JUDGMENT
1. Similar questions arise for consideration in these two writ petitions arising out of assessments made under the Kerala Building Tax Act, 1975 (the Act in brief), I shall therefore deal with them together. I shall first state the facts in O.P No. 7512 of 1992. Petitioner is the managing partner of a firm consisting of three partners. The firm put up a building consisting of sixteen shop rooms. It put up another building, separated from the first building in which a hotel is being run. The two buildings are separated from each other by what is termed by the petitioner as a road. Seventeen separate returns were filed for assessing the sixteen shop rooms in the first building, and the second building, as separate units of assessment under the Act. The second respondent assessing authority did not however accept the claim for making seventeen separate assessments. On the other hand, he clubbed together all the returns and completed a consolidated assessment of the shopping complex and the hotel building on a capital value of Rs. 6,53,400/- with a tax liability of Rs. 39,090/-. Copies of the order of assessment and of the notice of demand are Exts. P1 and P2 respectively. The assessment was challenged unsuccessfully in appeal before the third respondent, the Revenue Divisional Officer. A copy of his order is Ext. P3. The matter was taken up in revision before the fourth respondent District Collector, but he also did not find his way to accept the contentions of the petitioner and dismissed the revision petition by his order Ext. P4. This writ petition is filed challenging the orders Exts. P1, P3 and P4.
2. The facts in O.P No. 7744 of 1992 are similar. It is filed by a person who is a common partner of two firms, M/s. Vasantha Complex and M/s. Gayathri Complex. The two firms have a number of common partners, but it is unnecessary to refer to the constitution of those firms, as it is not relevant for the purposes of this case. Two separate buildings were constructed by the two firms in twenty two cents of land which belonged to two of the common partners. The funds for the construction were raised by the firms separately. The buildings are separated by a road having a width of five metres. The assessing authority, namely the second respondent, treated the two buildings as one unit, put up by one and the same assessable entity and assessed them in the name of the petitioner as the managing partner of the two firms, on a capital value of Rs. 28,45,800 with a tax liability of Rs. 2,58,330/-. True copies of the order of assessment and of the notice of demand are Exts. P1 and P2. Appeal and the revision filed therefrom met with dismissal by the orders Exts. P3 and P4. Petitioner filed this original petition challenging Exts. P1, P2, P3 and P4. The question which arises for consideration is whether the two buildings can be treated as one unit and assessed as such or whether they should be treated as two different units and assessed separately.
3. The main contention raised before me is that the two buildings in each of these cases, which are separated by a road, should have been assessed separately and not as one unit. There are certain other questions also raised by the petitioners, but I am not dealing with them in the view that I have taken on the point mentioned above. The only question which I am considering is whether the two separate buildings, separated by road, could be treated as one unit and assessed on a consolidated basis.
4. Even at the outset, I must mention of a very refreshing feature of both these cases, which redounds to the credit of the assessing authorities, that they have passed detailed orders of assessment, unlike other cases of assessment under the Act which contain nothing but the figures, the basis of or the materials for the assessment. Both of them have considered the points raised and reached their own conclusions stating the reasons therefor. I should express my appreciation of the way in which the assessing authorities have performed the duty assigned to them of completing an assessment under the Act, though I am not in agreement with them, on the point of law raised and argued before me, as mentioned earlier. But that does not detract from the pains they have taken to complete the assessments in the manner in which the law required them to do.
5. Now, to the merits of the cases. S. 5 is the charging section, and it levies tax in respect of every building the construction of which is completed on or after the 1st day of April, 1973 and the capital value of which exceeds Rs. 75,000/-. The charge is thus on the building, though necessarily it has got to be collected from a person, namely the owner of the building (S. 5(6)). Accordingly, S. 7 of the Act requires the owner of the building as defined in S. 2(i), to file return in the prescribed form for the purpose of assessment containing the prescribed particulars. Once the return is filed, the procedure for assessment laid down in S. 9 has to be followed and the assessment completed. Thereafter the demand for tax is made on the assessee, and a charge is created on the building under S. 19(2), for the amount of building tax due, and interest.
6. Building is defined in S. 2(e) as follows:
“(e) “building” means a house, out-house, garage, or any other structure, or part thereof, whether of masonry, bricks, wood, metal or other material but does not include any portable shelter or any shed constructed principally of mud, bamboos, leaves, grass or thatch or a latrine which is not attached to the main structure.”
7. There are two Explanations to this definition, the first of which relates to housing accommodation for workers residing in plantations provided pursuant to the Plantation Labour Act and buildings constructed under the Government of India subsidised housing scheme for industrial workers, in which each part of the building is treated as a separate building. The other Explanation relates to apartments and flats owned by different persons in a building, the cost of construction of which is borne by them jointly, in which case each of the apartments orr flats is deemed a separate building.
8. What is noteworthy in the above mentioned provisions is that the charge is on the building as such, and not with reference to its owner. The taxable event is the completion of construction of the building. There is no provision in the Act for clubbing together various buildings constructed by the same owner either in the same financial year or otherwise. A building as defined in S. 2(e) is an assessable entity by itself, liable to be assessed in respect of its capital value, as defined in S. 2(f) (now plinth area). A person may construct separate buildings in the same property or in different properties, but there is no provision for clubbing together these buildings which are otherwise separate. What is brought to assessment as a building is what is defined in S. 2(3) which, to put it shortly, means a building and its appurtenances like out-hosue, garage and such other structures which are attachments to it and form parts thereof though they may be physically or structurally separated from it. A building with all its necessary appurtenances is a single unit; but totally different units which otherwise have no connection with each other, either structurally or functionally are separate buildings. Two separate units may constitute one building, if they are built for the purpose of one or the other, and are functionally integrated. For example, a house with a garage, out-house for servants, latrines, cow-shed and so on forms an integral unit and has to be assessed as such. A hotel complex which may consist of numerous buildings like, cottages, kitchen complex, shopping arcade and so on or a factory complex with its appendages may constitute one unit for purposes of assessment. But when there is no such inherent connection between the buildings, when they do not exist for each other and are otherwise separate, there is no provision any where in the Act which requires such separate entities to be clubbed together into one or which deems them to be one building. Naturally so, because the tax payable under the Act is a one time payment, for which the taxable event is the completion of the construction of the building. Therefore, and even apart from anything else, it is impossible to club together different buildings into one for the purpose of assesment under this Act merely because they belong to the same owner.
9. The buildings with which we are concerned in this case are structurally separate buildings separated from each other by a road. The buildings concerned in O.P No. 7744 of 1992 belong to different firms, though they have same common partners. Each can exist without the other. It cannot be stated that they have been constructed with a view to provide necessary facilities for the occupants of the other building or to be complementary to each other. They can exist independently of the other. There is no reason why such different buildings should be treated as one taxable entity when the Act does not specifically provide for it. I am therefore of the view that the authorities have erred in clubbing together the separate buildings put up by the respective petitioners in the two cases, and in bringing them to one common assessment. The orders of assessment and the confirmation thereof in appeal and revision are liable to be quashed on this ground itself. There are various other contentions raised by the petitioners, but I am not going into those questions as the assessing authority has to deal with the matters afresh. I leave those questions open.
10. The original petitions are therefore allowed. Exts. P1, P2, P3 and P4 in each of these cases are quashed. It will however be open to the second respondent assessing authority to complete fresh assessments on the buildings concerned in each of these cases in accordance with law and in the light of the observations contained in this judgment. There will be no order as to costs.
11. Allowed.
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