Central Warehousing Corporation vs Municipal Committee and Another

T.H.B. Chalapathi, J.—This writ petition is filed to quash the tax bills issued by the Municipal Committee, Abohar for the year 198283 vide Annexures P-3 and P-4 demanding property tax and water tax of Rs. 19,440/- and Rs. 8,100/- respectively.

According to the petitioner, the petitioner constructed Godowns (warehouses) at Abohar for the preservation and storage of foodgrains and other agricultural produce, implements fertilizers and commodities notified by the Government of India from time to time and the construction was completed on 3.5.1982. The Municipal Committee, Abohar, issued a notice to the Manager of the petitioner corporation to show cause why the proposed assessment of annual value of the petitioner''s godowns for the period 1.4.1981 and 31.3.1982 be not confirmed. The petitioner filed objections to the said notice, but without affording any opportunity the Municipal Committee, issued tax bills for the imposition of house tax and water tax for the year 1982-83 vide Annexures P-3 and P-4 respectively.

The petitioner in this writ petition has challenged the assessment of the house-tax and water tax for the year 1982-83.

The petitioner deposited the tax under protest and filed an appeal before the Deputy Commissioner, Ferozepur, who rejected the appeal and confirmed the imposition of the house-tax and water tax. According to the petitioner, the Punjab Municipal Act does not authorise the imposition of water tax on the godown or building and the imposition of house-tax @ exceeding 15% of the annual value of the building is liable to quashed. Further according to the petitioner the Municipal Committee, Abohar 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 imposition of the house-tax on the property of the petitioner. Therefore, the petitioner is seeking the quashing of Annexures P-3 and P-4 whereby the house-tax and water tax have been demanded from the petitioner.

In the written statement, it is averred that the tax was imposed by following the procedure provided under the Act and the petitioner was not able to show any ground against the assessment. The Municipal Committee is entitled to levy and recover the water tax under the provisions of Section 3 of the Act and that there are no grounds warranting interference with the imposition of the house-tax and water tax.

I have carefully perused 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 Municipal Committee before imposing the house-tax and water tax. I am of the view that in view of the decision of the Supreme Court in Bhagwanti Rai v. State of Punjab (Judgments Today 1995 (6) S.C. 245 the matter has to be remanded to the Municipal Committee, Abohar to redetermine 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 orders of the assessing authority and the appellate authority are set aside and they are directed to determine the amount of tax, as indicated hereinabove."

Thus, I am of the opinion that in view of the above decision, the Municipal Committee 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 Annexures P-3 and P-4 imposing house-tax and water tax are liable to be set aside and the matter has to be remanded to the Municipal Committee, Abohar for determination of the annual value and impose the tax accordingly.

In the result the writ petition is allowed and Annexures P-3 and P-4 imposing house tax and water tax are set aside. The Municipal Committee, Abohar 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 of the petitioner. There will be no order as to costs.