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PETITIONER: MUNICIPAL CORPORATION OF GREATERBOMBAY AND ANR.

       Vs.

RESPONDENT: INDIAN OIL CORPORATION LTD.

DATE OF JUDGMENT27/11/1990

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. RANGNATHAN, S.

CITATION:  1991 AIR  686            1990 SCR  Supl. (3) 365  1991 SCC  Supl.  (2)  18 JT 1990 (4)   533  1990 SCALE  (2)1140  CITATOR INFO :  RF         1992 SC1782  (10)

ACT:     Bombay  Municipal Corporation Act, 1888--Sections  3(r), 3(s), 143 and 154  Petroleum storage tank--Whether building, structure, or land---Exigible to property tax. Words and Phrases--’Land’, ’building’--Meaning of.

HEADNOTE:     The  respondent-Oil Corporation took a piece of land  on lease from the Bombay Port Trust for 30 years from  February 1961  and  put up six oil tanks for storage  of  petrol  and petroleum  products, apart from other structures and  build- ings.     For the year 1964-65 the appellant-Municipal Corporation fixed  a sum as the rateable value of the  installations  on the demised property consisting of the buildings, structures and  tanks. The Investigating officer, on objections  raised by the respondent, reduced the rateable value. the  rateable value of the tanks being fixed on the basis of the  capacity of each of the tanks.     On appeal to the Court of Small Causes as against  rate- able  value of the tanks, the Additional Chief  Judge  found that  the  tanks  fell within the definition  of  ’land’  or ’building’ in Section 3(r) and 3(s) of the Bombay  Municipal Corporation  Act, 1888 and are liable to property tax  under the Act. Accordingly, the rateable value of the tanks  fixed by the Corporation was upheld.     On  further  appeal, the High Court allowed  the  appeal holding that the tanks are neither structure nor a  building nor land under the Act.     In the appeal to this Court by the Municipal Corporation the  question  was whether the storage  tanks  of  petroleum products  are "lands" within the meaning of section 3(r)  or "buildings"  as  defined under section 3(s)  of  the  Bombay Municipal Corporation Act, 1888 and are exigible to property tax. 366 Allowing the appeal, this Court,     HELD:  1. The expression ’building’ includes the  fabric of  which  it is composed, the ground upon which  its  walls

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stand  and the ground within those walls because the  ground would  not have a separate existence, apart from the  build- ing. [371G-H]     A tank to be a building must be a structure designed for ï7 3 of inanimate objects in storehouse or stable for horses shed or  a  hut etc. within the four corners of the  wails  built with masonary or otherwise with ingress or egress. [372A-B]     The word, ’building’ must be given its ordinary  natural meaning ascribable to it including the fabric and the ground on  which  it  stands. On a mere look at  the  tank,  by  no stretch  of imagination, it could be said to be a  building. [372A-B]     The  definition of the word, ’building’ is an  inclusive definition  bringing  within  its  ambit  house,  out-house, stable, shed, hut and every other such structure, whether of masonary,  bricks, wood, mud, metal or ajay  other  material whatever. [372B-C] The tank does not answer any of the descriptive particulars. [372C]     2.  The house or building, etc. must be  constructed  in accordance with the Master Plan and the Building Regulations conformable    to    the   statutory    requirements    like draInage/Sewage regulations. The construction of the tank is not  required to be within the parameters of  these  regula- tions. Thereby tanks cannot be construed to be a  structure. [372D-E]     The structure must be an entity in itself, although  not necessarily a building in itself, adopted to the  particular purpose  it  serves. In its ordinary sense  a  structure  is something which is constructed by way of being built as is a building.  But method of construction by itself is not  con- clusive.  Structure by itself may not be a building  but  it may  be  analogous to a building, outhouse, shed, hut  or  a stable.  Ship  is like a floating building but it is  nut  a structure. A crane, gentry or a turnable is  a structure but is  not a building. Weighing bridge is a structure.  Tilting furnaces mains are in the nature of structure. [378E-F]     3.  The  definition of ’land’ also is  of  an  inclusive definition.  Its  accompaniments are land,  which  is  being built upon or is built upon or 367 covered  with water; benefits to arise out of  land;  things attached  to the earth or permanently fastened  to  anything attached  to  the earth and rights  created  by  legislative enactment over any street. [378H-379B]     4.  If the tanks are situated within a plant they  would be integral parts of the plant and get exempted from assess- ment  under section 154 of the Act, but there exist no  such ï7 3 adopted consistent not only with the principles of  taxation to make rateable value but also those relating to incometax, wealth-tax etc. [380G-H]     5. The tanks, though, are resting on earth on their  own weight  without being fixed with nuts and bolts,  they  have permanently been erected without being shifted from place to place. Permanency is the test. The chattel whether is  mova- ble  to another place of use in the same position or  liable to  be dismantled and re-erected at the later place? If  the answer  is yes to the former it must be a moveable  property and  thereby it must be held that it is not attached to  the earth. If the answer is yes to the latter it is attached  to the earth. [382D-E]    6. The petroleum products are being stored through  pipes and  are  taken out by mechanical process.  The  operational

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mechanisation  also though relevant, is not conclusive.  The rateable is based on the rent, which the building or land is capable  to fetch. Due to erection of the tanks whether  the value  of  the demised property had appreciated or  not,  is also  yet another consideration. When the tanks are  erected and  used for commercial purposes, the value of the  demised property would get appreciated. The annual letting value  is capable  of  increase. However, the rate of  increase  is  a question of fact but the fact remains that the value of  the land  gets  increased by virtue of erection of  the  storage tanks. Considering from this perspective it is held that the petroleum storage tanks are structures or things attached to the land within the definition of Sections 3(s) and 3(r)  of the  Act. Thereby they are exigible to property tax.  [382G- 383H]     D.C.  Gouse & Co. etc. v. State of Kerala &  Anr.  etc., [1980]  1  S.C.R. 804; C.I.T. Andhra Pradesh  v.  Taj  Mahal Hotel, Secundrabad, [1972] 1 S.C.R. 168; S.P. Jain v. Krish- na  Mohan Gupta & Ors., [1987] 1 SCC 191; S.P.  Gupta,  etc. etc.  v.  Union  of India & Ors. etc.  etc.,  [1981]  Suppl. S.C.C.  87; Cardiff Rating Authority and Cardiff  Assessment Committee  v.  Guest Keen Baldwin’s Iron and  Steel  Company Ltd.,  [1949]  1  Kings Bench Division  385;  B.P.  Refinery (Kent) Ltd. v. Walker (Valuation Officer,), [1957] 2 Queen’s Bench Division 305; Shell- 368 Max (B.P. Ltd.) v. Childs (Valuation Officer), [1962] 9 Ryde Rating  Cases 182 (C.A.); Shell Max & B.P. Ltd. v.  Holvoak, [1958]  1 Weekly Law Reporter 331; Shell-Max &  B.P.Ltd.  v. Holyoak  (valuation officer), [1959] 1 Weekly  Law  Reporter 188, referred to.     New Manek Chowk Spinning and Weaving Mills Co. Ltd.  and ï7 3 Ors.,  [1967] 2 S.C.R. 679; K.N. Subramaniam  Chettiar  v.M. Chidambaram  Servai,  [1940] Mad. 527;  Perumal  Naicker  v. Ramaswamy Kone and Anr., [1969] Mad. 346; Chaturbhuj Morarji v.  Thomas  J. Bannet & Ors., [1905] 29 ILR BOM. 323;  J  H. Sinha v. Govindrao. Bhiwaji & Ors., A.I.R. 1953 Nagpur  224, distinguished.     Blacks Law Dictionary, Fifth Edition; Webster Comprehen- sive  Dictionary, International Edition;  Stroud’s  Judicial Dictionary,  Fourth  Edition;  Oxford  English   Dictionary; Rating  Valuation Practice by Bean and Lockwood, Fifth  Edi- tion-Referred to.

JUDGMENT: