In The Gateway Hotels v. Kochi Municipal Corporation [2025:KER:31602], the High Court of Kerala has ruled that the three-year period of limitation prescribed in the Kerala Municipality Act, 1994, will prevail over the general 12-year period provided under the Limitation Act, 1908.
The Special Law on Limitation Prevails
The Court held that even though property tax is a “charge on the property,” for which the Limitation Act provides a 12-year recovery period, the specific three-year limit under Section 539 of the Kerala Municipality Act must be given preference.
The judgment clarified that other provisions, such as those creating a charge on the property (Section 237) or allowing recovery as public revenue arrears (Section 538B), do not extend this three-year limitation period. Consequently, a municipality’s power to recover property tax is strictly limited to arrears from the three years immediately preceding the demand.
The Court’s Application and Relief
The case was brought by hotel and building owners within the Kochi Corporation who challenged demand notices for property tax arrears dating back to the 2016-17 financial year.
Applying its ruling, the High Court held that the petitioners were only liable to pay the property tax at the revised rates for the three-year period immediately prior to the date of the demand notice.
The Corporation cannot recover any tax arrears for the period before this three-year window.
The property owners cannot be considered defaulters or subjected to any prejudice for the non-payment of tax for those earlier, time-barred periods.
