Full Judgment Text
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PETITIONER:
THE SURAT TEXTILE MARKET, COOPERATIVE SHOPS AND WAREHOUSES,
Vs.
RESPONDENT:
MUNICIPAL CORPORATION OF THE CITY OF SURAT
DATE OF JUDGMENT: 25/11/1997
BENCH:
A.S. ANAND, S. RAJENDRA BABU
ACT:
HEADNOTE:
JUDGMENT:
THE 25TH DAY OF NOVEMBER, 1997
Present:
Hon’ble Dr. Justice A.S. Anand
Hon’ble Mr. Justice S. Rajendra Babu
K.G. Shah, Sr. Adv. , M.N. Shroff, Adv. with him for the
appellant
S.K. Dhclakia, Sr. Adv., S. B. Naik and S.C. Patel, Advs.
with him for the Respondent
O R D E R
The following Judgment 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 :-
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 Acts, 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 income derived by the appellant, in the
rental value of revolving restaurant, holding that the
appellant derived 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 dismissed the appeal holding that the appellant
had let out the revolving restaurant with the convenience of
t he lift and the charges collected by it from the customers
at the rate of Rs. 1/- per person visiting the revolving
restaurant by using that lift were to be included in the
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rental value. A Regular Civil Appeal was thereafter filed
under Section 411 of the Act by the appellant 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 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 Rs. 1/-per 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 of
purposes 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 defined in Section 2(1A) of
the Act, the relevant portion of which reads as follows:-
’annual letting value’ means, --
(i) in relation to any period prior
to 1st April, 970, the annual rent
for which any building or land or
premises, exclusive (of) furniture
of machinery contained or situate
therein or thereon, might, if the
Bombay Rents, Hotel and Lodging
House Rates control Act, 1947 (Bom.
LVTI of 1947) were not in force,
reasonably be expected to let from
year to year with reference to its
use;
(ii) in relation to any other
period, the annual rent for which
any building or land or premises,
exclusive of furnitures or
machinery contained or situated
expected to let from year to year
with reference to its use;
and shall include all payments made
or agreed to be made to the owner
by a person (other than the owner )
occupying the building or land or
premises on account of occupation,
taxes, insurance or other charges
incidental thereto;
The High Court noticed that the lift which was provided
and was to be used for going to the 14th floor, was meant
only for the use of the revolving restaurant and, therefore,
that lift was in the nature of an exclusive passage or an
access to the revolving restaurant. According to the High
Court :-
"It is clear that this particular
lift, was intended to be an
exclusive passage for going to the
revolving restaurant on the 14th
floor and it should be views
(viewed) as such in the context of
imposing municipal Taxes under the
Act. The provision for such
exclusive passage to the revolving
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restaurant cannot be compared with
rendering services or giving the
amenities of providing hot water to
the tenants in a building."
The High Court after referring to various judgments
cited before it rightly concluded that the lift provided for
the restaurant was an integral part of the building and on
the basis of that finding held that the respondent -
Corporations was entitled to impose tax in respect of that
passage through the use of the lift since it constituted an
integral part of the building for access to the 14th floor.
The lift which has been provided for use of the
customers intending to go to the revolving restaurant on the
14th floor is meant exclusively for use of the customers
visiting the revolving restaurant. This position has been
admitted by Mr. D.P. Dalal, the Manager of the appellant-
Society who was examined as a witness. He categorically
admitted that t he revolving restaurant was given on lease
with the under standing that it would be given a separate
facility of the lift and that "the lift is provided only for
the restaurant". This evidence makes it abundantly clear
that the facility of the lift was required to be treated as
an integral part of the building and that being so, the
respondent was justified in including 50% of the 50% of the
income received by the appellant in the annual letting
value. It is not possible to agree with learned counsel for
the appellant that the provision of lift was in the nature
of an amenity or service. Whereas an amenity or service may
also be considered to be for the beneficial use of the
residents of the building, provision of an exclusive passage
to a portion of the building, is an essential and an
integral part in so far as that building is concerned.
Learned counsel for the appellant. however, submitted that
the lift is not meant. Only for the customers visiting the
revolving restaurant but is also meant for those visitors
who intend to go to the observation gallery. The argument
does not have any substance cause of the evidence of Mr.
Dalal to which we have already made a reference. That
evidence categorically shows that the lift was meant
exclusively for the use of the restaurant and, therefore, it
does not lie in the mouth of the appellant now to urge that
the lift was also for the use of the persons visiting the
observation gallery. Property tax in respect of such an
integral part of the building was, therefore, required to be
levied by the corporation. Learned counsel does not question
the quantum of tax.
In this view of the matter we find that the High Court
committed no error in dismissing the writ petition,
upholding the order of assessment as also the orders of the
appellate authorities. We do not find any merit in this
appeal which consequently fails and is dismissed but without
any order as to costs.