LexGUNTUR MUNICIPAL COUNCIL versus GUNTUR TOWN RATE PAYERS ASSOCIATION
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A B c D E F G -l 2 ]'. GUNTUR MUNICIPAL COUNCIL v. GUNTUR TOWN RATE PAYERS' ASSOCIATI01' September l 8, l 970 [J. C. SHAH AND A. N. GROVER, JJ.] Madru.1· District Municipalities Act (5 of 1920). s. 82(2) Rew ,11 whic:h buildings nray reasonahly be expected to be let /ro111 111ontl1 ro ntontli-How dctcnnined. The appellant Municipal Council effected (a general revision of the rental values of houses and buildings in the municipality, under s. 82(2) of the Madras District Municipalities Act, 1920. for the purpose ol assessment of tax. On the question whether the appellant was bound to make the asse-s- ment in the light of the provisioos of the Rent Control Act, HELD : (a) Under s. 82(2) the test is what rent the premises can lawfully fetch if let out to a hypothetical tenant. The municipality is not free to assess any arbitrary annual value but has to look to and is lioun<l by the fair or the standard rent which would be payable for particular premises under the Rent Control Act in force during the year of assessment. (425 A-Bl Corpomtion of CalrnttCI v. S111. P"'/111a De.hi & Ors., I 1962] 3 S.C.R. 49. followed. (b) No distinction can be made between buildings the fair rent of which has been actually fixed by the Controller and· those in respect of wllich no such rent has been fixed. Where the Controller has not fixed the fair rent the municipal authorities will have to arrive at the fair rent according to the principles laid down in s. 4 of the Rent Control Act for the determination of fair rent. (425 F-0] (cJ Under the rules contained in the Fourth Schedule to the Muni· cipalities Act, the assessment books have to be revised once in every 5 years and the quinquennial assessment thus made enures for that period. But a procedure has been prescribed in the rules for changing the assessntent whenever a case is made out for doing so. Therefore. the assessment of valuation for the purpose of tax must be made in <1Ccord•nce with and in the light of the provisions of the Rent Control Act which would be in force during the period of assessment. [426 B-C] CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 1650 to 1652 of 1966. Appeals by special leave from the judgment and decree dated December 3, 1965 of the Andhra Pradesh High Court in Secona Appeals Nos. 367, 368 and 369 of 1962. B. V. Subrahmanyam and A. V. Rangam, for the appellant H (in ~II the appeals). M. Natesan and K. Jayaram, for the respondents (in all the appeals). 424 SUPREME COURT REPORTS [1971] 2 S.C.R'. The Judgment of the Coun was delivered by Gronr, J. These apj!Cllis have bee;1 brought by special leave from a judgment of the Andhra Pradesh High Coun. Three suits, namely, 0.S. Nos. 222, 223 and 466 of 1960 were filed in the Guntur coun in which the relief claimed was for a declaration ·that the general revision of the rental values of the houses and buildings effected by the Guntur Municipality in the year 1960 for the purpose of assessment of tax was ultra vires and illegal and for a consequential relief of a permanent injunc- tion restrainin~ the municipality from acting on the special notices issued to the tax payers. Section 81 of the Madras District Municipalites Act 1920, hereinafter called the "Municipalities Act" gives the description and classes Of property tax and other taxes leviable by the muni- cipality. Section 82 gives the method of assessment. It is provid- ed by sub-s. ( 2) of that section that the annual value of lands and buildings shall be deemed to be the gross annual rent at which they may reasonably be expected to be let from month to month or from year to year less certain deductions. The District Munsif by a common judgment delivered in the three suits held that the annual value had to ~ computed in the context of the rent that was payable under the Rent Control legislation. The suits were decreed and a declaration was granted that the general revision made by the Guntur Municipality in 1960 by increasing the rental value of houses to more than the rental value which pre- vailed on the dates provided in the Rent Control Acts in rorce prior to 1 %0 was ultra vires and illegal and permanent injunc- tions were granted restraining the municipality from acting upon the special demand notices issued to the rate-payers and from collecting the enhanced tax. Appeals were filed and the first appellate court substantially upheld the judgment of t
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