MADRAS AND SOUTHERN MAHRATTA RAILWAY Vs. BEZWADA MUNICIPALITY

JUDGEMENT

(1.) THE appellants, the Madras and Southern Mahratta Railway Company, Limited, own certain vacant lands within the Municipality of Bezwada. THEse lands are admittedly subject to the property tax which the respondents, the Bezwada Municipality, are empowered to levy. THE question for decision in these consolidated appeals is whether the respondents acted within their statutory powers in ascertaining the annual value of the lands for the purpose of imposing the tax.

(2.) THE method which the respondents adopted in order to arrive at the annual value of the lands was first to ascertain their capital value, which they did by reckoning them at so much per square yard, and they then took six per cent of the capital value as representing the annual value. On the annual value; so calculated they imposed property tax at the rate of sixteen and a half per cent, per annum. THE appellants under protest paid the assessments made upon them in each of the four financial years ending on March 31, 1932, 1933, 1934 and 1935. THEy now seek to have these payments refunded as having been illegally exacted. In this they have been unsuccessful in both the Courts in India.

(3.) SECTIONS 81 and 82 deal with the levying and assessment of property tax and the argument turned upon the interpretation of these sections. So far as material to the present question they read as follows : Section 81 (1). If the council by a resolution determines that a property tax shall be levied, such tax shall be levied on all buildings and lands within municipal limits save those exempted by or under this Act or any other law. The property tax may comprise (a) a tax for general purposes; (b) a water and drainage tax. * * * * (2) Save as otherwise provided in this Act, these taxes shall be levied at such percentages of the annual value of lands or buildings or both as may to fixed by the Municipal Council, subject to the provisions of section 78. (3) The Municipal Council may, in the case of lands which are not used exclusively for agricultural purposes and are not occupied by, or adjacent and appurtenant to, buildings, levy these taxes at such percentages of the capital value of such lands or at such rates with reference to the extent of such lands, as it may fix: Provided that such percentages or rates shall not exceed the maxima, if any, fixed by the Local Government, and that the capital value of such lands shall be determined in such manner as may be prescribed. (4)(a) The Municipal Council may, in the case of lands used exclusively for agricultural purposes, levy these taxes at such proportions as it may fix of the annual value of such lands as calculated in accordance with the provisions of section 79 of the Madras Local Boards Act, 1920. * * * * Section 82 (1). Every building shall be assessed together with its site and other adjacent premises occupied as an appurtenance thereto unless the owner of the building is a different person from the owner of such site or premises. (2) The annual value of lands and buildings shall be deemed to be the gross annual rent at which they may reasonably be expected to let from month to month or from year to year less a deduction, in the case of buildings only, of ten per centum of such annual rent and the said deduction shall be in lieu of all allowance for repairs or on any other account whatever : Provided that (a) in the case of (i) any Government or railway building or (ii) any building of a class not ordinarily let the gross annual rent of which cannot, in the opinion of the executive authority, be estimated, the annual value of the premises shall be deemed to be six per cent, of the total of the estimated value of the land and the estimated present cost of erecting the building after deducting for depreciation a reasonable amount which shall in no case be less than ten per centum of such cost: * * * *