Luxury tax on independent apartments must be assessed separately, not by aggregating plinth area of the entire building.

Luxury tax under Section 5A of the Kerala Building Tax Act is attracted by reference to the plinth area of the relevant residential unit, and not by mechanically aggregating separate independent apartments within one structure. The statutory definition of plinth area and its proviso were read as having a restricted application to buildings with distinct flats or apartments. Where the apartments are functionally independent and separately usable, each apartment must be considered on its own for the charging provision, and the assessment based on total combined area cannot be sustained.

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Issues: Whether luxury tax under Section 5A of the Kerala Building Tax Act is leviable on the basis of the plinth area of the entire building containing multiple independent apartments, or on the basis of each separate apartment.

Analysis: Section 5A levies annual luxury tax on residential buildings having a plinth area of 278.7 square metres or more. Section 2(k) defines plinth area as the area included in the floor of a building and, where there is more than one floor, the aggregate area of all floors. The proviso to Section 2(k) refers to the special class of buildings covered by Explanation (2) to clause (e) of Section 2. The provision was read as indicating a restricted application to buildings consisting of different apartments or flats, and not as requiring the entire set of apartments to be treated as one unit in every case. Where apartments are independent and functionally separable, the plinth area of each apartment is to be considered separately for the purpose of the charging section.

Conclusion: Luxury tax is not to be levied by aggregating the area of separate independent apartments merely because they form part of one larger structure; the assessee's interpretation was accepted.

Final Conclusion: The appeal failed, and the assessment could not be sustained on the basis adopted by the taxing authority.

Ratio Decidendi: For levy of luxury tax on residential buildings with multiple independent apartments, the charging provision must be applied by treating each separable apartment as a distinct unit where the statutory definition and proviso do not require aggregation of their plinth area.

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