Levy of Luxury Tax on Residential under Kerala Building Tax Act

SC rules on levy of luxury tax on residential apartments, states that a person being an owner of “plinth area” of more than 278.7 sq. mts. in one building, would be liable to tax u/s 5A of Kerala Building Tax Act even if it consists of separate or distinct apartments; Adopts purposive interpretation principle for definitions of “building”, “plinth area” and “residential building” falling u/s 2(e), 2(k) and 2(l) respectively, observes that only where each apartment or flat is owned by different persons and cost of building construction has been met jointly, plinth area cannot be clubbed in terms of Explanation II to Sec 2(e); Rejects Revenue contention that there shall be separate computation only if there is initial booking and persons have contributed for construction, observes that said Explanation has to be read harmoniously with proviso to Sec 2(k) and Sec 5A, and joint sharing of costs by owners cannot be construed narrowly to mean that there must be investment before construction commences, states that persons who purchase afterwards also share value of construction cost apart from builder’s / seller’s profit; Further states that Sec 2(k) i.e. “plinth area” has an insegregable nexus with the definition of “building” and it makes no difference whether residential building consists of one floor or is multi-storied or consists of multiple flats / apartments, entire plinth area in residential building owned by a singular owner is required to be aggregated; Also rejects functional unit test applied by Division Bench of HC in writ appeal, and remands matter to Competent Statutory Authority to compute tax as per manner prescribed  : SC