Section 5A Tax on Buildings Valid as It’s Not a Luxury Tax, But Recovery Barred Beyond 3 Years: Kerala HC

The Kerala High Court has affirmed the constitutional validity of Section 5A tax on buildings, clarifying it's not a luxury tax but a property-based levy, though recovery is barred beyond three years. This significant judgment distinguishes the levy from a 'luxury tax' and confirms the state's power to impose it, even post-GST implementation. However, the court provided a crucial relief by restricting the period for which past dues can be claimed, ensuring demands are not indefinite. This balances the state's revenue-generating powers with a reasonable limitation period for taxpayers, providing much-needed clarity on the nature and enforceability of this building tax.