Luxury tax on aggregate plinth area upheld for a single-owner apartment building under Kerala building tax law.

Luxury tax under Section 5A of the Kerala Building Tax Act, 1975 applies on the aggregate plinth area of a multi-storeyed residential building where it remains under a single owner, because Section 2(k) contemplates aggregation for buildings with more than one floor and separate apartment-wise calculation is confined to cases falling within Explanation II to Section 2(e). Explanation II was treated as a beneficial provision for flats or apartments owned by different persons and jointly financed, and the court rejected a narrow reading that would produce an anomalous result. The expressions in Sections 2(e), 2(k), 2(l) and 5A were read harmoniously and purposively, and the apartment-wise functional unit approach was rejected. The revenue authority was directed to recompute the levy accordingly.

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Issues: Whether luxury tax under Section 5A of the Kerala Building Tax Act, 1975 can be levied by clubbing the plinth area of separate residential apartments in a multi-storeyed building owned by a single owner, and whether Explanation II to Section 2(e) requires apartment-wise calculation only in the circumstances stated therein.

Analysis: Section 5A, being a charging provision with a non-obstante clause, governs the levy of luxury tax on residential buildings having a plinth area of 278.7 sq. metres or more. The definition of "plinth area" in Section 2(k) contemplates aggregation where a building has more than one floor, while the proviso requires separate calculation only where the case falls within Explanation II to Section 2(e). Explanation II is a beneficial provision intended to deal with buildings consisting of flats or apartments owned by different persons and jointly met by the cost of construction. It was held that this provision should not be read narrowly so as to create an absurd result by making a former owner liable on the basis of prior construction funding arrangements. The expressions in Sections 2(e), 2(k), 2(l) and 5A must be read harmoniously and purposively, and the apartment-wise functional unit approach adopted by the courts below was rejected.

Conclusion: Luxury tax is leviable on the aggregate plinth area where the building remains under a single owner, and clubbing of the apartments was permissible on the facts. The matter was remitted to the revenue authority for recomputation in accordance with the Court's clarification.

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