STATE OF KERALA & ORS.versusA. P. MAMMIKUTIY

                        [2015] 7 S.C.R. 764


A                  STATE OF KERALA & ORS.
                                 v.
                        A. P. MAMMIKUTIY
                  (Civil Appeal No. 1640 of 2015)
B
                          JULY01, 2015
         [DIPAK MISRA AND PRAFULLA C. PANT, JJ.]
           Kera/a Building Tax Act, 1975 - ss.2(e) Explanation
c II, 2(k) and 5A - Imposition of 'luxury tax' - On a residential
  buildings, consisting of 13 residential apartments- Whether
  Revenue entitled to levy tax, by clubbing the plinth area of
  the 13 apartments, or plinth area of individual apartment
  should have been taken into consideration - Held: Each
D residential building owned by single owner could be subjected
  to luxury tax, if it has plinth area which exceeds 278. 7 sq.
  mts. - However, Explanation to s.2(e) has to be read
  harmoniously with proviso to s.2(k) and s.5A - Purposive
  interpretation has to be given to Explanation II to s.2(e) -
E Thus, when the owner parts with the apartments ofthe building,
  each apartment will be segregable for the purpose of luxury
  tax - Taxation - Luxury tax.

          Words and Phrases: 'Building', 'Residential Building'
F and 'Plinth Area'-Meaning of, in the context of Kera/a Building
  Tax Act, 1975.

          Allowing the appeal, the Court

         HELD: 1. Explanation II to s.2(e) of Kerala Building
G Tax Act, 1975, 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
H have been met jointJy, and in such cases plinth area
                                764
    STATE OF KERALA & ORS. v. A. P. MAMMIKUTTY            765


cannot be clubbed. Thus, Explanation II to Section 2(e) A
takes care of a situation where the building is
constructed and there are different owners who have
paid the purchase price for their respective apartments.
The Explanation should not be read as a negative
provision, detrimental and fatal to cases where there are B
separate owners of the apartments, for that is not the
basic object and purpose behind the Explanation II to
Section 2(e) of the Act. It is a benevolent and beneficial
provision which has not been enacted to curtail and
nullify what is logical and apparent to reason. [Para 13] C
[774-F-H; 775-A-B]

       2.. The expression "residential building" cannot
be interpreted without reference to the term "building"
and Explanation II to Section 2(e) of the Act. Therefore, D
each residential building owned by single owner would·
be subjected to luxury tax, if it has the plinth area which
exceeds 278.7 sq.mts. Jt makes no difference whether
the residential building consists of one floor or it is two-
storied or three-storied or consists of multiple flats or E
apartments. The entire plinth area in the residential
building owned by a singular owner is required to be
aggregated. Section SA does not refer to aggregate plinth
area of all the floors. The intention of the legislature is F
apparent that if a person is the owner of the plinth area
of 278.7 sq.mts or more in one building, even if it consists
of separate or distinct apartments, he would be liable to
pay the luxury tax under Section SA of the Act. Section
2(k) clearly postulates that "plinth area" means the area G
included in the floor of the building and where building
has more than one floor 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 H
766         SUPREME COURT REPORTS                [2015] 7 S.C.R.


A be calculated separately. Thus, Section 2(k) has an
  insegragable nexus with the definition of "building".
  [Para 14] [775-D-H; 776-A-B]

              3. The definitions have to be given a proper
B     construction. The Explanation II to Section 2(e) has to
      be read harmoniously with proviso to Section 2(k) and
      Section 5A of the Act. The intention of the legislature is
      that ownership of different flats and the cost of
      construction of building are met by all such persons.
C     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
D     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
E     interpretation would lead to absurdity. The principle of
      purposive interpretation of the provision has to be
      adopted and when such a construction is placed, it
      serves the legislative intent [Paras 14, 15] [777-E-H; 778-
F A]
        State ofT.N. v. Kodail<anal Motor Union (P) Ltd. (1989)
        3 sec 91; K.P Varghese v. /TO (1981) 4 sec 112:
        1981 SCC (Tax) 293; Luke v. /RC (1964) 54 ITR 692:
        1963 AC 557 (HL); Keshavji Ravji and Co. v. CIT 1990
G       (1) SCR 243: (1990) 2 SCC 231 - relied on.

  4. Purposive interpretation has been given to
  Explanation II to s.2(e), as it has to be read with Section
  SA of the Act. When the owner parts wtth the building
H each apartment will be segregable for the purpose of
     STATE OF KERALA & ORS. v. A. P. MAMMIKUTIY                  767


  luxury tax. If he remains the owner for the whole or part, A
  then he will be liable to pay for the plinth area in respect
  of the flats or apartments that is retained by him subject
  to the cap as envisaged under Section SA of the Act. If
· he sells away the entire building, then it has to be flat/
  apartment-wise calculation/computation, for every B
  apartment owner is different than the others. Thus, the
  plinth area would be different. The matter is remanded
  to revenue authority to compute the luxury tax in the
  manner which has been clarified by the judgment. [Paras C
  17and18] [779-0-F, G]

                   Case Law Reference
   (1989) 3 sec 91              Relied on            Para 15
   (1981) 4 sec 112             Relied on            Para 15      D
   (1964) 54 ITR 692            Relied on            Para 15
   1990 (1) SCR 243             Relied on            Para 16
      CIVILAPPELLATE JURISDICTION: Civil Appeal No. E
 1640of2015                   ·

       From the Judgment and Order dated 06.11.2013 in WA
 No. 2150/2008 of the High Court of Kerala at Emakulam.
       M. F. Philip, Liz Mathew for the Appellant.                F

      M. Gireesh Kumar, Ankur S. Kulkarni, Sriram P. for the
 Respondent.

       The Judgment of the Court was delivered by
                                                                 G
        DIPAK MISRA, J. 1. The respondent invoked the
jurisdiction of the High Court of Kerala at Emakulam under
Article 226 of the Constitution assailing the demand of luxury
tax imposed on a building that consists of 13 residential
                                                                 H
768         SUPREME COURT REPORTS                     [2015] 7 S.C.R.


A apartments. The Tahasildar who is the competent statutory
  authority under the Kerala Building Tax Act, 197S (for brevity
  "the Act") imposed luxury tax on the building on the base of
  Section SA of the Act vide order dated 1.10.2003 in Ref B4-
  6435/03 whereby he had measured the plinth area of all the
B residential apartments and computed the tax treating the same
  as a singular building.

              2. The learned Single Judge opined that the levy of luxury
      tax of the entire building on the owner was not permissible
C     under the Act, for the scheme is to levy luxury tax for each
      residential apartment, plinth area of which is in excess of the
      limit provided under Section SA 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
D     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
E     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 SA of the Act. The relevant part
      of the opinion expressed by the learned Single Judge is
F     reprodu~d 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 SA of the Kerala Building Tax Act. Tahsildar
G         has demanded luxury tax by clubbing the plinth area of
          various residential apartments. This is not permissible
        · under the Act and the scheme is to levy luxury tax for each
          residential apartment, plinth area of which is in excess
          of the limit provided under Section SA of the Act. If plinth
H
    STATE OF KERALA& ORS. v. A. P. MAMMIKUTTY                     769
                [DIPAK MISRA, J.]

  area of each residential apartment is below 278.7 sq.            A
  meters then there is no scope for levying luxury tax.
  However, if Tahsildar on inspection finds that the plinth
  area of any residential apartment is above 278.7 sq.
  metres, then he can demand luxury tax for such of the
  apartment or apartments."                                        B

        3. Being aggrieved by the aforesaid judgment and order
passed by the learned Single Judge dated 12.06.2008 the
State of Kerala and its functionaries preferred writ appeal No.
2150 of2008. The Division Bencl1 referred to Section SA of C
the Act, dictionary clause contained in Section 2, especially,
Section 2 (k) and the Explanation II to Clause (e) of Section 2
and came to hold that if there is one building having more than
one floor and they are inter-connected with each other and if
one floor is of no use without the existence of another floor, D
then it has to be considered as one building. The Division
Bench further proceeded to state that as there were 13
independent flats or apartments and each of the building could
be used on its own without reference to the other apartment,
the question of taking the measurement of another building to E
calculate the plinth area would not arise. The conclusion
recorded by the Division Bench reads as follows:-

  "For the purpose of calculating the plinth area, if the
  intention of the legislature was to adopt the entire             F
  Explanation (2) to clause (e) even with reference to
  proviso to 2(k) there was no need to mention the
  aggregate area where a building has more than one floor.
  The very reference to more than one floor of a building
  would explicitly mean, if read along with the proviso that      G
  whether the building is a single unit so far as functional
  use is concerned, or separate units, so far as functional
  utility of the building. If there is one building having more
  than one floor and they are interconnected with each
                                                                  H
770        SUPREME COURT REPORTS                    [2015] 7 S.C.R.


A      other, in other words, if one floor is of no use without the
       existence of another floor, then it has to be considered
       as one building. Therefore, if there are 13 independent
       flats or apartments and if each of the building could be
       used on its own without reference to the other apartment,
B      the question of taking the measurement 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
C 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.
D
           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,
E 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
F himself ~nd 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 treat the individual apartments of the building
  as different buildings. Learned counsel would emphasise that
G the situation envisaged under Explanation II to Section 2(e)
  would arise in a situation where the apartments are pre-
  booked by the buyers and whole consideration is paid in
  advance to the builder thereby satisfying the condition of
H separate ownership and joint meeting of costs. Reliance has
     STATE OF KERALA & ORS. v. A. P. MAMMIKUTTY                         771
                 [DIPAK MISRA, J.]

been placed on Section 5A of the Act and other definitions A
under Section 2 and on that basis, it is urged that the plinth
area as prescribed is far excess of the same inasmuch as the
residential portion of the building is 590.4 sq.mts.

        6. The submission of the learned counsel for the                 B
respondent is that the Explanation II to Section 2(e) has no
application for the levy of luxury tax, for it is only applicable for
the purpose of levy of building tax. It is argued by him that levy
of luxury tax is only for a residentia, building and t~e reference
to building in Explanation II in Section 2(e) does not apply to a        C
residential building. Learned counsel has draw·n distinction
between "residential building" and a "building" by drawing our
attention to Section 2(1) of the Act. It is propounde'd by him that
none of the 13 apartments individually have the pl~nth'area of
more than 278.7 sq. mt$. and hence, the proviso to Section               D
5A of the Act is not applicable to the present)-Case. It is
contended that demand has to be made for the residential
apartments and not for the owner who is holding the whole
unit. Elaborating the said stand, it is submitted that there
cannot be clubbing of the residential apartments together for            E
the purpose of imposition of luxury tax.

        7. To appreciate the rival submissions, it is necessary
to extract the relevant part of Section 2(e), which defines
"building". It is as under:-                                    F

  " "Building" means a house, out-house, garage or any
  other structure, or part thereof, whether of masonry, bricks,
  wood, metal or other material but does not include any
  portable shelter or any shed constructed principally of                G
  mud, bamboos, leaves, grass, thatch or a latrine which
  is not attached to the main structure.

  [...]
                                                                         H
772         SUPREME COURT REPORTS                      [2015] 7 S.C.R.


A       Explanation II: Where a building consists of different
        agartments or flats owned by different gersons and the
        cost of construction of the building was met by all such            )



        12ersons jointly, each such a12artment or flat shall be
        deemed to be a segarate building."
B
                                               [Emphasis supplied]

             8. Section 2(k) of the Act, which defines the "plinth area",
      reads as follows:-

c       "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]
D
        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(1) of the Act that defines "residential
E 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
 F      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 SA stipulates charge of luxury tax. The said
G provision, being of significance, to deal with the controversy in
  hand, is reproduced below:-
         "SA Charge of luxury tax. - (1) Notwithstanding anything
        contained in this Act, there shall be charged a luxury tax
 H      of two thousand rupees annually on all residential
    STATE OF KERALA & ORS. v. A. P. MAMMIKUTIY                        773
                [DIPAK MISRA, J.]

   buildings having a plinth area of 278. 7 square metres or ·         A
   more and completed on or after the 151 dayof April, 1999.

         11. As is evident, the aforesaid provision commences
with a non-obstante clause, and, therefore, has to be given
primacy over the other provisions of the Act. It clearly provides      B
that luxury tax of Rs.2,000/- is payable by the owners of all
residential buildings constructed on or after 1.4.1999 having
plinth area of278.7 sq.mts. ormNe. In the instant case, there
is no cavil over the fact that the building in question consists of
three storeys and has 13 apartments/ flats. There is no dispute        C
over the fact thatthe aggregate area is more than 278.7 sq.mts.
The controversy that has emerged is what is meant by the term
"residential building" and whether each of the 13 apartments
constitute a separate building or is a singular building for the
purpose of levy of luxury tax. There is no quarrel over the fact       D
and it is also manifest that each of the residential apartments
has the plinth area of less than 278.7 sq.mts., but when the
entire plinth area of 13 apartments is taken by applying the
method of clubbing or when the plinth area is aggregated, it
exceeds 278.7 sq.mts. It is the admitted position that the             E
building has been constructed after 1.4.1999, that is, the date
provided in Section SA vf the Act.

         12. Section 2(k) of the Act defines the term "plinth area"
and Section 2(1) of the Act defines the term "residential F
building". We have already quoted the aforesaid provisions.
As we notice, the term "plinth area" means the area included
in the floor of a building and where a building consists of more
than one floor, aggregate area of all the floors and hence, the
plinth area can include the entire construction, that is, the floor G
area of a multi-storied building. The question would still arise
whether different apartments owned by separate persons can
be clubped and aggregated in a multi-storied building. The
proviso thereto states that the plinth area of an entire building H
774         SUPREME COURT REPORTS                     [2015] 7 S.C.R.


A can be separated. It is postulated therein that in case of a
  building when Explanation II to Section 2(e) is attracted, the
  plinth area should be calculated separately. The issue which
  requires examination and apposite answer is whether the
  Explanation II to Section 2 (e) as an ameliorative and beneficial
B provision, restricts and debars calculation and computations
  of plinth area of each independent apartment by different
  owners in a multi-storied building.

               13, Having dealt with the concept of plinth area and its
C     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 theActto mean a house,
      out-house, garage or any other structure, or part thereof. The
      construction can be masonry, bricks, wood, metal or other
D     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
E     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 dis~ection of
      the said provision, it appears that said Explanation would apply
F     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 niust have been met jointly, and in such cases plinth
      area cannot be clubbed. Learned counsel for the appellant-
G     State has submitted that as there has been no contribution of
      funds at the time of construction. The Explanation II to Section
      2(e) would not be applicable and the respondent has to be
      treated as the sole owner. As we perceive, Explanation II to
      Section 2(e) takes care of a situation where the building is
H     constructed and there are different owners who have paid the
     STATE OF KERALA& ORS. v. A. P. MAMMIKUTIY                         775
                 [DIPAK MISRA, J.]

purchase price for their respective apartments.. The A
Explanation should not be read as a negative provision,
detrimental and fatal to cases where there are separate owners
of the apartments, for that is not the basic object and purpose
behind the Explanation II to Section 2(e) of the Act. It is a
benevolent and beneficial provision which has not been B
enacted to curtail and nullify what is logical and apparent to
reason.

        14·. In this context, it is imperative to analyse what is
 meant by "residential building" .. The definition in clause 2(1),      C
 means a building or any other structure or part thereof used
for residential purpose and house or out-house or garage
 appurtenant to a building for more beneficial enjoyment. It
excludes hotels, boarding places, lodges and the like. Thus,
the expression "residential building" cannot be interpreted             D
without reference to the term "building" and Explanation II to
 Section 2(e) of the Act. Therefore, each residential building
owned by single owner would be subjected to luxury tax, if it
has the plinth area which exceeds 278.7 sq.mts. It makes no
difference i,yhether the residential building consists of one floor     E
or it is two-storied or three-storied or consists of multiple flats
or apartments. The entire plinth area in the residential building
owned by a singular owner is required to be aggregated. It is
noticeable that Section 5A does not refer to aggregate plinth           F
area of all the floors. The intention of the legislature is apparent
that if a person is the owner of the plinth area of278.7 sq.mts
or more in one building, even if it consists of separate or
distinct apartments, he would be liable to pay the luxury tax
under Section 5A of the Act. It also becomes further clear when        G
the definition of "plinth area" in Section 2 (k) is properly
appreciated. It clearly postulates that "plinth area" means the
area included in the floor of the building and where building
has more than one floor aggregate area included in all the
floors are taken together. The proviso to the said definition          H
776        SUPREME COURT REPORTS                    [2015] 7 S.C.R.


A 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
B 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
C that is 151 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
0
  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) and 2(k)
  respectively. "Plinth area" as defined clearly provides that when
E one building has more than one floor, the aggregate area
  includes all the floors. To give an example, a building consisting
  of four storeys belongs to_a single owner, the aggregate of all
  the floors are to be included for calculation of the plinth area
  and thereby the computation of the luxury tax has to be
F determined as provided..under Section 5A. Be it noted, the
  proviso to Section 2(k) clearly stipulates that if a building as
  referred falls under Explanation II to Section 2(e), the plinth
  area shall be calculated separately. The Explanation II refers
  to different apartments or flats owned by different persons. It
G also states that the cost of the construction of the building is to
  be met by all such persons jointly. This Explanation, as noted
  before, is required to be appositely understood. The learned
  counsel for the state would submit that if there is initial booking
  and the persons have contributed for the construction definitely
H there shall be separate computation. The Explanation II has to
    STATE OF KERALA& ORS.,v. AP. MAMMIKUTTY                          777
                [DIPAK MISRA, J.]

be read with Section 5A which starts with a non-obstante              A
clause. Section 5A as has been mentioned before refers to
"residential building" having plinth area 278. 7 sq. mts. or more
and, therefore, the said provision also takes note of this
definition. In view of the above, the contention advanced by
the learned counsel for the State is difficult to accept. The         B
definitions have to be given a proper construction. There can
be a case where the owner erects a multi-storied building
consisting 10 floors. He builds it at his own cost and thereafter
he sells the apartments or flats to 10 persons and in that event
he ceases to be the owner of the building. The 10 purchasers          C
become the owners of flats and in such a situation it will lead
to an absurdity because one single person who once owned
the entire building or several apartments, though has.ceased
to be the owner in law yet is asked to pay the luxury tax solely
                                                                      0
on the ground that at the time of construction there was no
contribution by the purchasers or to put it differently there had
been no prior booking. This is not the intention. The Explanation
II to Section 2(e) has to be read harmoniously with proviso to
Section 2(k) and Section 5A of the Act. The intention of the          E
legislature as gatherable is that ownership of different flats and
the cost 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 be1an.1investment before the
commencement of the construction of the building. The                 F
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          G
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 H
778           SUPREME COURT REPORTS                 [201S] 7 S.C.R.


A 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
B owner, he will not be liable to pay the luxury tax. But as long as
  he continues to be the owner, as per Section SA, he will be
  liable to pay the luxury tax for all floors/apartments subject to
  the cap provided under Section SA of the Act. In this context
  we may refer to the decision in State of T.N. v. Kodaikanal
C Motor Union (P) Ltd. 1 wherein this Court, after referring to
  K.P. Varghese b. IT02 and Luke v. IRC3, observed thus:-
         "The courts must always seek to find out the intention of
         the legislature. Though the courts must find out the
D        intention of the statute from the language used, but
         language more often than not is an imperfect instrument
         of expression of human thought. As Lord Denning said it
         would be idle to expect every statutory provision to be
         drafted with divine prescience and perfect clarity. As
E        Judge Learned Hand said, we must not make a fortress
         out of dictionary but remember that statutes must have
         some purpose or objec(whose imaginative discovery
         is judicial craftsmanship. We need not always cling to
         literalness and should seek to endeavour to avoid an
F
         unjust or absurd result. We should not make a mockery
         of legislation. To make sense out of an unhappily worded
         provision, where the purpose is apparent to the judicial
         eye 'some' violence to language is permissible."
G            16. In Keshavji Ravji and Co. v. CIT" it has been held
      by this court that when in a taxation statute where literal
      interpretation leads to a result that does not sub-serve the
      1 (1989) 3 sec 91
      2 (1981) 4 sec 112: 1981 sec (Tax) 293
H     3 (1964) 54 ITR 692: 1963AC 557 (HL)
      4 (1990) 2 sec 231
     STATE OF KERALA& ORS. v. A. P. MAMMIKUTTY                         779
                 [DIPAK Mls'RA_;'J.]

object of the legislation another construction in consonance A
with the object can be adopted.

          17. In the case at hand, as is noticeable, the.learned
 Single Judge had remanded the matter to the revenue authority
 and the Division Bench has declined to interfere. The Division         B.
 Bench has applied the functional unit test. We do not accept
 the same. The learned Single Judge, as we have reproduced
 a paragraph hereinbefore, has opined that when the plinth area
 of any residential apartment is above 278.7 sq. mts., then the
 authority can demand luxury tax for such apartment or flat. Be        C
 it noted, the learned Single Judge has held that even if the
 person is the owner of the entire building the computation would
 be apartment-wise. The said analysis is also inco.rrect. We
 have given purposive interpretation to Explanation II as it has
to be read with Section 5A of the Act. When the owner parts            D
with the building each apartment will be segregable for the
purpose of luxury tax. If he remains the owner for the whole or
part then he will be liable to pay for the plinth area in respect of
the flats or apartments that is retained by him subject to the
cap as envisaged under Section 5Aof the Act. If he sells away          E
the entire building then it has to be flat/apartment-wise
calculation/computation, for every apartment owner is different
than the others. Thus, the plinth area would be different. To
clarify further, if a singular person·patchases three flats, he will   F
be liable on the basis of aggregate plinth area subject to the
cap envisaged under Section 5A of the Act.

        18. In view of the aforesaid, we allow the appeal and
set aside the order of the revenue authority and that of the
High Court in writ petition and the writ appeal, and r~mand the G
matter to the revenue authority to compute the luxury tax in the
manner which we have clariijed h~reinabove. There shall be
no orcteras to costs.
KalpanaK Tripathy                                    Appeal allowed,   H