HARBANSLAL MALHOTRA & SONS PVT. LTD. versus KOLKATA MUNICIPAL CORPN. & ANR.

Citation: [2017] 11 S.C.R. 526 · Decided: 05-09-2017 · Supreme Court of India · Bench: R.K. AGRAWAL · Disposal: Appeal(s) allowed

Judgment (excerpt)

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[20 l 7] 11 S.C.R. 526 
HARBANSLAL MALHOTRA & SONS PVT. LTD. 
v. 
KOLKATA MUNICIPAL CORPN. & ANR. 
(Civil Appeal No. 3337 of2007) 
SEPTEMBER 05, 2017 
[R. K. AGRAWAL AND ABHAY MANOHAR SAPRE, JJ.J 
Calc1111a A111nicipol Co1yJoration Act, 1980 - ss.174 and 178 
Tax on the premises - Annual valuation - Derermination of -
AJJpella11t is the 01v11er of' the pre111ises. c:unsisting of ra·a-storey 
building and some land appurtenant there10 - Assessing Officer 
determined the annual rn/ue of the premises, for the assessment 
year (1988-89) (3"' quarrer} as Rs.59.4001- and for the assessment 
year (1994-95) (3"' quarter) as Rs.4.25,61101- - Aggrieved. appellant 
(assessee} filed appeals before Tribunal. which upheld the valuation 
of Rs.59,4001-, however, reduced the annual i•aluation of 
Rs. 4, 2 5, 6001- to Rs. 7 5. 4001-
in accordance with procedure 
prescrihed in s.174(1) - High Court held that t/1e Tribunal was not 
right in making an assessment of the premises by clubbing land and 
building, it should have been done separately }or determining their 
respective annual value uls. 174(1) and (2) of the Act - On appeal. 
held: s.174 deals with two types of assessment .for determining the 
annual value of land or building - One is in relation to the "land 
on which the building is built", it is govemed by sub-section(/} of 
s.174 and the other is in relation to the "open land", i.e .. the "land 
on which no building is built", it is govemed by suh-section (2) of 
s.174 - In case of s.174(1), the assessing authority is required to 
take land and building as "single unit" for determination of its 
gruss annual rent lVhich is reaso11ablJ 1 expecteli tu /'etch at the ti111e 
<Jl assessmellt fi'o11' year ro year - It is also clear fi'om s.l 7S(2)(i) 
and (ii}, which provides that every huilding together with the site 
and the land appurtenant therero shall be assessed as a "single 
unit" -- s.174(/) and (2) operare in separate field. bolh cannot be 
cluhhed jor determination of the gross annual remal value of land 
or building - When legislature itself has carved out two categories 
(}(cases namely, (I} "land or !wilding" (2) "open land with no 
building thereoll" and has accordingly provided different rates and 
526 
HARBANSLAL MALHOTRA & SONS PVT. LTD. v. KOLKATA 
527 
MUNICIPAL CORPN. 
different method< of assessment, it does not appear logical to club 
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both the categories of cases - Tribunal followed proper procedure 
by applying s.174(1) jiJr determining the gross annual value - Order 
of the Tribunal restored. 
Interpretation of Statutes - Tax Laws - Held: It is a settled 
rule of interpretation in relation to tax laws that a machinery B 
provision which enables the assessee to avail of a concession or 
benefit conferred by substantive provision in the Act, such provisions 
are required to be constn1ed liberal~v. 
Allowing the appeal, the Court 
HELD: I.I Reading of Section 174 of the Calcutta Municipal 
Corporation Act, 1980 shows that it deals with two types of 
assessment for determining the annual value of land or building. 
One is in relation to the "land on which the building is built" and 
the other is in relation to the "open land", i.e., the "land on which 
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no building is built". So far as former is concerned, i.e., land on D 
which building is built, it is governed by sub-section (1) of Section 
174 whereas so far as the latter is concerned, i.e., open land on 
which no building is built, it is governed by sub-section (2) of 
Section 174. [Para 13][536-G] 
1.2 In the case of former, the assessing authority is required 
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to take land and building as "single unit" for determination of its 
gross annual rent which is reasonably expected to fetch at the 
time of assessment from year to year. To illustrate, if the building 
has some appurtenant land which is exclusively used by the owner 
for garden or/and parking the vehicles, such building or/and land 
may fetch more rentals as compared to a building, which docs· F 
not have these facilities or has very small land appnrtenant to 
the building. In any case, such building and the land cannot be 
separated for determining their gross annual rent. Such case, 
therefore, would fall in sub-section (I) of Section 174. The annual 
value and gross annual rent of such premises have to be, 
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therefore, determined as per the procedure prescribed in sub-
section (1) of Section 174 of the Act. [Para 14](536-H; 537-A-B] 
1.3 The proviso to sub-sec

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