Case Note & Summary
The petitioner, Municipal Corporation of the City of Pune, filed a writ petition challenging the judgments of the Small Causes Court, Pune, dated 12.4.1988 in Municipal Appeal No. 70 of 1987 and the 6th Additional District Judge, Pune, dated 16.4.1990 in Civil Appeal No. 490 of 1988. The respondent, The United Western Co-operative Housing Society Ltd., had constructed a community hall on plot no.3 in Survey No. 42/43, Maharshi Karvenagar, Pune, for fostering indoor games and community activities for its members, charging nominal fees. Additionally, the society constructed five shops on the ground floor and let them out at a monthly rent of Rs.250/-. The Municipal Corporation assessed both the community hall and the shops to property tax under the Bombay Provincial Municipal Corporations Act, 1949. The respondent society challenged the assessment, and the Small Causes Court held that the community hall was not liable to tax as it was not used for commercial purposes, but upheld the assessment on the shops. The District Judge in appeal affirmed that decision. The Municipal Corporation then filed the present writ petition. The High Court considered the definition of 'building' under Section 3(5) of the Act and the provisions for determination of rateable value under Sections 127, 129, 132, and 140. The court held that the community hall is a building capable of being let and is used for purposes of profit, as nominal fees are charged. The court further held that the shops are clearly let out and generate income. Therefore, both are liable to property tax. The court set aside the orders of the lower courts and restored the assessment made by the Municipal Corporation. The writ petition was allowed with no order as to costs.
Headnote
A) Property Tax - Rateable Value - Community Hall - Sections 127, 129, 132, 140 of the Bombay Provincial Municipal Corporations Act, 1949 - The respondent society constructed a community hall for fostering indoor games and community activities for its members, charging nominal fees. The Municipal Corporation assessed the hall to property tax. The Small Causes Court and District Judge held that the hall was not liable to tax as it was not used for commercial purposes. The High Court reversed, holding that the hall is a building capable of being let and is used for purposes of profit, hence liable to tax. The court relied on the definition of 'building' under Section 3(5) and the principle that any building capable of being let is rateable. (Paras 1-6) B) Property Tax - Rateable Value - Shops Let Out - Sections 127, 129, 132, 140 of the Bombay Provincial Municipal Corporations Act, 1949 - The respondent society constructed five shops on the ground floor and let them out at a monthly rent of Rs.250/-. The Municipal Corporation assessed the shops to property tax. The lower courts upheld the assessment. The High Court affirmed, holding that the shops are clearly let out and generate income, and are therefore liable to property tax. (Paras 1-6) C) Property Tax - Rateable Value - Determination - Sections 127, 129, 132, 140 of the Bombay Provincial Municipal Corporations Act, 1949 - The court held that the rateable value of a building is to be determined based on the rent at which it might reasonably be expected to be let from year to year. The fact that the community hall is used for members' activities and not for commercial purposes does not exempt it from tax if it is capable of being let. The court set aside the orders of the lower courts and restored the assessment made by the Municipal Corporation. (Paras 1-6)
Issue of Consideration
Whether the community hall constructed by a co-operative housing society for the benefit of its members and the shops let out on rent are liable to property tax under the Bombay Provincial Municipal Corporations Act, 1949.
Final Decision
The High Court allowed the writ petition, set aside the judgments of the Small Causes Court and the District Judge, and restored the assessment of property tax made by the Municipal Corporation on the community hall and shops. No order as to costs.
Law Points
- Property tax
- rateable value
- community hall
- co-operative housing society
- Bombay Provincial Municipal Corporations Act
- 1949
- Sections 127
- 129
- 132
- 140
