Kerala High Court Strikes Down Fee Based on Building Area Under Paddy Land Act

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The Kerala High Court ruled that the Kerala Conservation of Paddy Land and Wetland Act does not allow the imposition of a fee based on building size for constructions on converted land. The court deemed the fee ultra vires, mandating a refund of amounts collected and requiring permit applications to be processed without this fee.

Kerala: The Kerala High Court recently ruled that the Kerala Conservation of Paddy Land and Wetland Act, 2008 (Paddy Act) does not authorize the State to impose a fee based on the plinth area or extent of buildings constructed on converted land. Justice Mohammed Nias CP declared Note 1 to Rule 12(9) of the Kerala Conservation of Paddy Land and Wetland Rules, 2008, as ultra vires to the Paddy Act.

The judgment came while hearing a batch of petitions, including Abad Builders Private Limited v. State of Kerala & ors, challenging the State’s imposition of a fee of Rs 100 per square foot for buildings exceeding 3,000 square feet constructed on converted land.

The Court emphasized that

“Even if the government’s objectives are commendable, without an enabling statutory provision, the fee cannot be collected.”

The Court held that the imposition of such a fee is beyond the scope of the Paddy Act and the rule-making authority under Section 30 of the Act.

Arguments Presented

1. Petitioners’ Argument:
   • The fee based on building area was inconsistent with the legislative intent of the Paddy Act.
   • Such a levy was unjustifiable as the Paddy Act primarily governs land conversion, not construction activities.
2. State’s Argument:
   • The fee was grounded in the legislative intent to responsibly regulate land conversion, safeguard agricultural interests, and ensure compliance with ecological standards.
   • Section 27A(3) of the Paddy Act did not restrict the government from levying fees based on the plinth area or building size.

Court’s Findings

• The Paddy Act applies only to land conversion. Once the land is converted, construction or other activities are permissible, and the Act ceases to apply.
• The only fee contemplated under Section 27A(3) is based on the extent of the land, not the construction size.
• The Court held that the levy violated Article 265 of the Constitution of India, which mandates that no tax shall be levied or collected without the authority of law.

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The Court rejected the government’s argument that the fee was a measure to discourage large-scale developments or fund a “Paddy Cultivators Relief Fund.” It stated,

“Since the Act does not regulate building construction, such a levy cannot be justified.”

The Court ordered the following:

1. Refund of any amounts collected under the impugned fee within four months.
2. No further demands for the fee shall be made.
3. Applications for building permits must be considered without insisting on the payment of the impugned fee and in compliance with the relevant Building Rules.
4. Pending applications for permits must be processed within six weeks.

Case Title – Abad Builders Private Limited v State of Kerala & ors and connected cases

Read the Judgement here:

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