LexM/S HINDUSTAN LEVER LTD. versus THE MUNICIPAL CORPORATION OF GREATER BOMBAY AND ORS.
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~ . .J ·--+ MIS HINDUSTAN LEVER LTD. A v. THE MUNICIPAL CORPORATION OF GREATER BOMBAY AND ORS. APRIL 26, 1995 B [K. RAMASWAMY AND B.L HANSARIA, JJ.] Bombay Municipal Corporation Act, 1888: Sections 146(1) Proviso and 154(2) c Property tax-Building-Rateable value-Detennination of-COst of Air Condition machinery and false ceiling-Held should be excluded while deter' mining rateable value-Embedding of machinery held not a relevant factor while deciding the applicability of exemption provision. Cost of wooden panition used to divide each floor into parts-Held D rightly included in calculating rateable value. Ground renHnclusion in detennination of rateable value-Held valid. Notional interest on amount deposited by assessee with Corporation for E undertaking constrnction as well as on total cost of construction-Inclusion in reteable value held not valid. Taxing Provision-Two reasonable interpretation possible-lnterpreta- ~ lion beneficial to the assessee should be given. F A building constructed by the appellant-Company was assessed by the respondent-Corporation under the Bombay Municipal Corporation Act, 1988 for levy of property tax. Its rateable value was fixed at Rs. U,16,285 by adopting comparative method. instead of contractor's method. The Small Cause Court held that the comparative method was not un- suitable but reduced the rateable value to Rs.9,97,555. The High Court held G that comparative method was unsuitable and that while determining the rateable value (i) cost of air condition machinery and false ceiling; (ii) ground rent and (iii) notional interest on amount deposited by assessee with corporation as well as on total cost of construction were to be taken into account. Accordingly, it enhanced the rateable value to Rs. 11,81,450. H 807 808 SUPREME COURT REPORTS [1995] 3 S.C.R. A In assessee's appeal to this Court on the question whether while adopting the contractor's method any wrong !tave been committed in fixation of the rateable value: Allowing the appeal in part, this Court B HELD : 1. The High Court erred in law not excluding the cost incurred by appellant on air condition machinery and on false ceiling. [810-F] 2. When the legislature sought to exclude the value of machinery of the type mentioned in sub-section (2) of Section 154 of the Bombay C Municipal Corporation Act from forming a part of rateable value, some meaning has to be ascribed to the provision, otherwise the intention of the legislature would get frustrated. The fact that a machinery gets embedded to a building or becomes an integral part of it has no relevance while deciding the question of applicability of the exemption provision. It contd not have been intended by the legislature that, say, only ~embedded D air-conditioners used for cooling a building would get the exemption, but not if the apparatus gets embedded and a central air-conditioning is provided in the building. [813-D-E, 814-D] Haji Dawood v. Municipal Commissioner, Pune, AIR (1922) Born. 386, E held inapplicable. Commissioner of Income Tax, Madras v. Mir Mohd. Ali, [1964] 7 SCR 846; Corporation of Calcutta v. Chairman,, Cossipore and Chitpore Municipality, 48 I.A. 435; Poona Municipal Corporation v. Shankar Ramkrishna Jabade, (1957) Born. Law Reporter 25; London County Council F v. Wilkins (Valuation Officer), (1955) 2 All E.L.R. 180; London County Council v. Wilkins, [1956] 3 All E.L.R. 38; Field Place Caravan Park Ltd. v. Harding (Valuation Officer), [1966] 3 All E.L.R. 247; Dick Hampton (Earth Moving) Ltd. v. Lewis (Valualion .Officer), (1975) 3 All E.L.R. 946; Industrial Weavers Cooperative Society Ltd. v. Collector, Hardo~ I.L.R. (1976) 2 Al- G lababad 161 and Musai Kurmi v. Sub Karan Kurm~ AIR (1914) Allahabad 176 (2), referred to. 3. The value of wooden partitions was rightly included in calculating reteable value. The wooden partitions in question do not apparently attract the provision of section 154(2) of the Act. They having been used to divide H each of the floors into parts and even ceiling columns having been designed + HINDUSTAN LEVER LTD. v. MUN!ClPALCORPORATION OF GREATER BOMBAY [HANSARIA, J.] 809 with such partition in mind, there is no doubt that the value of these A partitions did constitute and were rightly regarded as, part of construction cost. The fact that these partitions are fixed on sockets and are easily removable do to make any difference, as the building wa
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