Whether the covered terrace of residential buildings
constitute "plinth area" for building tax assessment.
The case of the
petitioners is that the truss work and structure constructed to cover the
terrace of the building, whether it be with asbestos, tile, metal or fibre
sheets, serve the purpose of protecting the building from heat and rain and by
giving roof to the terrace, the terrace does not become residential area to
assess it as part of plinth area
under
Section 5(5) read with Section 6 of the
Kerala Building Tax Act, 1975
(hereinafter called "the Act"). The
question whether covered terrace of concrete structure could be included as
part of the plinth area of residential buildings was referred to the Government
by the District Collector, Ernakulam at the request of very many building
owners and the Government vide Circular No.47999/2003 dated 5.12.2003 clarified
that there is no provision to exclude plinth area of such covered portion and
so much so, building has to be assessed by including the plinth area of covered
terrace. In fact, in many cases but for 2 the inclusion of plinth area of
covered terrace, the buildings would not attract luxury tax payable under
Section 5A of the Act as the plinth area excluding the covered terrace is below
the limit of 278.7 sq. metres attracting luxury tax. I heard counsel appearing
for the petitioners and Government Pleader appearing for the respondents and
Advocate Sri.George Thomas who assisted the court.
2. In support of their
contention petitioners have relied on the decision of this court in
SUBHASHCHANDRABABU V. STATE OF KERALA (2006 (2) KLT 189)
wherein this court held
that
The plinth area of garage or any other structure appurtenant to
residential building such as used for storage of firewood or other
non-residential purpose, should not be taken into account while assessing the
building for tax under the Act.
The Government Pleader on the other hand relied
on decision of this court in 2004 (1) KLT 1017 and contended that roof top
structure whether it is made with metal, fibre or tile, will constitute
"building" within the meaning of that term contained in Section 2(e)
of the Act.
According to him, roof top with truss work constructed above
terrace, whether it be with metal, wood, fibre or tile, is a structure and
being appurtenant to the building by virtue of Section 5(5), it's plinth area
should be added to the plinth area of the building.
3. In order to consider
the issue, this court has to necessarily consider the relevant charging
provisions contained in the statute and for easy reference,
Section 5(1),
Section 5(5) and Section 6 are extracted hereunder:
"S.5 Charge of building
tax:-
(1) Subject to the other provisions contained in this Act, there shall be
charged a tax (hereinafter referred to as "building tax") based the
plinth area at the rate specified in the Schedule on every building the
construction of which is completed on or after the appointed day. ..........
(5) Where there are out-houses, garages or other structures appurtenant to the
building for the more convenient enjoyment of the building, the plinth area of
such structure shall be added on the plinth area of the main building and the
building tax assessed accordingly. Provided that the plinth area of a garage or
any other erection or structure appurtenant to a residential building used for
the purpose of storage of firewood or for any non-residential purpose shall not
be added on the plinth area of the building.
...........
S.6. Determination of
plinth area:-
The plinth area of a building for the purposes of this Act, shall
be the plinth area of the building as specified in the plan approved by the
local authority or such other authorities as may be specified by Government in
this behalf and verified by the assessing authority in such manner as may be
prescribed.
Provided that the plinth area of a garage or any other erection or
structure appurtenant to a residential building used for storage of firewood or
for any non-residential purpose shall 4 not be taken into account for
determining the plinth area of that building."
There is no doubt that the
structure constructed above roof top or terrace of the building is a structure
in itself answering the definition of "building" and it's plinth area
constitute part of plinth area of the main building. However, the question to
be considered is whether the roof top cover given to the building makes the terrace
beneath it also plinth area of the building and if so, whether such plinth area
has to be reckoned for the purpose of assessment of building tax for the
residential building under Section 5(5) read with Section 6 of the Act. After
providing for inclusion of plinth area of outhouses, garages or structures
appurtenant to the building for the more convenient enjoyment of the building
along with the main structure, the proviso to Section 5(5) states that the
plinth area of a garage or any other structure or erection appurtenant to the
residential building used for the purpose of storage of firewood or for any
non-residential purpose, will not be added to the plinth area of the main
building. Section 6 defines plinth area with reference to the provisions of the
Building Rules which also do not require any permission to give protective
cover to terrace which is not enclosed. Further, the same proviso to Section
5(5) is given to Section 6 which provides for determination of plinth area of a
building. What is clear from above provisions is that the entire plinth area
of appurtenant structures should not be added to the plinth area of the
residential building for assessment.
Only the plinth area of such of the
appurtenant or other structures which are used for "residential purpose"
only can be added to the plinth area of the residential building.
Therefore,
the question to be considered is whether the terrace over the roof top when
covered with roof becomes residential area. In fact, cover is given even to
buildings with slanting roof, with the result it serves only as a protection to
the building and there is no terrace that could be used. However, when roof is
given to flat terrace building, the covered terrace portion becomes plinth area
of the building. The essence of a residential building is privacy which
requires enclosure, whether it be with brick, grill or shutters. In other
words, an open area with roof cannot be treated as part of the residential
building as it is unfit for residential purpose.
Even though the terrace
covered with roof may be used for several purposes such as drying of clothes,
for recreational purposes, etc., such use cannot be treated as use for
residential purpose.
Therefore, open terrace even after giving roof to it does
not become part of plinth area used for residential purpose. The main purpose
of such a structure is to protect the building from heat and rain. Of late lot
of people are giving cover to their building to harvest rain water which is
stored either on the top of the building or downstairs in tanks or by
allowing such collected water to percolate in pits which increases availability
of water in the well. A roof cover prevents absorption of heat by the building
and therefore, unnecessary air conditioning is avoided. Similarly when the
building is protected from heat and rain, maintenance cost is reduced and it's
life is also extended. In fact, concrete buildings absorbing heat in the day
time and radiating the heat to the atmosphere in the night causes increase in
atmosphere temperature even in the night causing discomfort not only to the
occupants but to the neighbours. In fact, on account of the increased shortage
of drinking water, the Government has issued Circular and in the case of some
buildings, provision for collection of rain water is made mandatory. A roof
cover on top of the terrace, whether it be made of metal, fibre, or tile, makes
collection of clean rain water easy. Therefore, in public interest,
construction of roof cover over concrete buildings is something which should be
encouraged by providing all incentives by the Government. However, I make it
clear that if such terrace in full or part is enclosed with bricks, walls,
grills, wood or the like, such enclosed area will become part of the
residential area of the building for the purpose of assessment of building tax
and luxury tax under the Act.
The Government Circular referred above giving
contrary interpretation is declared invalid. The W.P(C)s. are allowed
directing the Tahsildar to exclude the plinth area of unenclosed terrace,
whether it be covered by roof or not. Since dispute is raised with regard to
other plinth area also in some cases, there will be direction to the Tahsildar
to inspect the building, measure the plinth area and exclude the covered roof
top which does not have walls or enclosures with grills or the like and make
fresh assessment. The excess tax, if any, collected should be refunded without
any delay.
In order to avoid unnecessary litigation, there will be direction to
the Government to issue fresh Circular in terms of this judgment for guidance
to the statutory Authorities.
