PATNA MUNICIPAL CORPORATION Vs. KAILASH BEHARI SINHA

JUDGEMENT

(1.) This appeal under Letters Patent is by the defendant, the Patna Municipal Corporation. The plaintiff is the owner of a cinema house in the town of Patna standing on holding No. 73A-1 which has now been changed to 70, circle No. 9. The land on which the cinema house stands was taken on lease by the plaintiff respondent. The first assessment of municipal tax in respect of the premises was made under Sub-section (2) of Section 98 of the Bihar and Orissa Municipal Act, 1922. The tax levied amounted to Rs. 23/8/- per quarter. There was, however, a revised assessment under Sub-section (1) of Section 98 of the Act and an objection to the same raised by the plaintiff was overruled. The plaintiff brought a suit for a declaration that the order of assessment was illegal and ultra vires of the powers of the municipal authorities. That suit led to Title Appeal No. 32/14 of 1943 and the appellate Court held that the order of assessment was illegal and as such declared it null and void. The third assessment was taken up in 1945 and toe plaintiff was sought to be assessed once more on the basis of assessment under Section 98(1) of the Act, but the plaintiff's objection succeeded before the Assessment Commissioner with power to Hear appeal against the order of assessment. The Assessment Commissioner directed that Clause (2) of Section 98 was the appropriate provision of the Municipal Act under which the premises of the plaintiff, the cinema house, were to be assessed and as such the basis was the cost of construction of the building. The assessment of the building was taken up once again in 1950 and once more notice was Issued to the plaintiff to the effect that the premises were to be assessed on the basis of annual rental value. The annual rental value mentioned in the original notice was Rs. 3600/- but the appellate authority under the Municipal Act raised the annual value to Rs. 6000/- and accordingly a tax of Rs. 427/8/- per quarter was sought to be imposed. The suit giving rise to this appeal was instituted toy the plaintiff for a declaration inter alia that the appropriate provision of law applicable to the assessment of this building was Section 98, Clause (2) and not Section 98, Clause (1), i.e., the assessment was to be made on 74 per cent of the cost of construction and not on annual letting value. The suit of the plaintiff was dismissed by the trial court. On appeal, the learned Additional District Judge of Patna came to a decision in favour of the plaintiff. The defendant, therefore, appealed to this Court which was numbered as Second Appeal 1028 of 1956. By a judgment dated the 4th August, 1959, the learned single Judge upheld the contention of the plaintiff and dismissed the appeal. On leave being asked for under the Letters Patent however, permission wag granted and hence the present appeal.

(2.) The main, question of law which arises for consideration is the interpretation of Section 98 of the Bihar and Orissa Municipal Act (Act VII of 1922). Clauses (1) and (2) of Section 98 of the Act stand as follows:

(3.) Learned counsel for the respondents has, however, contended that even if that were so, the crucial words used in Clause (2) of Section 98 of the Act are not whether the house can have a letting value, but whether the house is said to have been intended for the purpose of letting. Where the owner himself is in occupation and has used the building as a cinema house, the actual words used in this clause cannot be taken to go against the contention of the plaintiff inasmuch as it cannot be said that the house was ever Intended to be used for the purpose of letting. Learned counsel's argument found favour with the District judge and if the words "intended to be used for letting" were to be taken in the sense In which the learned counsel for the respondents asks us to take them then this may lead to an untenable position. For instance, in this view of Clause (2) all the houses lying within the Municipal area would have to be put in two categories, one consisting of houses which are intended for the purpose of letting and the other consisting of houses which are not intended for that purpose. As a matter of fact, practical experience, however, shows that it does not happen frequently. A house, which after construction, has been let out may be resumed by the lessor and intended either for his own purpose as his residence or something else and a house which originally had not beem let out may subsequently happen to be let out. If the contention of learned counsel for the respondents, therefore, were to be accepted, all these anomalies would arise in the assessment of taxes of houses lying within the municipal limits. That can never have been the intention of the legislature. The expression "intended for letting" must, therefore, be taken to refer to houses which have been let out or in respect of which letting value can be ascertained in a reasonable manner. It is only when the letting value is not discoverable, then Section 98(2) would come into play and in that case where the cost of construction can be ascertained, the assessing authorities will have to take the costs of construction into account for the purpose of proper valuation of the building.