NAVYUG INDUSTRIES Vs. STATE OF GUJARAT
LAWS(GJH)-1979-11-7
HIGH COURT OF GUJARAT
Decided on November 06,1979

NAVYUG INDUSTRIES Appellant
VERSUS
STATE Respondents

JUDGEMENT

N.H.BHATT - (1.) * * * *
(2.) The controversy for the period subsequent to 11-3-72 arises in the following manner. The panchayat had already valued the properties for the purpose of levying house tax. Panchayat had adopted capital value as the basis. The education cess is to be charged on the basis of annual letting value. The annual letting value as defined in clause (i) of sec. 2 of the Act (Gujarat Education Cess Act 1962 provides a mode of converting capital value into annual letting value for the purpose of levying education cess. The panchayat by following the proper procedure assessed the properties on the basis of capital value. Is it open to the Collector then to insist on his own assessment of annual letting value ? The fate of this petition hangs on the reply to this question one way or the other. According to Mr. Hathi for the petitioners the moment a valid assessment is prepared by the local authority concerned the State Governments power to act under proviso to sec. 15(1) is taken away. The words that were pressed into service in support of that submission are for the time being. To me also it appears clear that the State Governments power to direct the Collector to collect the tax is confined only to two contingencies provided for in that proviso namely (1) the local authority is not for the time being levying a property tax; and (2) where a local authority has made a default in the collection of the tax or payment thereof to the State Government. In no other case the State Governments power to direct the Collector to collect the tax is there. Bantva admittedly is an urban area and under sec 15(1) (b) Bantva nagar panchayat alone is competent to collect the education cess and ultimately transmit it to the State Government. The State Governments power to direct and the force of the said direction are operative only as long as the urban authority for the Relevant time does not levy the property tax or the local authority commits default in the collection of the tax and its payment thereof to the State Govt. It is nobodys case that Bantva Nagar panchayat had made a default in the collection of the tax or payment thereof and as held by me above the first situation is no longer existing since 1-4-72 because the local authority is levying properly tax since 1-4-72. It is therefore evident that since 1-4-72 the power to collect tax under sec. 12 is only of Bantva Nagar Panchayat and of the Collector acting through the Mamlatdar. Even under sec. 12(1) education cess is to be levied and collected as a tax on lands and buildings on the basis of annual letting value and the annual letting value is the ratable value or annual letting value as determined in accordance with the relevant local authority law. So for the purpose of working out the annual letting value for the Purpose of levying and collecting education cess annual letting value is to be worked out on the basis of the ratable value of the lands and buildings as determined in accordance with the provisions of the Gujarat Panchayats Act.
(3.) The grievance of the petitioners in this petition as elaborated in paragraph ll. of the petition is that the Collector and the Mamlatdar insist on their letting value despite there being a mode available to work out annual letting value in terms of sec. 2(1) of the Act. The annual letting value in all the cases to be the rateable value or annual letting value or gross annual letting value of lands and buildings and in a case where the property tax is assessed on any building or land on its capital value such percentage of the capital value as may be determined by the State Government at is to be the annual letting value. On and from 1 the annual letting value in the case of the properties situated within the limits of Bantva Nagar Panchayat will be the one based on the percentage of capital value on the basis of which property tax is assessed by the concerned authority an its capital value. On and from 1-4-72 therefore the basis of annual letting value adopted by the Collector and the Mamlatdar is without any authority of law. It is an arbitrary letting value reached by the Collector and the Mamlatdar in the face of the proviso appended to the definition of the word annual letting value in clause (1) of sec. 2 of the Act.;


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