G.S. Singhvi, J. - (1.) The order dated 7.7.1980 passed by the Deputy Commissioner, Hoshiarpur, under Ss. 84 and 85 of the Punjab Municipal Act, 1911 has been challenged by the Municipal Committee, Hoshiarpur. It has been prayed that the order (Annexure P7) dated 7.7.1980 be quashed with other appropriate relief.
(2.) The Municipal Committee, Hoshiarpur is a creature of the Punjab Municipal Act, 1911. Vide notification dated 4.9.1979 issued by the Punjab Government, the existing limits of the town of Hoshiarpur were extended and the premises of M/S Mahavir Spinning Mills Ltd., Phagwara Road, Hoshiarpur, were brought within the limits of the Municipality. The Executive Officer of the petitioner Municipal Committee wrote to respondent No. 2 on 10.8.1979 seeking information regarding the constructions of buildings and the particulars of the land belonging to respondent No. 2. This was done in order to assess respondent No. 2 for House Tax. After giving hearing to respondent No. 2 the petitioner issued a notice dated 30.1.1980 Under Sec. 65 of the Punjab Municipal Act, 1911 (for short 'the 1911 Act') and gave opportunity to respondent No. 2 to file objections against the fixation of annual rental value of the building as Rs. 3,07,665/ -. On 24.2.1980 the objections filed by respondent No. 2 were received and after considering the entire matter the petitioner passed order (Annexure P5) dated 10.3.1980 fixing the net annual letting value of the budding as Rs. 3,07,665/ -. Against the order (Annexure P5) dated 10.3.1980 respondent No.2 filed an appeal Under Sec. 24 of the 1911 Act and by the impugned order respondent No. 1 accepted the appeal against the petitioner. The petitioner has questioned the legality of the order passed by respondent No. 1 on the grounds that respondent No. 1 has not applied the relevant provisions of law and has decided the matter on, pure conjectures. In its reply, respondent No2. has supported the order passed by respondent No. 1 by pleading that the order dated 7.7.1980 does not suffer from any legal error.
(3.) Sec. 3(1) of the 1911 Act, as it stood before the amendment of the Punjab Municipal (Amendment) Act, 1994, reads as under:, 3. Definitions - In this Act, unless there is, some thing repugnant in the subject or context, - (1) "Annual value " means - (a) in the case of land, the gross annual rent at which it may reasonably be expected to let from year to year: Provided that in the case of land assessed to land revenue or of which the land -revenue has been wholly or in part released, compounded for, redeemed or assigned, the annual value, shall if, the State Government so direct, be deemed to be double the aggregate of the following amounts, namely: - (i) the amount of the land revenue for the time being assessed on the land, whether such assessment is leviable not; or when the land revenue has been wholly or in part compounded for or redeemed, the amount which, but for such composition, or redemption would have been leviable; and (ii) when the improvement of the land due to canal irrigation has been excluded from account in assessing the land revenue, the amount of owner's rate or water advantage rate, or other rate imposed in respect of such improvement; (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 not exceeding 20 per cent of the gross annual rent as the committee in each particular case may consider a reasonable allowance on account of the furniture let therewith; (ii) a deduction of 10 per cent for the cost of repairs and for all other expenses necessary to maintain the budding in a state to command such gross annual rent. The deduction under Sub -clause shall be calculated on the balance of the gross annual rent after the deduction (if any) under Sub - clause (i); (iii) where land is let with a building, such deduction, not exceeding 20 percent 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 purposes of this clause it is immaterial whether the house or building, and the furniture and the land let for use or enjoyment therewith, are let by the same contract or by, different contracts and if by different contracts, whether such contracts are, made simultaneously or at different times. Explanation II. - The term "gross annual rent" shall not include any tax payable by the owner in respect of which the owner and tenant and 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 estimated 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, excessive, a lower percentage maybe taken.";