STATE OF PUNJAB & ANOTHER versus BRITISH INDIA CORPORATION LTD.

Citation: [1964] 2 S.C.R. 114 · Decided: 15-02-1963 · Supreme Court of India · Bench: S.K. DAS · Disposal: Dismissed
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Judgment (excerpt)

1963 
P. H. Ira(l<illi 
•. 
Mjs. Air Fra11" 
C.Jndl4 
WdllcAH J, 
1963 
F1truary 15 
114 SUPREME COURT REPORTS [1964] VOL. 
respondent had however to justify· the order of dis-
missal before the Labour Court in view of the defect 
in the inquiry. It has succeeded in doirig so and 
therefore the approval of the Labour Court will 
relate back to the date on which the respondent 
passed the order of dismissal. 
The contention of 
the appellant therefore that dismissal in this case 
should take effect from the date from which the 
Labour Court's award came into operation must fail. 
There is no force in this appeal and it is hereby 
dismissed. 
In the circumstances we pass no order 
as to costs. 
STATE OF PU~JAB & ANOTHER 
v. 
BRITISH INDIA CORPORATION LTD. 
(S. K. DAS, A. K. SARKAH, K. c. DAS GUPTA 
and 'i\. RAJAGOPALA AYYANGAR JJ.) 
Properly 1'ax-Exemption-"Uscd for the purpose of a 
factory" and "Rent"-Mea11i11g of-Punjab Urban Immot'!lbk 
Property Tax Ac/, 1940 (Pb. 17 of 1940), ss. 3, 4-Punjab 
Urban lmmovabk Property Tax Rules, 1941, r. JS. 
The property involved in the first appeal was a set or 
room5 used for indoor games b)' the mill employees, one big 
-
hall used as the Gurkha (;uards Club, a set of rooms used as ~ 
Officers' Club and a set of roon1s used as residential quarters t 
~· 
by workers of the mills. The property involved in the second •---
appeal consi•ted of 200 quarters which had Leen allotted to the 
workers of the factory for their occupation. The question wa• 
whether these properties w<"rc exempted fro1n taxation under 
s. 4 of the Punjab Urban Immovable Property Tax Act, 1940, 
-
2 S.C.R. 
SUPREME COURT REPORTS 
115 
br not, 
The assessing Authority held that these properties were 
!fable to taxation, Appeals against the orders of the Authority 
were rejected by the Deputy Excise and Taxation Commis-
sioner. The respondents moved the High Court under Art. 226 
of the Constitution for getting the orders quashed. The High 
Court held in both cases that the petitioners were entitled to 
exemption prayed for and quashed the orders of assessment. 
The State of Punjab came to this Court] against the order of 
the High Court. 
Held, that no tax was leviable under the Punjab Urban 
Immovable Property Tax Act, 1940, in respect of the buildings 
in the two appeals and the High Court had rightly quashed the 
orders of assessment. In the first appeal, the buildings were 
allotted for the use of workmen and that was a purpose which 
was neceS5ary for the efficiency of workmen. In the second 
appeal also, the allotment of 200 quarters was necessary for the 
welfare and efficiency of workmen. Hence it must be held 
that the buildings were being used for the purposes of a 
factory. Just as the use of a building for a purpose which 
maintains the efficiency of the machines is a user for the pur-
po•e of a factory, so also is the user of a building for the pur-
pose of providing something which is necessary for maintaining 
· the efficiency of workers. 
Where a building is used for a pur-
pose which the Factory Law requires must be fulfilled in order 
that the factory may function, that user is also for the purpose 
of a factory. 
Held, also; that the word "rent" in cl. (ii) of r. 18 (4) 
of the Punjab Urban Immovable Tax Rules, 1941, means pay-
ment to a landlord by a tenant for the demised property and 
does not include payments made by licensees. 
London Go-operative Society Ltd. 
v. 
Southern Esaex 
AsBts8ment Oommitlu, [1942] I K. B. 53, referred to. 
CIVIL APPELLATE JURISDICTION : Civil_ Appeal 
No. 639 of 1961. 
. 
From the judgment dated August 4, 1960 of 
the Punjab High Court at Chandigarh in Letters 
Patent Appeal No. J 86of1957. 
AND 
Civil Appeal No. 287 of 1962. 
1963 
Stat1 of Punjab 
v. 
Briti1'1. ,India 
Corporation Ltd. 
1963 
Stat• of P>mju 
v. 
BritiJla /Mia 
G.rporaJioo Ltd. 
Du Gupta J. 
...... , ............ 
• ... ~ 
> -
.. 
+i-·-
.. 
116 SUPREME COURT REPORTS [1964] VOL. 
From 
the 
judgment 
and 
order 
datcil 
September 7, 1960, of the Punjab High Court at 
Chandigarh, in Civil Writ No. 216 of 1958. 
S. M. Sikri, Advocate-General 
of Punjab, 
N. S. Biiulm aud P. D . .Menon, for the appellants. 
Bhagimth Das and IJ. P. Jfahesl1wari, for 
respondent (In C. A. No. 6:l9i6 l ). 
A. V. Viswanatha Sastri, 0. P. Malhotra, 
0. G. J!athur, J. B. Dadachanii and Ravimkr 
Narain, for the respondent (in C. A. No. 287/62). 
1963. February 15. 
The Judgment of the 
Court was delivered by 
DAS GuPTA
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