http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

PETITIONER: NOTIFIED AREA COMMITTEE NANGAL TOWNSHIP

       Vs.

RESPONDENT: BHAKRA MANAGEMENT BOARD, CHANDIGARH & ORS.

DATE OF JUDGMENT:       04/08/1999

BENCH: D.P.Wadhwa, M.B.Shah

JUDGMENT:

D.P. Wadhwa, J.

     The  question  that falls for consideration  in  these appeals  is if the appellant - Notified Area Committee - was legally  correct  in  assessing the annual value of  row  of quarters  in  one block as a ’building’ for the  purpose  of levying  house  tax  under the Punjab  Municipal  Act,  1911 (’Act’   for   short).    This   question  arises   on   the interpretation of the word ’building’ in the Act.

     ’Building’ is defined under clause (2) of Section 3 of the  Act  to mean "any shop, house, hut, outhouse,  shed  or stable,  whether used for the purpose of human  habilitation or  otherwise  and  whether of masonry, bricks,  wood,  mud, thatch,  metal or any other material whatever and includes a wall and a well".

     The question crops up in the following circumstances.

     Respondent   Board   (Bhakra   Management  Board)   is constituted  by  the Central Government under Section 79  of the  Punjab  Reorganisation  Act, 1966.  The  Board  was  so constituted for administration, maintenance and operation of various  works  as  described in the section.   These  works included Bhakra dam and reservoir and power houses.  For the construction,  maintenance  and  operation   of  the   works entrusted  to the Board under the Punjab Reorganisation Act, the Board constructed number of residential houses at Nangal township  for  providing  residential accommodation  to  its officers,  staff  and workers employed in the power  houses. Residential  accommodation  consisted of different types  of bungalows  and  quarters for the officers and  employees  of different  categories.   Each of the bungalows and  quarters have  separate boundary walls and it is a compact unit  with distinct  and separate house numbers and allotted to each of the  officers and employees of the Board.  Different  blocks have  row  of quarters/ bungalows each adjoining to one  and another  but  with  a  separate identification  mark  and  a complete unit in itself.

     Earlier each of the bungalow/quarter has been assessed to  the  house tax on the basis of annual value  worked  out separately  for  these  bungalows/quarters  as  provided  in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

Section  3 of the Act.  However, the Committee raised annual value  for  purposes  of  house tax  for  the  year  1977-78 treating  the  entire block as one building and  imposed  ad valeram  rate of house tax @ 15% of the annual rental  value in  accordance  with  Section  63  of  the  Act.   For   the subsequent  years  also  the Committee raised bills  on  the Board on similar basis.

     Under Notification dated January 23, 1976 of the Local Government  Department of the Punjab Government issued under clause (a) of sub-section (1) of Section 242 of the Act, the Government  of  Punjab  imposed  within the  limits  of  the Notified  Area  Committee, Nangal township a tax payable  by the  owner  of  the building at the rate  specified  in  the schedule.  This schedule is as under :

     S.No.  Description of property

     Rate of Tax

     1.

     Building and lands having annual rental value -

     (i) not exceeding Rs.840/-

     (ii) exceeding Rs.840/- but not exceeding Rs.1,800/-

     (iii) exceeding Rs.1,800/-

     No Tax

     12½ per cent

     15 per cent

     Now  when  the  Committee raised bill  for  house  tax clubbing  quarters  or bungalows adjoining to each other  as one building, the Board objected to the same contending that each  individual quarter/bungalow occupied by its  employees has  to be treated as separate and that the building  having annual  rental value not exceeding Rs.840/- would be  exempt from  house tax.  The objections of the Board were  rejected by  the  Committee.   The Board thereafter filed  an  appeal under   Section  84(1)  of  the   Act  before   the   Deputy Commissioner,  Ropar  for  setting aside  and  quashing  the demand  bill and for the refund of the excess tax  recovered from  the  Board.   The  Board had made  the  payment  under protest.   This appeal was, however, dismissed by the Deputy Commissioner.

     Board  then  filed  a writ petition in  the  Punjab  & Haryana  High  Court  challenging   the  assessment  by  the Committee.    A  learned  single   Judge  allowed  the  writ petition.  He was of the view that each separate residential unit  would be building and would have to be treated as such for  the purpose of levying house-tax and in doing so annual rental  value of every separate unit would have to be  taken into  consideration.   Now  it was the Committee  that  felt

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3  

aggrieved and filed Letters Patent Appeal in the High Court. This was dismissed by the impugned judgment and the order of the learned single Judge was confirmed.  Still aggrieved the appellant  filed  this appeal after obtaining leave of  this Court.

     It  certainly  suits  the Committee  to  consider  all quarters  or bungalows of one block as one building as  that would  raise the annual value resulting in higher amount  of house  tax  as  per the schedule above  mentioned.   It  was contended   by  Ms.   Jaiswal,   learned  counsel  for   the Committee,  that  there is only one building which has  been sub-divided  though  let out to various persons.   She  said even  though there were different occupiers, ultimate source of  title-holder  was  the  Board   and  the  Committee  was justified   in  imposing  house   tax  collectively  on  the building.   She  said it was for the Committee to decide  if block  of quarters constituted one building or not.  Lastly, it  was submitted that the Board itself was not the owner of the  building as ownership vested in the State of Punjab and the  Board was merely an occupier of the building which  had been given to it for occupation of its staff and their being one  occupier, whole block could be assessed as one building treating it as one unit.

     We  do  not think that the Committee is right  in  its approach.   If  we  may  refer  to  the  definition  of  the ’building’, it means any house used for the purpose of human habilitation.   The  term ’house’ in the present case  would mean  a dwelling house intended for human habilitation.   It is not disputed that each quarter or bungalow is allotted to a  separate  employee  who lives therein  with  his  family. Simply  because some quarters or some bungalows have  common wall  separating each other would not mean that that quarter or  bungalow  ceases to be a house.  A house is a  place  of dwelling  or  habilitation.  It is difficult to  accept  the proposition  that  quarters  in one row having  common  wall though each separating the other would mean one building for the  purpose  of  arriving at the annual value.  We  do  not think  that any argument is needed for us to hold that  each such  quarter or bungalow for the residence of employees  of the  Board  would fall within the definition of  ’building’. Stand  of the Committee appears to us is rather incongruous. Just to get more revenue, the Committee could not change its stand and put interpretation on the term ’building’ which is incomprehensible.   The  Committee  was   not  justified  in clubbing  all  the quarters/bungalows in one block  together and term that as ’building’.

     These  appeals  are accordingly dismissed with  costs. Judgment  of  the  High Court is affirmed.  When  leave  was granted  by  this Court, there was stay of the operation  of the  impugned judgment of the High Court.  With dismissal of these  appeals, stay stands vacated and if in the  meanwhile any  excess  amount  have  been paid by  the  Board  to  the Committee,  it  shall  be refunded by the Committee  to  the Board within two months.