When the Corporation is assessing the property for taxation, the rateable value has to be determined by keeping in view what rent the property could fetch if it is let. The probable rental has to be kept in mind and that is to be considered in view of rule 91 which reads:-
"In order to fix the rateable value of any building or land assessable to a property tax there shall be deducted from the amount of the annual rent for which such land or building might reasonably be expected to let from year a sum equal to ten percent of the said annual rent, and the said deduction shall be in lieu of all allowances for repairs or on any other account whatever."
In addition to this, the location in which the said building exists has to be kept in mind. It is to be understood reasonably as to what it would fetch if let and keeping that in view, due consideration has to be given to the material which has been used in construction and use of the said premises. There has to be equal assessment in respect of similar premises and if there happens to be any equality, the rateable value so concluded should be a reasonable conclusion. There is a process of keeping in view all relevant factors while determining rateable value of a property. The word "determined" means that there has to be rational process adopted for the purpose of coming to the conclusion that particular amount is the rateable value and for that there is a process of determination which includes the application of mind in the judicious way. Abrupt and irrational assumption of rateable value cannot be treated to be within judicial process.
Bombay High Court
The Municipal Corporation Of The ... vs Haridas Govinddas Gujrati on 7 January, 2002
Equivalent citations: 2002 (4) BomCR 260, (2002) 3 BOMLR 779, 2002 (2) MhLj 215
Bench: J Chitre
1.The petitioners are assailing correctness, propriety, and legality of the order passed by the 8th Additional District Judge, Pune in the matter of Misc. Civil Appeal No. 320 of 1985 whereby he confirmed the judgment and order passed by Judge, Small Causes Court, Pune in the matter of Municipal Appeal No.10/1984.
2. Few facts need to be stated for unfolding the controversy. The respondent is having a bungalow known as "Shree" at A-6, Suparshwanath D Cooperative housing Society, Ltd., 692/693, Market Yard Road, Gultekadi, Pune. A demand notice was sent to the respondent wherein the rateable value of his bungalow was stated to be Rs.6700/- per annum. The respondent filed appeal under section 406 of Bombay Provincial Municipal Corporation Act 1949 (hereinafter referred to as the Act, for convenience) and challenged the said rateable value and resultant taxes. He also challenged the notice dated 8/2/1984 bearing No.PS/S/7215 served on him on 7/3/1984 by which he was assessed to the tune of Rs.16800/- per annum. The respondent challenged the said assessment by submitting that there was no effective hearing before the investigating authority who finished the matter in less than five minutes and told the appellant that he was fixing the rateable value as per the directions in the circular issued by the Municipal Commissioner. The respondent also raised objection that circular cannot take the place of law because it was not issued under any provisions of the Act or Rules thereunder. It was also put in challenge that there was discrimination caused. Rateable value of Dr.Bramechas bungalow was Rs.5000/-which was just in front of the bungalow belonging to the respondent. It was also averred in challenge that only few days before the case in question, in a case bearing No.A/112 rateable value was taken to be different. The learned Small Causes Judge took the view that rateable value of the building is fixed in accordance with the provisions of the Act and Rules for the purpose of assessment of property taxes. In Chapter VII of taxation Rules Rule 7 has laid down how the rateable value is to be determined. He held that the rateable value can be determined by ascertaining the amount of annual rent for which the building may reasonably be expected to be let and while doing so a note has to be taken in respect of due loss for the repairs if the premises is occupied by the owner. He opined that the Assessor and Collector of Taxes did not attempt to asses the annual rental income which the property involved would have fetched. He also pointed out that while fixing the rateable value, there was discrimination between Dr. Bramechas bungalow and respondents bungalow. He took the carpet area and decided that the rateable value was Rs.2961/- and rounded off to Rs.3000/-.
3. The present petitioner Municipal Corporation, Pune challenged the said order by filing Misc.Civil Appeal No.320/85 which was decided by the 8th Additional District Judge, Pune. The learned Additional District Judge by quoting rule 7, sub-rule (1) as well as rule No.91 held the rateable value would be Rs.2100/-. The petitioners challenge this order passed by the Additional District Judge, Pune by this petition.
4. When the Corporation is assessing the property for taxation, the rateable value has to be determined by keeping in view what rent the property could fetch if it is let. The probable rental has to be kept in mind and that is to be considered in view of rule 91 which reads:-
"In order to fix the rateable value of any building or land assessable to a property tax there shall be deducted from the amount of the annual rent for which such land or building might reasonably be expected to let from year a sum equal to ten percent of the said annual rent, and the said deduction shall be in lieu of all allowances for repairs or on any other account whatever."
In addition to this, the location in which the said building exists has to be kept in mind. It is to be understood reasonably as to what it would fetch if let and keeping that in view, due consideration has to be given to the material which has been used in construction and use of the said premises. There has to be equal assessment in respect of similar premises and if there happens to be any equality, the rateable value so concluded should be a reasonable conclusion. There is a process of keeping in view all relevant factors while determining rateable value of a property. The word "determined" means that there has to be rational process adopted for the purpose of coming to the conclusion that particular amount is the rateable value and for that there is a process of determination which includes the application of mind in the judicious way. Abrupt and irrational assumption of rateable value cannot be treated to be within judicial process.
5. In the present matter the judgment and order which has been passed by the Small Causes Judge shows that no appropriate reasoning has been given by municipal authority as to how the said rateable value was concluded to be Rs.6700/-. It shows further that there has been discrimination between bungalow belonging to Dr. Bramhecha and bungalow belonging to respondent though both the bungalows are situated in the same locality and in front of each other. In addition to that, the material on record shows that better material has been used while constructing Dr.Bramhechas bungalow but even then the rateable value of bungalow of Dr. Bramhecha was determined to be Rs.5000/- and the rateable value of bungalow of the respondent was taken to be Rs.6700/-. This is not the conclusion drawn by judicial process of determining the rateable value. It is to be "determined" and not be picked up by "discriminating".
6. That approach of corporation has been criticised by the learned Small Causes Judge and he determined that the rateable value should be Rs.2962/-( the judgment and order passed by the Additional District Judge ) he rounded up with sum of Rs.3000/-.
7. When the matter was considered by the learned Additional District Judge, Pune by quoting rule 91 he deducted that sum of Rs.2962 by 40% because if the premises is occupied by the owner, there has to be reduction of 40% and due weightage has to be given to the loss caused for repairs. Thus the learned Additional District Judge arrived at the conclusion that rateable value would be Rs.2100/-, which according this Court is correct, proper and legal.
8. The Counsel appearing for the petitioners submitted that the process which has been adopted by the learned Small Causes Judge and the learned Additional District Judge is erroneous and not consistent with the law. This Court discards it because it is mere submission and void of any material to substantiate it.
9. When this Court is to exercise the jurisdiction under Article 227 of Constitution of India, this Court has to keep in mind that in fit cases only it should interfere for "superintendence". The present case does not need any interference from this Court, because both the Courts below have given good reasoning for substantiating their verdict. Both the Courts below have pointed out that the rateable value fixed by the Corporation was without basis and without due process which is to be followed in judicious way for determining rateabl value. Both the Courts pointed out that the said rateable value is not "determined" by following due process of law and reasoning. Thus, this petition stands dismissed with costs. Rule stands discharged.
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