TaxTMI 
TaxTMI 
TaxTMI 
2015 (7) TMI 374
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.... the scheme is to levy luxury tax for each residential apartment, plinth area of which is in excess of the limit provided under Section 5A of the Act. It has been further ruled by the learned Single Judge that if the plinth area of each residential apartment was below 278.7 sq. mts., there was no scope of levying luxury tax. And if the concerned Tahsildar had found that the plinth area of the residential apartments in toto was above 278.7 sq. metres, the luxury tax for such apartments could be demanded, the writ petition was disposed of with the direction that Tahsildar would verify the plinth area of each residential apartment and levy luxury tax only for such of the residential apartment plinth area of which was in excess of the limit provided under Section 5A of the Act. The relevant part of the opinion expressed by the learned Single Judge is reproduced below:- "Even though petitioner is the owner of the entire building, luxury tax is leviable only if the plinth area of each residential apartment is in excess of the limit provided under Section 5A of the Kerala Building Tax Act. Tahsildar has demanded luxury tax by clubbing the plinth area of various residential apartments. Th....
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....nt of another building to calculate the plinth area would not arise." 4. The singular question that emanates for consideration is whether under the provisions of the Act, the revenue authorities are entitled to levy the demand of luxury tax from the respondent by clubbing the plinth area of the apartments which are 13 in number or the plinth area of the individual apartment should be taken into consideration for levy of the said impost. 5. Relying on Section 2(e) of the Act, it is contended by the learned counsel for the State that on a plain reading of Explanation II, it is vivid that a building consisting of different apartments or flats can be deemed to be a separate building, if two conditions, namely, that the apartments or flats are owned by different persons; and the cost of construction of the building has been met by all such owners jointly, are satisfied. The submission of the learned counsel for the appellants is that the ownership of all the 13 apartments rests with the respondent himself and the cost of construction having been singularly borne by him, the twin conditions enshrined under the Explanation II are not satisfied, and, therefore, it is impermissible to tr....
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....Emphasis supplied] 8. Section 2(k) of the Act, which defines the "plinth area", reads as follows:- "plinth area" means the area included in the floor of a building and where a building has more than one floor the aggregate area included in all the floors together: [Emphasis supplied] Provided that in case of a building referred to in the Explanation (2) to clause (e), the plinth area shall be calculated separately." 9. Section 2(l) of the Act that defines "residential building", is as follows:- "`residential building' means a building or any other structure or part thereof built exclusively for residential purpose including out-houses or garages appurtenant to the building for the more beneficial enjoyment of the main building but does not include hotels, boarding places, lodges and the like." 10. Section 5A stipulates charge of luxury tax. The said provision, being of significance, to deal with the controversy in hand, is reproduced below:- "5A. Charge of luxury tax.- (1) Notwithstanding anything contained in this Act, there shall be charged a luxury tax of two thousand rupees annually on all residential buildings having a plinth area of 278.7 square metres or more a....
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....t owners in a multi-storied building. 13. Having dealt with the concept of plinth area and its applicability in the backdrop of the provision, we are required to scan the definition of "building". As noted earlier, "building" has been defined in Section 2(e) of the Act to mean a house, out-house, garage or any other structure, or part thereof. The construction can be masonry, bricks, wood, metal or other material. It does not include portable shelter or sheds including a latrine which is not attached to the main structure. Explanation II is the fulcrum that would determine the question that has emanated for consideration in this case. The said Explanation lays the stipulation that when a building consists of different apartments or flats owned by different persons and cost of the building has to be met by all such persons, each apartment or flat is deemed to be a separate building. On a dissection of the said provision, it appears that said Explanation would apply when there is a building; that the building must consist of different flats or apartments; that each apartment or flat must be owned by different persons and cost of construction of the building must have been met jointl....
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....aggregate area included in all the floors are taken together. The proviso to the said definition lays down that in case of a building referred to in the Explanation II to clause (e), the "plinth area" shall be calculated separately. Thus, Section 2(k) has an insegragable nexus with the definition of "building". Explanation II to Section 2(e) which defines "residential building" only conveys about the building meant for residential purpose and what it includes. Section 5A is the charging Section and as has been stated earlier, it commences with a non-obstante clause. It determines the annual luxury tax on all residential buildings having a plinth area of 278.7 sq. mts. or more. It provides a date for completion that is 1 st April 1999. Though, it does not provide for aggregate it refers to residential building definition of which refers to a building. Section 2(k) defines "plinth area" of the building. Section 5A also includes "plinth area". Though the term "aggregate" is not mentioned but the words therein are buildings having plinth area and in that context one is required to scan and analyse the meaning of the term "building" and the "plinth area" as defined under Section 2(e) an....
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....st of construction of building are met by all such persons. The meeting of the cost jointly is not to be narrowly construed to mean that there has to be an investment before the commencement of the construction of the building. The persons who purchase afterwards they really share the value of the construction cost apart from the profit margin due to the builder or the seller. Unless such an interpretation is placed, the original owner of flats when he ceases to be the owner of the building or the purchaser of a small apartment less then 278.7 square meters would still be liable to pay luxury tax. Such an interpretation would lead to absurdity. 15. In our considered opinion, the principle of purposive interpretation of the provision has to be adopted and when such a construction is placed, it serves the legislative intent. To elaborate, a person may have a three-storied building and he owns it, then there has to be different computation as per the main part of Section 2(k) and for that it has to be calculated as is done by the revenue authority. Once he ceases to be the owner, he will not be liable to pay the luxury tax. But as long as he continues to be the owner, as per Section ....