PUNE CANTONMENT BOARD Vs. BHARAT FORGE COMPANY LIMITED

JUDGEMENT

(1.) THIS petition under Articles 226 and 227 of the Constitution of India by the Pune Cantonment Board and its Executive Officer is directed against the judgment and order dated 21st October 1986 passed by the District Judge, Pune in Civil Appeal No. 400 of 1984. Briefly the facts are that the respondents are a company incorporated under the Companies Act, 1956. The respondents are having business premises within the cantonment area of Pune. The buildings of the respondents are assessed and taxed on their annual value in accordance with the provisions contained in Chapter V of the Cantonment Act, 1924 ("act" for short ). It appears that after 1st April, 1980 the respondents constructed certain additional buildings. By their letters dated 5th September, 1981 and 11th December, 1981, the respondents informed the Cantonment Board of the dates when construction of various buildings were completed. The Cantonment Board by its letter dated 22nd January, 1982 demanded information about the cost of construction of the new buildings. However, as there was no reply from the respondents to the said letter, the Cantonment Executive Officer sent to the respondents a notice dated 1st March 1983 under section 71 of the Act for amendment of the assessment list whereby the respondents were informed that the Cantonment Board proposed to amend the assessment list in respect of the respondents property in view of the additional new constructions so as to assess the value of the property at Rs. 21,89,061/- with effect from 1st April, 1982. However it seems that necessary information regarding the cost of the construction was furnished by the respondents to the Board under their letters dated 29th March, 1983, 18th April, 1983 and 27th April, 1983. Even thereafter some correspondence ensued between the parties as the Cantonment Board felt that the respondents had not furnished the exact dates of completion of construction. It is not necessary to dilate any more on this controversy since it is an admitted position that the dates of completion of construction were duly supplied to the Board. The Cantonment Executive Officer thereafter sent a fresh notice dated 3rd June, 1983 to the respondents under section 71 of the Cantonment Act for amendment of the assessment list stating that the Cantonment Board had proposed to increase the annual letting value of the property due to addition of new constructions from Rs. 21,03,121/- to Rs. 22,78,771/- on 1st February 1981 to Rs. 22,95,253/- on 1st April, 1981, to Rs. 23,50,791/- on 15th May, 1981 and to Rs. 25,32,900/- on 1st December, 1981. By the said notice the Cantonment Executive Officer called upon the respondents to submit their objections, if any, to the proposed amendments within one month from the date of the notice and informed the respondents that they would be allowed an opportunity of being heard in support of their objections. The respondents by their letter dated 27th June, 1983 objected to the proposed amendments. The respondents were given personal hearing by the Assessment Committee on 6th February, 1984. After the hearing was given by the Assessment Committee and the assessment was approved, the Cantonment Board raised a bill on the respondents under Bill No. 3870 dated 3rd April, 1984 for Rs. 1,74,400. 85 for the years 1980 to 1984.

(2.) THE validity of the aforesaid bill was challenged by the respondents by filling an appeal under section 84 of the Act before the District Judge, Pune being Civil Appeal No. 400 of 1984. By the impugned judgment and order dated 21st October, 1986, the learned Judge allowed the appeal and quashed the demand of the respondent for the sum of Rs. 1,74,400. 85/- dated 3rd July, 1984. The learned Judge held inter alia that on correct interpretation of section 71 of the Act the Cantonment Board had no right to recover any tax payable due to the amendment of the assessment list for the period prior to the year in which the amendment was made. The correctness of this view is impugned by the Cantonment Board in this petition under Articles 226 and 227.

(3.) WE are concerned in this case with levy of a tax on buildings and lands and the power to impose that tax is granted to the Cantonment Board under section 60 of the Act which provides that the Board may, with the previous sanction of the Central Government, impose in any cantonment any tax which under any enactment for the time being in force, may be imposed in any municipality in the State wherein such cantonment is situated. Section 65 says that save as otherwise expressly provided in the notification imposing the tax, every tax assessed on the annual value of buildings or lands or of both shall be leviable primarily upon the actual occupier of the property upon which the said tax is assessed, if he is the owner of the buildings or lands or holds them on a building or other lease granted by or on behalf of the Government or the Board or on a building lease from any person. While section 65 provides for assessment of the land or buildings on the annual value, the term annual value is defined by section 64 as follows: