is clearly that there can be no levy or collection of property tax except by authority of law. The subject matter of levy being a tax, the rate at which such tax would be imposed had to be made known to assessees well before the assessment in respect of their properties was completed. A breach of the publication requirement under the Rules effectively rendered the statutory exercise of fixing the rate of tax entrusted to the appellant Corporation, incomplete. The consequence that ensued was that there had been no effective finalization of the rates of property tax by the appellant Corporation despite their taking a decision to finalize the rates.”

9. To the same e