- (1.) WHEN earlier this Letters Patent Appeal had come up for hearing before a Division Bench of this Court on 8th February, 1989, it was ordered that this appeal is to be listed after the Fall Bench decision in C. W. P. No. 2175 of 19s6 (Banarsi Dass Mahajan v. State of Punjab and Ors. , (1990-1) 97 P. L. R. 1.), and other connected cases The obvious reasons for the above -mentioned order was that the correctness of the Division Bench judgment of this Court in Lt Col. Micheal A. K. Skinner and Ors. v. Municipal Committee, Hansi, (1969) 71 P. L. R. 205. on which the learned Single Judge had based his judgment in the writ petition, against which the present Letters Patent Appeal has been filed, was under consideration by the Full Bench in Banarsi Dass Mahojan's case (supra), The Full Bench in its judgment in Banarsi Dass Mahajan's case (supra), which is now reported as (1990-1) 97 P. L. R. 1, has overruled Skinner's case (supra ). Even the judgment of the learned Single Judge against which the present Letters Patent Appeal has been filed, has also been noticed by the Fall Bench. In view of the Pull Beach judgment overruling Skirner's case (supra) and in which the judgment of the learned Single Judge against which the present Letters Patent Appeal had been filed has noticed, the only coarse open to as is to allow the Letters Patent Appeal and to set aside the judgment of the learned Single Judge. However, to be air to the learned counsel for the respondent-Municipal Committee, we wish to notice his arguments and give little details of the case.
(2.) THE ticklish controversy which was raised before the learned Single Judge in the writ petition by petitioner-M/s Jagjit Cotton Textile Mills Ltd. , was as to whether 'annual value' of the property of the petitioner Company for the purpose of house tax under the Punjab Municipal Act, 1911, (hereinater called the Act) has to be assessed under Section 3 (1) (b) or Section 3 (1) (c) of the Act.
(3.) THE facts giving rise to the - above-mentioned controversy are that the petitioner has coustructed textile mills and various other constructions such as residential quarters known as 'thapar Colony' for its staff and labourers and others community utility service buildings and loads etc, in a vast area of about 82 Acres within the municipal limits of Phagwara town. On 20th February, 1973, two notices under Section 67 of the Act were served on the petitioner including that its properties Nos. B-LV-48 and 49 were proposed to be taxed at Rs. 16,200/- and Rs. 64,800/- for the year 1972-73. These numbers were allotted to the properties on the basis of their nature, i. e. residential and non-residential The petitioner-company filed objections to these notices besides challenging the validity of the proposed tax. One of the, objections raised was to the effect that the two sets of properties be treated as one as the entire property of She petitioner was one consolidated unit and was thus assess able as one unit. This objection of the petitioner was accepted and the entire 'property was assessed as cue unit. The assessment of the tax was to the tune of Rs, 81,000/- in accordant with clause (c) of sub-section (1) of Section 3 of the Act. Section (3) (l) (b) and Section 3 (l) (c)of the Act may be noticed at this stage, as under : "3. Definitions. In this Act, unless there is something repugnant in the subject or context (1) Annual value means (b) in the case of any house or building, the gross annual rent at which such house or building together with its appurtenances and any furniture that may be let for use or enjoyment therewith, may reasonably be expected to let from year to year, subject to the following deductions : (i) such deduction cot exceeding 20 per cent of the gross. annual rent as she committee in each particular case may consider a reasonable allowance on account of the furniture let there with; (ii) a deduction of 10 per cent for the cost of repairs and for all other expenses necessary to maintain the building in a state of command such gross annual rent. The deduction under this sub- clause shall be calculated of the balance of the gross annual rent after the deduction (if any) under sub clause (i); (iii) where Sand is let with a building, such deduction not exceeding 20 per cent of the gross annual rent, as the committee in each particular case may consider reasonable on account of the actual expenditure, if any, annually incurred by the owner on the upkeep of the land in a state to command such gross annual rent; Explanation I.-For the purpose of this clause it is immaterial whether the house or building, and the furniture and the land let for use or enjoyment there with, are let by the same contract or by different contracts, and if different; contracts, whether such contracts; are made simultaneously or at different times. Explanation II. The terra 'gross annual rent' shall not include any tax payable by the owner in respect of which the owner and tenant have agreed that it shall be paid by the tenant. (c) in the case of any house or building, the gross annual rent of which cannot be determined under clause (b), 5 per cent on the sum obtained by adding, the estimated present cost of erecting the building, less such amount as the committee may deem reasonable to be deducted on account of depreciation (if any) to the animated market value of the site and any land attached to the house or building : Provided that (i) in the calculation of the annual value of any premises no account shall be taken of any machinery thereon; (ii) when a building is occupied by the owner under such exceptional circumstances as to render a valuation at 5 per cent, on the cost of erecting the building, less depreciation, exessive, a lower percentage may be taken. ";