VIDYA PARKASH Vs. MUNICIPAL COMMITTEE, SIMLA AND ANOTHER

JUDGEMENT

(1.) The sole question for decision in this petition is whether the building of petitioner at Simla which is in existence from before the year 1938 but with respect to which no fair rent has been fixed under Section 4 of the East Punjab Urban Rent Restriction Act, 1949, is to be assessed by respondent No. 1, Municipal Committee, Simla, to a tax payable by the owner on building on the annual value as ascertained according to the definition in Section 3(1)(b) of the Punjab Municipal Act, 1911 or as restricted by the definition of fair rent enacted in Section 4 of the East Punjab Urban Rent Restriction Act, 1949.

(2.) We may, therefore, read the relevant portions of Section 3(1)(b) of the Punjab Municipal Act, 1911 and of Section 4 of the East Punjab Urban Rent Restriction Act, 1949 which are as follows :-

(3.) The key words in the definition of the "annual value" of the building are "the gross annual rent at which such building...............may reasonably be expected to let from year to year". In short the basis of the annual value is the reasonable letting value of the building. This concept of reasonable letting value has always been the standard basis of assessing the annual value of building for imposing taxes on building. Its meaning has, therefore, been considered in the past numerous occasions. They key words of the definition of "annual value" in Section 127(a) of the Calcutta Municipal Act, 1923 were precisely the same as those in Section 3(1)(b) of the Punjab Municipal Act, 1911. They were construed by the Supreme Court in the Corporation of Calcutta v. Smt. Padma Debi and others, in paras 5 and 6 as follows by Subha Rao, J. (as he then was) speaking for the Court :-