THE SURAT TEXTILE MARKET COOPERATIVE SHOPS AND WAREHOUSES SOCIETY LTD., SURAT versus MUNICIPAL CORPORATION OF THE CITY OF SURAT

Citation: [1997] SUPP. 5 S.C.R. 459 · Decided: 25-11-1997 · Supreme Court of India · Bench: A.S. ANAND, S. RAJENDRA BABU · Disposal: Dismissed

Judgment (excerpt)

THE SURAT TEXTILE MARKET COOPERATIVE 
SHOPS AND WAREHOUSES SOCIETY LTD., SURAT 
v. 
MUNICIPAL CORPORATION OF THE CITY OF SURAT 
NOVEMBER 25, 1997 
[DR. A.S. ANAND AND S. RAJENDRA BABU, JJ.] 
Bombay Provincial Municipal Corporations Act, 1949: Sections2(JA) 
and 4ll. 
Municipality-levy qf Property tax-Determination of annual value-
Land taken on lease by appellant-Society-Building constructed thereon-
Revolving restaurant located on the I 4th floor of building-Appellant let out 
A 
B 
c 
the revolving restaurant-Lift provided for use of restaurant-Lift meant 
exclusively for use of the customers visiting the reiiolving restaurant-Charges D 
collected from the customers @ Rs.11- per per~on visiting the revolving 
restaurant-Inclusion oj 50% of the income received by appellant in the 
annual letting value of revolving restaurant-Challenge to assessment 
order-Order upheld by authority as weil as appellate authority-Writ 
challenging assessment dismissed by High Court-Appeal-Held, lift provided 
E 
for the restaurant was integral part of the building-'-Municipal Corporation 
was justified in including 50% the income received by the appellant in the 
annual letting value. 
CIVIL APPELLATE JURISDICTION : Civil App_eal No. 1597 of 1991. 
From the Judgment and Order dated 8.11.90 of the Gujarat High Court 
in C.A.No. 1627of1979. 
K.G. Shah and M.N. Shroff for the Appellant. 
S.K. Dholakia, S.B. Naik and S.C. Patel for the Respondent. 
The following Order of the Court was delivered : 
This appeal calls in question the judgment and order of the High Court 
of Gujarat dated 8th November, 1990 and arises in the following 
circumstances:-
459 
f 
G 
H 
A 
B 
460 
SUPREME COURT REPORTS [1997] SUPP. 5 S.C.R. 
The appellant is a cooperative society registered under the Gujarat 
Cooperative Societies Act, 1961. The respondent a Corporation Constituted 
under the Bombay Provincial Municipal Corporations Act, 1949 (hereinafter 
referred to as 'the Act') served the appellant with a show cause notice of 
assessment in respect of the building constructed by the appellant on Survey 
Nos.95 and 96, Paiki of Ward No.14, Umarwada on the land taken on lease 
by it from Surat Municipal Corporation. The appellant has constructed a 
textile market at the said site. The appellant filed objections to the said notice 
of assessment. After hearing objections, the assessment proceedings were 
finalised and the appellant was informed. The respondent while finalising the 
assessment proceedings added an amount of Rs.5,508/-, being 50% of the 
C income derived by the appellant, in the rental value of revolving restaurant, 
holding that the appellant derives income from the lift which is provided for 
taking visitors from the ground floor to the 14th floor, where the revolving 
restaurant is situated. The assessment order was challenged through a 
Municipal Assessment Appeal in the Court of the learned Civil Judge (Senior 
Division), Surat. By an order dated 26th August, 1977, the appellate authority 
D dismissed the appeal holding that the appellant had let out the revolving 
restaurant with the convenience of the lift and the charges collected by it from 
the customers at the rate of Re. 1/- per person visiting the revolving restaurant 
by using that lift were to be included in the rental value. A Regular Civil 
Appeal was thereafter filed under Section 411 of the Act by the appellant 
E against the judgment and order dated 26th August, 1977. The second appeal 
was dismissed and the judgment and order of the first appellate court was 
confirmed on 18th October, 1979. The appellant thereafter filed a writ petition 
under Articles 226/227 of the Constitution of India in the High Court of 
Gujarat challenging the judgment and order dated 18th October, 1979 passed 
by the learned Extra Assistant Judge, Surat in the Regular Civil Appeal. The 
F writ petition also came to be dismissed on 8th November, 1990. Hence this 
appeal by special leave. 
The basic question which requires our consideration in this appeal is 
whether the charges which the appellant collects at the rate of Re. I/- per 
G person for use of the lift could be added to the rental value of the revolving 
restaurant located on the 14th floor of the building for purpose of computation 
of property taxes by the respondent-Municipal Corporation? 
To answer the question it would be appropriate to first refer to the 
definition of the 'annual letting value'. The 'annual letting value' has been 
H de

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