T.N. Singh, J.

One of us, sitting singly, having referred the matter to a Larger Bench, we are required to deal with and decide the controversy indicated below with reference to the question of law framed for the consideration of the Larger Bench.

During pendency of proceeding in this Court, the revisionist, Bhagwandas Mishra, died and his legal representatives have been brought on record. The question raised for decision is, whether Municipal Council, Mungavali, has rightly levied, property tax for three houses, as folios, on the owner, late Bhagwandas Mishra, for the year 1977-78, by order passed on 25-12-1980:

S. No. Ward No. House No. Annual Letting Property Tax

Value

1. 1 9-A Rs. 846/- Rs. 50.80

2. 2 26 Rs. 289/- Rs. 17.35

3. 2 7 Rs. 1980/- Rs. 118/-

An appeal, as provided under M. P. Municipalities Act, 1961, for short the Act, was taken challenging the levy. That was heard and decided on 10-2-1981 by Civil Judge, Class II, Mungavali. In the appeal, it was contended that as per section 127A(2)(b) of the Act, no property tax for House No. 26 of Ward No. 2 and House No. 9A of Ward No. 1 of Mungavali Municipality was payable as annual letting value of each of the houses was below Rs. 1,800/-. The contention was rejected and that is reagitated in this revision.

We propose to extract relevant portions of the provisions cited:

"127A. Imposition of property tax. - (1) Notwithstanding anything contained in this Chapter, as and from the financial year 1976-77, there shall be charged, levied and paid for each financial year a tax on the lands or buildings or both situate in a municipality other than Class IV municipality at the rate specified in the table below:

TABLE

(i) where the annual letting 6 percentum of

value exceeds Rs. 1,800 but does the annual letting

not exceed Rs. 6000 value.

(Clauses (ii) to (v) not extracted)

(2) The property tax levied under sub-section (1) shall not be leviable in respect of the following properties, namely:-

(b) biuildings and lands the annual letting value of which does not exceed eighteen hundred rupees:

Provided that if any such building or land is in the ownership of a person who owns any other building or land in the same municipality, the annual letting value of such building or land shall for the purpose of this clause, be deemed to be the aggregate annual letting value of all buildings - or lands owned by him in the municipality;........"

Counsel has placed reliance on three Division Bench decisions of this Court but, those, in our view, do not support the contention pressed. The main decision indeed is in Nihalkarans case 1977 MPLJ 25 : 1977 MPLJ 712 which, according to us, on the other hand, contains observations negating the contention pressed before us by Shri Lahoti. Indeed, in that case, the question agitated was a different one. Grievance of a different nature had to be considered in that case, albeit founded on a provision similar to that contained in the proviso of section 127A(2)(b), aforequoted. In that case, the only contention raised and indeed rejected was that for the purpose of determining the rate at which tax could be charged on house property by Municipal Council, the basis will be the total amount of the annual letting value of all houses of the same owner in that Municipality and that the rate of tax so determined will be applicable to each of the houses. It was not the contention raised or the question decided in that case if any of the houses of the same owner was to be exempted from levy of property tax because the annual letting value of any of the houses was within the exemption limit contemplated. Be it mentioned in this connection that clause (c) of section 6 of the M. P. Nagariya Sthawar Sampatti Kar Adhiniyam, 1964, as also the proviso are in pari materia with that of clause (b) of section 127A(2) of the Act and its proviso.

At para 7 of the report in Nihalkaran (supra), it was observed, "while assessing the tax in regard to each unit of property the rate shall have to be fixed on the basis of the annual letting value of that property and not the total annual letting value of all the properties standing in the name of one person". The short-noted decision in Roshanlals case 1979 mpLJ SN 40 does not refer to Nihalkaran (supra) because the decision was rendered earlier, on 22-11-1976. However, as in Nihalkaran, the Bench deciding Roshanlal, relied on an earlier decision of this Court in Om Prakash 1973 MPLJ 918 : 1973 mpLJ 967 and also another decision. In that case also, it was held that annual letting value of each of the houses had to be assessed separately and the four buildings owned by the petitioner had to be treated as four separate units of assessment. Reliance by Shri Lahoti on this Courts another Bench decision in Municipal Council, Satna v. Birla Jute Manufacturing Co. 1983 MPLJ 235 : 1983 mpLJ 439 would also not benefit the revisionist. A different question was raised in that case about the different modes of determination of annual letting value, but it was still held that in so far as rate of tax is concerned, each building had to be treated as a separate unit.

At this stage, we may profitably refer to the question framed for our decision. That is as follows:

"In case of a "owner", owning more than one building and/or land, whether the Proviso to sub-section (2)(b) of section 127-A shall have overriding effect to the exclusion of the provision enacted in sub-section (1) of section 127-A"

The purport of the question was to test the contention of the revisionist that the owner was liable to pay tax only for House No. 7 of Ward No. 2 whose annual letting value was Rs. 1,980/- and the rate of tax that could be charged for that house could be calculated on the basis of total or aggregate of the annual letting value of the three houses owned by him because of what is stated in the Proviso. Accordingly, it has to be examined if the proviso afore-extracted of section 127A(2)(b) has to be regarded as a substantive enactment in itself, enacted in derogation of the provision contemplated under section 127A(1).

We have no intention to under-rate the difficulties that are often encountered in construing a proviso. However, we may refer appropriately in this connection, to the decision in S. Sundaram, : AIR 1985 SC 582 , wherein their Lordships summed up the different purposes which a proviso may serve in different cases. They observed that sometimes a proviso may be "so embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself. But, "normally, a proviso is meant to be an exception to something within the main enactment or to qualify something enacted therein which but for the proviso would be within the purview of the enactment".

In order to ascertain what purpose the proviso in question serves, it has to be examined as to what object clause (b) is meant to subserve. It appears to us that owners of small holdings are meant to be exempted by the Legislature from payment of property tax contemplated under section 127A(1). If any person owned one or more units of buildings and lands whose total annual letting value did not exceed Rs. 1,800/-, he has not to pay any property tax. Because of the expressions - "buildings and lands" - used in sub-section (2), clause (b), care was taken to ensure that if any person owned more than one unit of "buildings and lands" his liability to pay property tax was not exempted with reference to the exemption limit of Rs. 1,800/- contemplated under clause (b). For the purpose of testing his entitlement to the exemption, clubbing of annual letting value of all units of "buildings and lands" owned by him in the Municipality was contemplated. It is for this reason that in the proviso, the expressions emphasised are "for the purpose of this clause" and "deemed". It is difficult, therefore, to entertain the view that the proviso overrides the liability created under the main enactment, namely, section 127A(1). The object and purpose of clause (b) as also language used in the proviso makes it clear that the proviso in question is meant to serve as an exception only to the exemption contemplated under clause (b) of section 127A(1). The scope and ambit of the exemption is cut down and controlled by the proviso. In case of a single unit (of land and/or building), with annual letting value of Rs. 1,800/- the exemption is absolute; in other cases the proviso is attracted as indicated by the emphasized words "any other", of the proviso.

To the definition of the term "annual letting value" in section 126, our attention is drawn by Shri Lahoti to contend that clubbing thereof as respects several units is destructive of the main enactment and that is otherwise unconstitutional as well. We do not agree. In the preceding para we have already given reasons, on the interpretation of the object and language of clause (b) and its proviso, for taking the view that the proviso is not an independent and substantive provision and it has to be read as an exception to clause (b). However, we may look at the other provisions of the Chapter VII, captioned "Municipal Taxation", embracing sections 126, 127 and 127A etc. Those provisions make it clear that the incidence of the "Property Tax" is not shifted at any stage to entry 82 of List I of Seventh Schedule of the Constitution. At no stage and under no provision, not even of the proviso, "income" of owner of any land and building in the Municipality is taxed; it is his status of "owner" of any one or more unit of "lands and buildings" in the Municipality that provides nexus not for the said entry 82 but for entry 49 of List II of the same Schedule. As held in Khazan Chand : AIR 1984 SC 762 , the power to make a law with respect to a tax includes a power to make provisions in the relevant statute with respect to all matters ancillary and incidental to the levy, assessment, collection and recovery of tax.

The term "annual letting value" is defined to mean, really and actually, as per clause (iii) and the proviso, of section 126, the annual rent for the land and/or building for which the same "might reasonably be expected to be let out from year to year" (see, in this connection, Balbir Singh : AIR 1985 SC 339 ). There need not be actual receipt of rent or "income" by the owner from such property. According to section 127(1)(1), a Municipal Council may impose "a tax payable by the owners of houses, buildings or lands situated within the limits of the Municipality with reference to annual letting value of the house, building or land called property tax." The rate at which the tax can be charged, levied and collected is indicated in the Table appended to section 127A(1) of which the graduated scale provides for rates ranging from 6 percent to 20 percent of annual letting value of which the corresponding figures given are from Rs. 6,000/- to Rs. 24,000/- and more. There is no doubt that the Act envisages "annual letting value" as the single important factor for determining the mode and measure of taxation of all lands and buildings in the Municipality. The proviso expressly manifests its "deeming" object in respect of that factor, in relation to only clause (b) of section 127A(2), namely, the exemption contemplated thereunder. The deeming object touches "annual letting value"; and not the "owner". But, the legal fiction of the proviso must be given full effect to subserve its object and purpose of controlling the benefit conferred on the "owner" under clause (b), following established canons of interpretations. (See Syedabad Tea Co. v. S/Bihar : AIR 1983 SC 72 ; S/Andhra Pradesh v. Vallabhapuram Ravi : AIR 1985 SC 870 ).

For all the foregoing reasons, we answer in the negative the question framed for decision of this Larger Bench. We hold that the general liability of an owner, owning more than one building and/or lands in the Municipality in terms of sub-section (1) of section 127 A is not affected in any manner by the proviso to sub-section (2)(b) of section 127A. As earlier indicated, sub-section (2)(b) creates absolute exemption only in respect of owner of a single unit of which annual letting value is Rs. 1,800/- and in other cases recourse can be legally and validly taken to the proviso for determining liability of an owner of more than one unit in respect of property tax payable for the several units owned by him. Let it also be made clear that even when other units are found taxable because of aggregate of annual letting value exceeding Rs. 1,800/-, the rate of tax for each unit shall be as contemplated under the Table annexed to sub-section (1) of section 127A and in the matter of determining of rate applicable to the several units, the proviso has no role at all.

Although this matter would have gone in usual course for formal disposal before the Single Bench, it is considered unnecessary to observe that formality because one of us (Dr. T. N. Singh, J.) had made the reference. On merit, therefore, this revision is finally disposed of because the contention that was raised by revisionists counsel and reagitated before us has been found to be meritless and rejected. The impugned order passed in appeal by the learned Civil Judge upholding the assessment on houses abovereferred by Municipal Council, Mungavali is maintained.

In the result, the revision fails and is dismissed. However, in facts and circumstances of the case, we make no order as to costs.