TATA IRON AND STEEL CO. LTD. AND ORS. versus STATE OF WEST BENGAL

Citation: [2002] 3 S.C.R. 591 · Decided: 29-04-2002 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Dismissed
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Judgment (excerpt)

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TATA IRON AND STEEL CO. LTD. AND ORS. 
A 
v. 
ST A TE OF WEST BENGAL 
APRIL 29, 2002 
[S. RAJENDRA BABU AND DORAISWAMY RAJU, JJ.] 
B 
, 
West Bengal Multi-Storeyed Buildings Tax Act, 1979-Sections 2(j) and 
3-Tax-levy of on multi-storeyed buildings-Plea that the same is 
discriminatory because of want of nexus between nature of levy and c 
classification of the building under the Act-Held, levy of tax justified and is 
not discriminatory-Constitution of India, 1950-Article 14. 
After West Bengal Multi-Storeyed Building Tax Act, 1975 was held 
to be ultra vires, West Bengal Multi Storeyed Building Tax Act, 1979 was 
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enacted effecting several changes in the 1975 Act. Definition of 'owner' and D 
Section 3 were altered. 
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Appellants challenged the validity of the 1979 Act contending that 
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since the intention of the Act was to levy tax in respect of the covered 
portion of building occupied or possessed by the owner or deemed owner 
and not on the owner or on the entire building, therefore, levy of tax o~ E 
multi-storeyed building was discriminatory because of want of appropriate 
relationship or nexus between the nature of levy and classification of the 
building made in the Act. 
Respondents contended that appellants being owner of entire building, 
• .,, 
contention of part-ownership was not relevant; that Section 2(1) would 
F 
include such owners who own the entire building; and that such owner of 
building constitute a separate category of tax payers and hence mode of 
tax was j ustifia hie. 
Single Judge of High Court declared the 1979 Act as valid except G 
Section 25(2) of the Act which. was held to be ultra vires. The judgment of 
Single Judge was affirmed by Division Bench. Hence the present appeals. 
Dismissing the appeals, the Court 
HELD: l. It cannot be said that the unit of assessment changes from H 
591 
592 
SUPREME COURT REPORTS 
[2002) 3 S.C.R. 
A the entire multi-storeyed building to individual units occupied by deemed 
owner or occupier. The scheme of taxation, is upon the entire multi-storeyed 
building or part thereof. The expression 'owner', if read along with Section 
3 and Section 5 of the Act, will cover the multi-storeyed building and though 
for the purpose of taxation different units of the building are taken into 
B consideration, the taxation is on the entire building. (597-H; 597-F, (;) 
2. It is not correct to say that the taxation being on the covered space 
of a portion of a building would not be a relevant factor if multi-storeyed 
building is brought to tax. The levy is upon the multi-storeyed building is 
clear from. the provisions of Section 3 of the Act, but if the distribution of 
C the levy is made upon the owners and in some cases upon the occupiers it 
will not change the purpose of the Act to levy a tax on the multi-storeyed 
building by reason of the fact that tax is levied on such occupied or covered 
area in the multi-storeyed building which is in possession of the owner or 
the occupier. This kind of classification has been not on-known. 
D 
[598-A, B, CJ 
3. It cannot be said that the method of determining the rate of levy 
would be a relevant fact in considering the character of levy, and that the 
standard on which tax is levied is a relevant consideration in determining 
the nature of the tax although it cannot be regarded as conclusive in the 
E matter. From the scheme of taxation in the present case it is clear that the 
levy is upon the multi-storeyed buihijng or part thereof which may be in 
the occupation of the owner or a partkular occupier who is deemed to be 
the 'owner' thereof for the purpose of the Act. Therefore, the measure of 
taxation also does not vary in so far as the Act is concerned. [598-D, E] 
F 
Mis. R.R. Engineering Company v. Zilla Parishad, B~reilly and Anr., 
[1980) 3 SCC 330 and The Hinger-Rampur Coat Co. Ltd dnd Ors. v. The 
State of Orissa and Ors., [1961) 2 SCR 537, distinguished. 
Re. A Reference under Government of Ireland Act, (1920) (1936) 2 All 
G ER 111, referred to. 
4. It cannot be said that there is discrimination between two sets of 
buildings because of want of appropriate relationship or nexus between the 
nature of levy and the classification of the building made under the Act. 
The contention that if multi-storeyed buildings are classified into five stories 
H and above as against buildings having less than five floors, it would offend 
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TATA IRON AND STEEL CO. LTD. v. STATE [RAJENDRA BABU, J.] 5
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