LexTHE CENTURY SPG. & MFG. CO. LTD. versus DISTRICT MUNICIPALITY OF ULHASNAGAR
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A ll c D E G H THE CENTURY SPG. & MFG. CO. LTD. v. DISTRICT MUNICIPALITY OF ULHASNAGAR November 9, 1967 [J. C. SHAH, S. M. SIKRI AND J. M. SHELAT, JJ.] Bombay Di>rrict Municipal Act (Hom. 3 o/ 1901), ss. 4, 7, 59 60, 61,. 62, 63 and Home Tax Rules framed under s; 46 of the Act-Rules I, 3 and Schedule !-Notification selling up rnunicipality whether invalid for contravention of ss. 4 and 1-House 1'.ax Rules whether in conformity with ss. 59-63 of Act-Flat Rate on ccrpet area ·whether a perrnissible 1nethod of assessn1ent--Open land not liable to be included fur purpose of rating factory buildings. By notifications issued under the Bombay District Municipal Act 1901, the State of Bombay set up the respondent Municipality comprising por- tions of certain villag.;:s. The Munjcipality framed .House Tax Rules. under s. 46 of the Act and served notice to the appellant-company that it propo\c<l to assess its buildings at a certain amount. On, the appelants' objections, it was asked to furnish the cost. of constructions, which it failed to furnish. The a,!)pellant was serv~d a boUSe tax bill. Thereupon the appellant unsuccessfully filed petitions in the High Court under Arts. 226 and 2'27 of the Constitution for quashing the notifications, assessment. and bills. In appeal to this Court, the appellant, inter alw, contended : (i) that the notifications were invalid as ss. 4 and 7 of the Act!' do not permit the Ciovernrncnt to constitute a local area by including in it not villages hut only portions thereof; (ii) that the House Tax Rules w.ere not in conformity with ss. 59 to 63 of the Act, as they failed to prescribe the basis of valuation of e3:Ch class of property oQ which it imposed tlie house tax; what these. Rules provided was merely to impose the house lax at th•.! rate of 15% or Rs. 12/. whichever was more on the valuation arrived at <1fter deducting 10% from the annual Jetting value without specifying the method by which such annual letting value was to be arrived at . and (iii) that the bill served on the appellant was not in con- formitv with the Ruks, as (a) the buildings could be assessed on their annual letting value and not at a flat rate on the carpet area, and (b) in asses~ing the rate it could not include the rate on open lands. Held : (i) The notifications were not in any way. contrary to or ultra rires ss. 4 or 7 of th~ Act. There is nothing either in ss. 4 or 7 to limit the pov ... cr of the Government in constituting a muni<.::ipal district to include therein the whole of the village or ·suburb. The Act .. on t!'ie other hand. pcrn1its the Government to include .. land adjoining thereto" which shows· that a part of land adjoining an existing village or a suburb can also be added if it is thought expedient so to do. Likewise, while altering the limits of an existing municipal district it C'dn exclude frola or include in it part of the Jand where it becomes necessary or expedient so to do. (216G, HJ (ii) The word "rate" in s. 59(i) means a tax for local purpo.ses im- posed by local authorities, the hasis of which is the annual value of the lands or buildings arrived at in one of the three ways. viz., ( 1) the actual rent fetched by such land or building where it is actually let; ( 2) where it is not let rent based on hypothetical tenancy particularly in the case of buildings ·and ( 3) where either of these two modes is not available. by valuatio.n ba')ed on capital value from v.·hich annual value has to be found 212 SUPREME COURT REPORTS [ 1968] 2 S.C.R. by applying a suitable percentage which may not be the same for Ja~js and building<. It is legitimate to infer that the legislature intended this meaning of the word .. rate" in s. 59 ( I) by using the word "rate" as ·distinct from other imposts specified in that very sub-oection and designated as toll, cess, tax etc. [218 C-E] " I~. case of huil~ing.~ or lands or. both the m:.inicipality colud impose a rate and. nut a tax '. The rate is as understood in such statutes. viz., on the basis not of capual but on the annual letting value ascertained by a~y of che >aid recognised melhods, . Soction 60 leaves it to the option of tbe- municipality for arriving at the annual value for assessment of the rate to choose any one of the aforesaid recognised methods, the only res- triction being that it must specify in the rules which basis of valualivn capital or annual letting value or
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