Municipalities cannot demand property tax exceeding three years prior to the date of demand, as per statutory limitations.

JUDGMENT

This writ petition is submitted by the petitioner challenging Exts.P11 and P12 demand notices, issued by the 2^nd respondent-Municipality, requiring the petitioner to pay property tax in respect of the building owned by the petitioner, pertaining to the period from 2016-2017 to 2024- 2025. Apart from the discrepancies in the rate of tax, the petitioner has also raised a contention that, the demand is hit by the limitation contemplated under section 539 of the Municipality Act , which provides that, the Municipality cannot recover the tax beyond a period of three years preceding to the date of demand.

2. When the matter came up for consideration earlier, this Court passed interim orders on 05.06.2025 and 09.10.2025, in which the petitioner was permitted to pay the amounts at pre-revised rates up to 2024-2025 and also holding that the petitioner shall be liable to pay tax at the pre-revised rate from 2025-2026 onwards. The petitioner had complied with the said conditions. However, now, the petitioner’s grievance is with regard to the rate of tax now fixed for the current assessment year. As against the same, the petitioner has already submitted Ext.P25 representation before the Municipality, which is now pending consideration.

3. After hearing the learned counsel for the petitioner and the learned Standing Counsel for the 2^nd respondent-Municipality, I am of the view that this writ petition can be disposed of. This is particularly because, as far as the question of limitation is concerned, the same is already decided by this Court in Gateway Hotels, Ekm v. Kochi Municipal Corporation [ 2025 (3) KHC 245 ] wherein it is categorically held that, the Municipality cannot demand property tax beyond the period of three years preceding to the date of demand. In the light of the above, Exts.P10 to P12 have to be quashed except for the demand for three years preceding to the date of the said notices, and it is ordered accordingly.

4. However, now a fresh demand has been issued to the petitioner confining the period of assessment to three years and, as the petitioner has some grievance with regard to the current assessment year, the petitioner has already filed Ext.P25 representation. It is also reported that the petitioner has already paid the property tax except for the current assessment year. In Ext.P25, the petitioner raised certain discrepancies in the matter of assessment of the tax.

In such circumstances, while quashing Exts.P10 to P12 to the extent referred to above, it is further directed that the 2^nd respondent shall consider Ext.P25 representation and pass appropriate orders in accordance with law, after giving the petitioner an opportunity of being heard. Such a decision shall be taken by the 2^nd respondent, within a period of one month from the date of receipt of a copy of this judgment.

Sd/-