Rastogi, J. - (1.) GEEP Flashlight Industries Ltd., Allahabad, which has now been changed to GEEP Industrial Syndicate Ltd., is a public limited company incorporated under the Indian Companies Act, 1913. It is engaged in the business of manufacture and sale of torches and dry cell batteries. Its factory and administrative offices are situated in the premises No. 28, South Road, Allahabad. The lease of this property expired on 31st of December, 1967. For the quinquennium 1960-65 the Nagar Mahapalika, Allahabad, had estimated the annual value of this property at Rs. 23,531. For the next quinquennium 3965-70 it was determined at Rs. 28,500, which was later raised to Rs. 28,550, on account of some further additions to the buildings. For the next quinquennium 1970-75 the Nagar Mahapalika proposed to determine the annual value of the disputed property at Rs. 95,989 and a notice was issued to the petitioner-company in this behalf. The petitioner-company filed objections to the proposal under Section 209(1) of the Nagar Mahapalika Adhiniyam, 1959, hereinafter referred to as "the Adhiniyam". The executive committee of the Nagar Mahapalika overruled those objections and, by its order dated February 25, 1972, determined the total value of the disputed buildings as on the relevant date at Rs. 21,97,000 and its annual value at Rs. 95,989.
(2.) AGGRIEVED, the petitioner-company filed an appeal under Section 472 of the Adhiniyam which was allowed by the judge, Small Causes Court, Allahabad, by his order dated December 17, 1974, fixing the annual value of the disputed property at Rs. 27,925. From that order the Nagar Mahapalika preferred an appeal which came up for hearing before the presiding officer of the Nagar Mahapalika Tribunal, Allahabad, who by his judgment and order dated June 2, 1975, allowed the appeal and fixed the annual value of the disputed property at Rs. 1,07,735.40. The present writ petition has been filed by the petitioner-company for quashing this decision and for restoring the decision given by the judge, Small Causes Court, Allahabad. A counter-affidavit has been filed on behalf of the respondent, Nagar Mahapalika, Allahabad, and the petitioner has filed a rejoinder affidavit. The first submission made before us on behalf of the petitioner-company was that there was absolutely no basis given by the Addl. District Judge, Allahabad, for determining the annual value of the disputed property at Rs. 1,07,735.40. The. second submission was that the learned Addl. District Judge erred in relying upon the evidence of the junior engineer of the Mahapalika, which had been introduced in the case at the stage of the first appeal. According to the learned counsel, that evidence was inadmissible. Apart from these two contentions it was also urged that even the original proposal to enhance the annual value to Rs. 95,989 did not disclose the basis on which it was founded. The learned counsel for the Mahapalika, on the other hand, controverted these contentions and essentially placed reliance on the reasons given by the Addl. District Judge. Thus, the first question which falls for consideration is as to whether a proper basis was adopted for the determination of the annual value by the assessing authority, and, subsequently, by the appellate authorities, or not.
(3.) SECTION 174 of the Adhiniyam defines "annual value", it reads as under: "174. Definition of 'annual value'.--'Annual value' means- (a) in the case of railway stations, colleges, schools, hostels, factories and other such building, a proportion not below 5 per cent. to be fixed by Rules made in this behalf of the sum obtained by adding the estimated present cost of erecting the building less depreciation at a rate to be fixed by rule, to the estimated value of the land appurtenant thereto, and (b) in the case of a building or land not falling within the provisions of Clause (a) the gross annual rent for which such building, exclusive of furniture or machinery therein, or such land is actually let, or where the building or land is not let or in the opinion of the assessing authority is let for a sum less than its fair letting value, might reasonably be expected to be let from year to year : Provided that where the annual value of any building would, by reason of exceptional circumstances, in the opinion of the Mahapalika, be excessive if calculated in the aforesaid manner, the Mahapalika may fix the annual value at any less amount which appears to it equitable : Provided further that where the Mahapalika so resolves, the annual value in the case of owner-occupied building and land shall, for the purposes of assessment of property taxes, be deemed to be 25 per cent. less than the annual value otherwise determined under this section." Clause (a) of the above definition would be applicable to the building in dispute because it consists of factory and administrative offices of the petitioner-company. The definition of "annual value" given in this section is, in terms, akin to the definition of this expression given in Section 140 of the Municipalities Act, 1916. It will not be out of place to read that definition also. It reads as under : "140. Definition of annual value.--(1) 'Annual value' means,-- (a) In the case of railway stations, hostels, colleges, schools, hospitals, factories, and other such buildings, a proportion not exceeding five per centum, to be fixed by rule made in this behalf, of the sum obtained by adding the estimated present cost of erecting the building to the estimated value of the land appurtenant thereto, and (b) in the case of a building or land falling within the provision of Clause (b), the gross annual rent for which such building, exclusive of furniture or machinery therein, or such land is actually let, or, where the building or land is not let or in the opinion of the board is let for a sum less than its fair letting value, might reasonably be expected to be let from year to year: Provided that where the annual value of any building would, by reason of exceptional circumstances, in the opinion of the board, be excessive if calculated in the aforesaid manner, the board may fix the annual value at any less amount which appears to it equitable." ;