Case: The Century Spg. &amp; Mfg. Co. Ltd Vs. District Municipality Of Ulhasnagar

as Rule 3 (9) provides in express terms that only the words and expressions other than those defined in Rule 3 shall be deemed to be used in the Rules in the same sense in which they are used in the Act.Rule 3 (7) therefore expressly excludes the definition of the building given in the Act by providing a special definition of a building or a house in Rule 3 (7). It is clear therefore that the word "building or "house" must bear the meaning given to it by this Rule and not the meaning given to it by the Act. It follows that as by virtue of Rule 1 (ii) these rules extend to buildings or houses or shops or huts (jhupras) only and a building or a house under Rule 3 (7) means a building, house, shop, hut (jhopras) etc., with a roof thereon constructed for human habitation or otherwise, open lands obviously are not only not included in the term building or "house" but the Rules do not extend to such open lands.14. In his assessment order dated March 6, 1964 passed against the Century Mills the assessing officers justified the inclusion of the open lands in serving as follows :-"The Superintendent (of the appellant Company) states that the Municipality has decided to levy tax on the buildings or shops only and that there is no resolution, rule or bye-laws for the levy of house tax on land. Apparently the Superintendents contention seems to be correct. But on deeper consideration it will be seen that the words "whatsoever form the property" have a significance and the same can include lands also. According to the District Municipal Act of 1901, building includes, "any hut, shed or other enclosure whether used as human dwelling or otherwise" and also "walls, verandah, fixed platforms, plinths door-steps and the like". Now the Century Rayon Factory is bounded by a compound wall in which all the open space lies. Whole enclosure can therefore be held as enclosure and is therefore liable for rating. On the whole, the Act and the Rules have empowered the Municipality for the assessment on the open space."15. In our view, the assessing officer was clearly wrong, for, what he did was to apply the definition of a building as given in Section 3 of the Act instead of the definition in Rule 3 (7). That he was not right in doing as Rule 3 (9) excludes the application of that definition. He was bound by the definition of building in Rule 3 (7) and in view of Rule 1 (ii) he could base his assessment only on the annual letting value of a building as provided by Schedule 1 and not the open lands.He was also not entitled to rely upon the words "whatsoever form any property" in Rule 1 (ii) as those words go with the previous words "buildings or houses or shops or huts" and do not include open lands to mean buildings or houses. The reasoning of the High Court regarding the objection to the conclusion of the open lands in the assessment also does not appear to be correct.Though the High Court on a consideration of the Rules held that the Municipality was not authorised to levy the rate on open lands it observed that if an open land formed an adjunct of the factory building it would constitute an amenity, that in that event a hypothetical tenant would pay a higher rent taking such an amenity into consideration, that the assessing authority would be entitled in such a case to take into account such an additional amenity, that there could be no objection, if he did so and that to decide whether the assessing officer had valued the open land as an adjunct to the factory building or separately as open land evidence would have to be led and scrutinised and therefore it would not be possible to decide such a question in a writ petition.. With respect, it is not possible to agree with the High Court on this part of its judgment, firstly, because the open lands have been separately valued and secondly because the assessing officer in his said order has in clear terms repelled the appellants objection to his taxing the open lands by relying on the definition of building in Section 3 of the Act as including open lands when bounded by compound walls and not on the ground that they formed an adjunct of the factory buildings and were an amenity or additional advantage which a hypothetical tenant would take into account when offering rent.In our view the assessing officer was not entitled to include the open lands while rating the factory building of the appellant companies as such inclusion was ultra vires the Rules and therefore invalid.16. So far as the rest of the contentions are concerned they can be dealt with, in our view, more properly by the appellate tribunal before whom the appeals by the appellant companies are at present pending rather than in these appeals. We therefore do not propose to go into those questions, especially as it is agreed by Counsel for the Municipality (1) that the Municipality will not take any objection to these questions being canvassed in those appeals on the ground that any one or more of them were not taken by the appellants in their objections to the assessment list and (2) that it will not also take any objection to the appeal by the Century Mills having been filed beyond the time prescribed therefor. Before the High Court the Municipality had in fact undertaken that it will not insist that the appellants should confine their objections in their appeals only to the grounds urged in their objections to the assessment list under S. 65 of the Act. The appellant Companies would therefore be entitled to urge that the valuation made by the assessing officer is erroneous or bad on any ground available to them under the Act.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]After considering the objections as required by the Act the Government by a further notification dated September 20, 1960 declared the said local area of which the same boundaries were set out in the Schedule thereto to be a permanent municipal district. It is true that in constituting the municipal district of Ulhasnagar the Government included parts of villages enumerated in the saidwhile constituting a municipal district the Government, when it is expedient so to do, can join to an existing village or suburb the land adjoining thereto. Similarly Section 4 empowers the Government to extend, contract or otherwise alter from time to time the existing limits of a municipal district or declare any local area to be a municipal district. There is nothing either in Section 4 or Section 7 to limit the power of the Government in constituting a municipal district to include therein the whole of the village or suburb as contended. The Act, on the other hand, permits the Government to include "land adjoining thereto" which shows that a part of the land adjoining to an existing village or a suburb can also be added if it is thought expedient so to do. Likewise while altering the limits of an existing municipal district it can exclude from or include in it part of the land where it becomes necessary or expedient to do. That being so, it is impossible to say that by taking parts of the villages set out in the Schedules to the two notifications the Government formed a municipal district contrary to the provisions of Sections 4 or 7 or that the constitution by it of the municipal district of Ulhasnagar was in any way contrary to or ultra vires the twoMunicipality therefore has complied with the procedure required by the Act before a tax is imposed by selecting the tax, by laying down the class of property which it desires to make liable, the amount of the rate at which such property would be liable and lastly the basis of valuation for purposes of the rate on buildings and houses.We are unable therefore to accept the contention that the basis of valuation is the method of valuation of annual value or with the contention of Mr. Desai for the companies in other appeals that the Rules not only have to specify the classification of properties which are sought to be taxed but also the method of valuation for each class viz., the rental basis, cost or capital value or the profits basis. The fallacy in the contention lies in mixing up the method with the basis of valuation. The basis as provided in the Rules is the annual value which can be ascertained or arrived at by any one or more of the recognised methods.9. Though we are not able to accede to these contentions we think the appellants are on a surer ground in their third contention viz., that the said house tax bills were not in accordance with the Rules to the extent that they sought to assess the open lands.