The non-assessment of property tax of identified buildings has resulted in huge revenue loss running into crores of rupees to the Kochi corporation.
This was stated by the Comptroller and Auditor General (CAG) in its report on Local Self Governments for the period ending March 2011.
The CAG has pinpointed three buildings—Mini Muthoot Towers, Cochin Port Trust buildings and Konkan Storage Systems Private Ltd.—as cases which resulted in revenue loss to the Corporation.
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The revenue loss from Mini Muthoot Towers was estimated at Rs. 1.03 crore. Of this, tax amounting to Rs. 56.96 lakh has become time-barred due to a provision of the Kerala Municipal Act which stated that demands for tax claims cannot be made beyond three years after it had fallen due, it reported.
According to the report, Mini Muthoot Towers, a 22-storied commercial building with plinth area of 11,527.80 sq.m, was issued construction permit in November 2005. Though the permit expired in November 2008, it was not renewed.
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Its owner had not furnished the completion certificate till January 2012 stating that the clearance of the Fire and Rescue was not obtained.
The failure to obtain the clearance certificate is not a valid reason for the non assessment of the building from the date of its completion, the CAG pointed out.
The corporation had assessed the 14 and 15 floors of the building from October 1, 2006 and the 12th floor from April 1, 2008 treating them as unauthorised constructions. Site inspections held in November 2011 revealed that the construction of the entire building was completed.
Hence the entire building was assessable from October 1, 2006, it said.
When contacted, B. Bhadra, Deputy Mayor, said that the case pertained to the period when the LDF was in power.
After the new council came into power, the entire building was assessed and tax was collected with effect from October 10 this year.
The provisions of the Municipalities Act prevented the corporation from collecting tax for the time-barred period, she said.
Not assessed
The main building of the Cochin Port Trust, the Port Trust Training Institute and the Port Trust Marine Buildings were not assessed even though the assessment process was initiated in December 2009.
The civic authorities stated that delay in getting the necessary information from the Trust as the reason for non-assessment.
Time barred
The estimated revenue loss in this case was Rs. 16.80 lakh. Of this, Rs. 12.81 lakh pertaining to 2008-09 has become time-barred, it said.
Ms. Bhadra clarified that a recent joint inspection carried out by the officials of the trust and the civic body had identified the taxable buildings, which included the main office also.
Though the construction of the Konkan Storage Systems in the Mattanchery zone was competed in 2003-04, the tax assessment was done only in April 2011.
Of the Rs. 39.21 lakh tax assessed for the building, Rs. 28.76 lakh has become time-barred. The reasons for the delay in assessments were not available and the assessee had not paid the tax till date, the CAG said. The Deputy Mayor clarified that a case was pending in the Kerala High Court regarding the tax assessment of the building of the company. Hence, one cannot say that the amount has been lost, she said.