Central Ware-Housing Corporation vs The State of Punjab and Others

T.H.B. Chalapathi, J.—This writ petition is filed to quash the assessment order dated 29.3.1989 vide Annexure P-3 passed by the Administrator, Municipality, Mansa vide which the property of the petitioner bearing Unit No. 3/475 was assessed at Rs. 8,10,000/- per annum for the purpose of house tax for the year 1989-90.

According to the petitioner, the petitioner constructed Godowns (Warehouse) at Mansa for the preservation and storage of food-grain and other agricultural produce, implements, fertilizers and other commodities notified by the Government from time to time. As averred in the petition, the godowns constructed by the petitioner fall within the Municipal area of respondent No. 3 and municipal number as 3/475-H was allotted to the said property of the petitioner. The Administrator of the 3rdrespondent by his order dated 29.3.1989 (Annexure P-l) assessed the annual ratable value of said property after hearing the objections which were filed by the petitioner on the receipt of assessment notice dated 9.2.1989. Against the aforesaid order of the Administrator, Municipality, Mansa the petitioner preferred an appeal before the Collector, Sub Division, Bathinda, who dismissed the same vide his order Annexure P-5 dated 17.5.1990.

The petitioner in this petition has challenged annual value of its property which was assessed at Rs. 8,10,000/- for the imposition of tax for the year 1989-90.

According to the petitioner, the imposition of house-tax @ exceeding 15% of the annual value of the building is liable to be quashed. Further, according to the petitioner the impugned order of assessment vide Annexure P-3 was passed by the Administrator at the back of the petitioner without hearing the objections filed by it. It was also contended by the Counsel for the petitioner that the 3rd. respondent has not followed the procedure as laid down under Sections 62 to 66 of the Punjab Municipal Act, 1911 (hereinafter referred to as the ''Act'') for the assessment and imposition of house-tax on the petitioner''s property. Therefore, the petitioner is seeking the quashing of orders, Annexures P-3 and P-5.

In the written statement, it is averred that the annual value of the property was assessed in accordance with the procedure provided under the Act and the petitioner was not able to show any ground against the said assessment. The Municipality, Mansa is entitled to levy and recover the house tax that there are no grounds warranting interference with the impugned orders Annexure P-3 and P-5.

I have carefully pursued the record and from the perusal of the record, it cannot be said that the annual rental value of the property has been fixed by the 3rd respondent before assessing and imposing the house-tax. I am of the view that in view of the decision of the Supreme Court in Bhagwanti Rai and Ors. v. State of Punjab and Ors., (Judgments Today 1995 (6) S.C.C. 245. the matter has to be remanded to the Municipality, Mansa, to re-determine the tax on the basis of the observations of the Supreme Court.

The Supreme Court in the above decision has referred to the earlier decision of the Apex Court in Dr. Balbir Singh and Others Vs. M.C.D. and Others, , wherein it has been held as follows:-

"The ratable value of a building, whether tenanted or self-occupied is limited by the measure of standard rent arrived at by the assessing authority by applying the principles laid down in the Rent Act and cannot exceed the figure of the Standard rent so arrived at by the assessing authority. The standard determinable on the principles set out in the Rent Act is the upper limit of the rent which the landlord may expect to receive from a hypothetical tenant, but it may in a given case be less than the standard rent having regard to various attendant circumstances and considerations."

It is further observed in Bhagwanti Rai''s case (supra) as follows:-

"Thus, it is settled law that the actual rent received from a tenant is not the measure for determination of the annual ratable value, but the reasonable standard rent expected to be received under the relevant Rent Act. The view taken by the authorities is, therefore, clearly illegal.

It is contended by the respondent that in view of the admission by the appellants in their letter that they are prepared to pay the tax on the basis of the actual rent received from the Bank, they are estopped to go back from the admission and the respondents are right to adopt that as a measure of assessing ratable value, we fail to appreciate the contention as there is no estoppel against the statute. When the statute prescribes particular mode to determine the annual rental value, it has to be done in that manner. Admission wrongly made by the landlord or the owner would not be a ground to deny the statutory benefit.

The appeal is accordingly allowed. The order of the assessing authority and the appellate authority are set aside and they are directed to determine the amount of tax, an indicated hereinabove."

Thus, I am of the opinion that in view of the above decision, the Municipality Mansa, is required to determine the annual value of the property for the purpose of determining the amount of tax in accordance with the provisions of Punjab Municipal Act. Therefore, I am of the view that orders Annexures P-3 and P-5 are liable to be set aside and the matter has to be remanded to the 3rd. respondent for determination for the annual value of imposition of the tax accordingly.

In the result, the writ petition is allowed and Annexures P-3 and P-5 are set aside. The Municipality, Mansa is directed to fix the annual value of the building in accordance with law in the light of the observations of the Supreme Court referred to above and determine the liability of tax payable by the petitioner. There will be no order as to costs.