MUNICIPAL COUNCIL, THROUGH ITS COMMISSIONER Vs. SREE MEENAKSHI MILLS LIMITED, THROUGH THEIR MANAGING AGENTS, THIAGARAJA CHETTY AND COMPANY

JUDGEMENT

(1.) THE Municipal Council, Madurai, the plaintiff before the Subordinate Judge, Madurai, is the appellant before us. The suits were filed against the defendant Sree Meenakshi Mills Limited, Madurai, for recovery of a sum of Rs. 41,232 -29 representing the property tax which still remained due and payable by the Mills for the first and second half years of 1958 -59, 1959 -60, 1960 -61, 1961 -62, 1962 -63, 1963 -64 and the first half year of 1964 -65. In the plaint it is seen that the municipality has given credit to the taxes paid by the Mills. In the written statement the case of the Mills was that as regards B schedule properties, which are the properties in which the Mills and its precincts are situate, the levy is not based on any reasonable hypothesis, but on the other hand it is the result of caprice and arbitrariness. The other contention of the Mills was that the value of the land in which the factory precincts are situate ought not to be valued at 75 paise per square foot but at the rate of Rs. 100 per cent. which was the value fixed by this Court in an earlier but an ancillary proceeding relating to the period 1946 -1960. They would also state that the valuation of the land was not based on any data perused by the statutory authorities, when they made the assessment and on that ground defended the suit. The Mills also contended that the depreciation over the buildings and its properties are to be calculated at 1 2/3 per cent, which was the rate per cent fixed by this Court in Exhibit B -2 and that not having been done, the assessment is illegal and unsustainable. The further contention of the Mills was that in arriving at the annual value of the properties which are assessable to property tax under the District Municipalities Act, the value of electric installations must be held to fall within the purview of machinery and therefore, ought to be excluded ; but that having been included while arriving at the gross annual value for the purpose of assessment, there is an illegality in it. The last contention of the Mills was that in or about the relevant period when the assessments were made, certain extensions were made in the campus of the Mills whereby two more godowns were constructed on an area which according to the Mills is about 55,000 square feet. The case of the Mills, therefore, is that if any additions to the prevailing or existing annual value is to be made, then such additions should have a bearing or relation to the extended Mills on the area of the site as above, and not to any other larger area belonging to the defendant. To be more specific, prior to the extensions made by the Mills, there were 5.70 acres of agricultural land which formed part of the Mills, but was exclusively used for agricultural purposes. Apparently, the Mills extended their activities by putting up two specific godowns in such lands and the case of the Mills is that it is only that portion of the agricultural land, which was annexed to the Mills for the purpose of serving it better and such extended land being now utilised as godowns could only be the subject -matter of further assessment under the District Municipalities Act and not any other piece or parcel of land in and around it.

(2.) THE learned Subordinate Judge held that as per Exhibit B -2, the judgment of this Court in L. P. A. Nos. 63 and 106 of 1963, the mode of assessment on the A Schedule property (residential houses for the managing director and directors in the campus of the Mill) should be on the capital value basis. As against this finding there is no cross -appeal and, therefore, we are not concerned, in this appeal, with the mode of assessment adopted for the A Schedule property.

(3.) THE learned Subordinate Judge found that the valuation adopted by the Municipality in so far as the B Schedule properties which are the properties in which the mill is situate was not correct and according to him Exhibit B -2 provided a compulsive guideline for the fixation of the annual value of such properties. In this context he fixed the value of the land comprised in schedule B of the plaint at Rs. 100 per cent. Regarding A Schedule properties, though the learned Judge found that they were occupied by the officers working in the Mills and that there were lease deeds evidencing such occupation, yet he would also adopt the same capital method of valuation for purposes of arriving at the annual value of the A Schedule properties as well and ultimately agreed with the Municipality that the capital value method is the correct method of the valuation for purposes of computation of the property tax. He accepted the ratio of depreciation arrived at in Exhibit B -2 and held that a depreciation on the buildings and the other properties of the Mills was to be provided at 1 2/3 per cent. He was of the view that the electrical installations in the factory precincts should be excluded for purposes of arriving at the annual valuation. As a matter of fact, the Municipality's case was that the electrical installations which consisted of electric lights, fans etc., and as set out in Exhibit A -8 are to be treated as installations as they are commercially understood and should be added on to the annual value. This was, however, discountenanced by the learned Subordinate Judge.