Omprakash Agrawal
v.
Deputy Property Tax Commissioner, M. P., Gwalior
(High Court Of Madhya Pradesh)
Miscellaneous Petition No. 127 Of 1970 | 06-04-1973
(2.) According to the petitioner, he is owner of three houses-a residential house in Ushaganj, Indore; business premises at Maharani Road, Indore; and a godown for business at Hathipala, Indore. It is alleged that the annual letting value of the house in Ushaganj, Indore, is about the limit as provided for in section 6 (h) of the Act, whereas the other two houses fall below the limit, and that at all the three houses are in personal occupation of the petitioner landlord, he was entitled to exemption under clause (h) of section 6 so far as the two houses at Maharani Road and Hathipala are concerned. But, according to the petitioner, the authorities under the Act have not granted exemption by totalling up the letting value of all the three houses and then sealing the exemption under clause (h) of section 6. It was also contended that even for the petitioners house in Ushaganj, he was entitled to exemption upto the limit provided for in clause (h) of section 6 and was liable to pay tax only on the balance of the annual letting value. It was further contended that the petitioners house in Ushaganj was after reconstruction for the first time assessed by the order dated the 17th December 1964 of the Officer of the Indore Municipal Corporation and, therefore, a tax on this basis could only be levied from the financial year commencing from 1st April 1965 and not before.
(3.) It was contended on behalf of the respondents that for the purposes of exemption buildings and lands have been mentioned in clause (h) of section 6 and, therefore, the total of the annual letting value of all the houses in possession of the landlord shall have to be made in order to find out as to whether the petitioner will be entitled to exemption or not. As regards the deduction from the annual letting value of the exemption amount under clause (h) of section 6, it was contended that under the Act the tax is on the property and no scheme for exemption upto a particular limit has been provided. It was also contended that although the assessment of the letting value of the house in Ushaganj is finally made by the Indore Municipal Corporation authorities by their order dated the 17th December 1964, but this order itself indicates that this assessment of the annual letting value shall come into operation from 1st December 1963, and consequently there was no error of tax on the basis of this assessment was levied from 1st April 1964.
(4.) Section 6 (h) of the Act reads thus :-
"6. The tax shall not be leviable in respect of the following properties, namely:- XXX (h) buildings and lands or part thereof in actual occupation of the owners thereof when the annual letting value of such buildings and lands or part thereof does not exceed Eighteen hundred rupees."
Clause (h) provides for exemption for tax of those buildings which are in possession of the owner himself. This clause, before amendment, provided the exemption limit to be three thousand rupees, and it is this limit which would be applicable to the present case. There is nothing in this provision to indicate that for purposes of exemption all the houses in possession of the owner will have to be considered together. There is also no justification to add up the annua) letting value of the three houses in possession of the owner petitioner, and then to find out whether they will fall within the exemption limit or not. Sub-clause (c) of section 6 provides for exemption from tax of buildings whose annual letting value does not exceed Rs. 500. Section 6 (c) is as under :- tax shall not "6. The be leviable in respect of the following properties namely :- xx xx (c) buildings and lands the annual letting value of which does not exceed five hundred rupees:- Provided that if any such building or land is in ownership of a person who owns any other building or land in the same urban area, the annual letting value of such building or land shall, for the purposes of this clause, be deemed to be the aggregate annual letting value of buildings or lands owned by him in the area." The proviso to clause (c) of section 6 clearly states that if in the same urban area a person owns more than one building, then for the purposes of this clause the Agra gate annual letting value of all the buildings owned by him in that area will be considered. Clause (c) of section 6, therefore, clearly indicates that where the Legislature intended that the annual letting value of all the houses of a particular owner should be added up for consideration of exemption, it has specifically so provided. It was contended on behalf of the respondents that in clause (h), the words "buildings and lands" have been used which are in plural, and in the latter part of that clause the phrase used is "the annual letting value of such buildings" and, therefore, this indicates that the total of the annual letting value of such buildings has to be considered. This contention cannot be accepted as it is clear that even in clause (c) the words buildings and lands" are used is plural and in place of such the phrase used is value of which. But on the basis of the phraseology no inference can be drawn as it is clear that the provision to clause (c) specifically provided for totalling up of the annual letting value while in clause (h) as such provision has been added. Consequently a perusal of the language of the various clauses of this section goes to show that the exemption granted in clause (h) is for a building or land independently. It is also clear that under the scheme of the Act the unit of tax is a building (property) and not a person. It cannot be therefore doubted that for the purposes of exemption under clause (h) each of the buildings in possession of the owner will have to be independently considered and it is on that basis only that it can be decided as to which of the buildings fall within the exemption limit. In this view of the matter, therefore, it cannot be doubted that so far as the petitioner is concerned the only building which will fall out of the exemption limit will be House No. 8, Street No. 3, Ushaganj, Indore, in which the petitioner resides. The other two houses of the petitioner falling within the exemption limit will not be liable to any tax under this Act.
(5.) The contention of the learned counsel for the petitioner is that for the purposes of assessment of tax on the house in Ushaganj, Indore, the petitioner will be entitled to exemption upto an amount of Rs. 3,000 out of the total letting value of this house and after deducting Rs. 3,000 from the annual letting value, the balance alone can be considered for the purposes of assessment of the tax. This contention cannot be accepted, as it is clear from the scheme of the Act and from the language of clause (h) of section 6 that if a building is such that its annual letting value falls within the limit prescribed in the clause then such a building would be exempt from tax under the Act. This goes to show that a building whose annual letting value falls beyond the limit of exemption, will be taxed. It is also clear that the scheme of the Act does not provide for any deduction of the exemption limit out of the annual letting value. The scheme of the Act contemplates tax on building itself, and consequently such a method of assessment is foreign to the scheme of the Act. The contention raised by the learned counsel for the petitioner cannot therefore, be accepted.
(6.) The assessment order dated the 17th December 1964 indicates that assessment of the annual letting value was finalized by the Corporation authorities on 17th December 1964. As is alleged, the house was reconstructed and thereafter this was reassessed. This order, which is Ex. P. R / l filed with the return, shows that the Corporation authorities have stated therein that the order shall be effective from 1st December 1963. The order itself indicates that after affording opportunities to the petitioner for raising objections, the annual Jetting value was finalised. In section 2, the word year has been defined to mean financial year. Consequently this letting value could be treated as basis for assessment of tax for the financial year commencing next after this order of assessment of letting value was passed, and that will be from 1st April 1965 and not from 1st April 1964 as has been done by the assessing authorities. Learned Government Advocate for the State contended that as this order of assessment by the Corporation authorities states that it shall be effective from 1st December 1963, the tax levied from 1st April 1964 on that basis could be justified, as the assessment was reopened for the year from 1st April 1964 to 31st March 1965 and at the stage of this reopening this order of assessment was available. It cannot be doubted that for the purposes of tax under the Act the basis will be the annual letting value as assessed by the Corporation. Section 5 of the Act provided as under-
"5. The annual letting value of a land or building shall for the purposes of this Act be deemed to be an amount equal to :- Where the annual value or the annual letting value of the land or building has already been determined prior to 1st April 1970 under the law relating to local authority: and It cannot, therefore, be doubted that as in December 1964 the Corporation assessed the annual letting value of this building, it would be made the basis for assessment of the tax under the Act. But apparently as this tax is assessed in every financial year, the assessment in the present case could only be used for the financial year commencing from 1st April 1964. The order of the Corporation Authorities about giving effect to this assessment from 1st December 1963 can only be considered under the M. P. Municipal Corporation Act if it is so permissible. But so far as the present act is concerned, it is not in dispute that assessment by the Corporation authorities was for the first time, after reconstruction of the building, finalised in December 1964 and therefore tax on the basis of this assessment of annual letting value could only be collected for the financial year commencing from 1st April 1965.
(7.) In the light of the discussion above, this petition is allowed. The order dated the 28th April 1970 passed by the Deputy Property Tax Commissioner, Madhya Pradesh, Gwalior, is quashed as also the orders passed by the taxing authorities assessing the petitioner in the manner alleged. The property tax authorities are free to reconsider the whole matter in the light of the observations made by us in this order on the questions raised in this petition. In the circumstances of the case, the parties shall bear their own costs of this petition. The outstanding amount of security deposit shall be refunded to the petitioner. Petition allowed.
Advocates List
For the Appearing Parties R.G. Waghmare, S.S. Sharma, Advocates.
For Petitioner
- Shekhar Naphade
- Mahesh Agrawal
- Tarun Dua
For Respondent
- S. Vani
- B. Sunita Rao
- Sushil Kumar Pathak
Bench List
HON'BLE CHIEF JUSTICE MR. P.K. TARE
HON'BLE MR. JUSTICE G.L. OZA
Eq Citation
1973 JLJ 967
1973 MPLJ 918
LQ/MPHC/1973/57
HeadNote
- Madhya Pradesh Nagariya Sthawar Sampatti Kar Adhiniyam, 1964 (MP Act 14 of 1964) - Section 6 - Exemption from tax - Buildings and lands in actual occupation of the owners thereof when the annual letting value of such buildings and lands or part thereof does not exceed Eighteen hundred rupees. - The exemption granted in clause (h) is for a building or land independently. - Each building in possession of the owner will have to be independently considered for the purposes of exemption under clause (h). - The scheme of the Act does not provide for any deduction of the exemption limit out of the annual letting value. - The annual letting value of a land or building shall be deemed to be an amount equal to the annual value or the annual letting value determined prior to April 1, 1970, under the law relating to local authority. - Tax on the basis of the assessment of annual letting value could only be collected for the financial year commencing from April 1, 1965.