The court established that tax recovery demands beyond three years from issue are invalid under Section 539 of the Kerala Municipality Act.

JUDGMENT

Dated this the 11^th day of February, 2026 The writ petition is filed by one of the partners of the hotel run in the name and style of M/s.Ajantha Regency at Pallimukku, Kochi, engaged in providing hotel and lodging facilities. For the said purpose, the petitioner uses the building bearing Nos.39/5022(1), 39/5022(2) and 39/5022(3), assigned by the Municipal Corporation.

2. The grievance raised in the writ petition is against Exts.P1, P2, P3 and P7 demand notices issued by the Corporation, whereby property tax as well as provisional tax for the financial year 2011–12 was demanded in the year 2017. However, Ext.P7 pertains to the financial year 2016–17 and was issued on 06.01.2017.

3. The primary contention of the petitioner is that the demands under Exts.P1, P2, P3 and P7 are in violation of Section 539 of the Kerala Municipality Act , 1994, as the recovery is sought beyond the period of three years prescribed therein. In this regard, the learned counsel for the petitioner relied upon the decision in Gateway Hotels, Ernakulam v. Kochi Municipal Corporation [2025 (3) KHC 245] , wherein it was held that “the recovery under impugned demand notices cannot be initiated for arrears beyond three years from the date of demand. As the period of limitation is only a measure of restriction on recovering amounts due, all those owners who have paid the tax voluntarily or otherwise are not entitled for the refund of the same. However in respect of those persons who have not yet paid the amount they need to pay only the arrears from a period that accrued three years prior to the demand notices was issued to them”. Reliance is also placed on the decision in Excelsior English Medium Higher Secondary School v. Secretary, Kottayam Municipality and Others [2021 (2) KHC 475] , wherein this Court held that recovery of service tax is governed by and that the Municipality is not entitled to proceed against the assessee for a period exceeding three years.

4. In the light of the aforesaid decisions and on examining the impugned demands, it is evident that Exts.P1, P2 and P3 were issued in the year 2017 demanding property tax for the financial year 2011–12, which is clearly beyond the period of three years. Hence, the said demands are liable to be interfered with and are set aside.

5. As regards Ext.P7, the demand dated 06.01.2017 relates to the provisional tax for the financial year 2016–17, which is well within the statutory period of limitation and therefore does not warrant interference.

Accordingly, the writ petition is disposed of by setting aside Exts.P1 to P3 to the extent that they demand property tax for the period prior to three years. However, the Corporation is at liberty to take appropriate measures in accordance with law to recover the amount demanded as per Ext.P7 as well as the amount which is liable to be collected from the petitioner as per Section 539 of the Act, that is within three years from the demand.

Sd/-