- (1.) By this writ petition the Kanpur Nagar Nigam has challenged the order dated 27-11-1996 passed by the VIII Additional District Judge, Kanpur. The short point involved in this petition is whether the respondent No. 2 is liable to be assessed for payment of tax on the annual letting value of the building under clause (a) or (b) of Section 174 of the U. P. Municipal Corporation Adhiniyam, 1959 (hereinafter referred to as the Adhiniyam).
(2.) The sole contention raised by the counsel appearing for the Nagar Nigam is that the building which has been let out for commercial purposes by the respondent No. 2 to the State Bank of India is taxable under the definition of clause (b)of Section 174 of the Adhiniyam and not under clause (a) of Section 174. According to the counsel, clause (b) is applicable to a case where a building is normally let out and (a) is applicable to a case where the building is seldom let out.
(3.) In support of this contention learned Counsel appearing for the Nagar Nigam refers to a decision of this Court in the case of Godraj Dhanji Shah Gandhi v. Municipal Board (1973 ALJ 476). The said decision was based on the meaning of the word annual value as appearing in Section 140 of the U. P. Municipalities Act and in deciding the said issue the Court held that clause (a) applies to such building which are seldom let out and clause (b) applies to a building which are generally let out. On the above interpretation of Section 140 of the Act the said decision was given. Mr. Agarwal strongly relies on the said decision and stressed that the same principle should apply in the instant case. For understanding the argument of Mr. Agarwal Section 140 of the Municipalities Act as well as Section 174 of the Adhiniyam of 1959 are set out hereunder : "140. (1) 'Annual value' means-(a) in the case of railway stations, hotels, 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 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 Board is let for a sum less than its fair letting value might reasonably be expected to let from year to year." "174. Definition of "annual value" - "Annual value" means-(a) in the case of railway stations, colleges, schools, hostels, factories, commercial buildings and other non-residential buildings, a proportion not below 5 per cent to be fixed by rule 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 rules to be 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, 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 Corporation, be excessive if calculated in the aforesaid manner, the Corporation may fix the annual value at any less amount which appears to it equitable.Provided further that where the Corporation 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.;