PUNEET CHOPRA Vs. STATE OF HARYANA

JUDGEMENT

(1.) Whether the factory premises leased out with third party, who has set up a factory in those premises are exempt from payment of property tax under Notification dated November 7, 1969 (a copy of which is Annexure P.1, appended to the petition) issued by the State of Haryana in exercise of powers conferred by sub-section (2) of Section 4 of the Punjab Urban Immovable Property Tax Act (hereinafter referred to as 'the Act') is the question that falls for determination in this writ petition.

(2.) The facts lie in a narrow compass and the parties are not at issue on them. The petitioners are owners of property, described as Unit No. B.V-A/279 (Plot No. 66, Sector 6), Faridabad (Haryana). The petitioners leased out the Industrial shed constructed on the plot in question on June 5, 1975, to Messrs Clutch Auto Private Limited, Faridabad, for setting up a factory. The lessee set up the machinery and plant and went into production shortly thereafter.

(3.) The State of Haryana, in exercise of powers conferred upon it by sub-section (2) of Section 4 of the Act, issued a notification dated November 7, 1969, exempting from payment of property tax the buildings or sub-units thereof, wherein new factories are set up and such factories go into production on or after the Ist day of April, 1969, for a period of five years from the date the factory goes into production. However, it was provided in the notification that the buildings mentioned in the Schedule to the notification were not eligible for exemption. The Assessing Authority, respondent No. 3, issued a notice on April 30, 1976, to the petitioners under Section 9 of the Act, intimating them that their property unit was proposed to be assessed at Rs. 40,000/- with effect from April 1, 1975. If they had any objections, they should file the same within 14 days. In this notice, the property unit of the petitioners is described as 'factory'. The petitioners filed objections claiming that Messrs Clutch Auto Private Limited, Faridabad, had set up a factory on their property unit in the middle of 1973, and in view of the exemption granted to factories by Notification (Annexure P.1) their property-unit was not exigible to tax. However, the Excise and Taxation Commissioner, Haryana, respondent No. 2, rejected the objections vide order dated September 4, 1978, on the ground that since a part of the Industrial property had been let out no benefit of exemption under Notification P.1 could be given to the property in question. Aggrieved, the petitioners have filed the present writ petition.