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PETITIONER: THE SURAT TEXTILE MARKET, COOPERATIVE SHOPS AND WAREHOUSES,

       Vs.

RESPONDENT: MUNICIPAL CORPORATION OF THE CITY OF SURAT

DATE OF JUDGMENT:       25/11/1997

BENCH: A.S. ANAND, S. RAJENDRA BABU

ACT:

HEADNOTE:

JUDGMENT:                THE 25TH DAY OF NOVEMBER, 1997 Present:                Hon’ble Dr. Justice A.S. Anand                Hon’ble Mr. Justice S. Rajendra Babu K.G. Shah,  Sr. Adv.  , M.N.  Shroff, Adv.  with him for the appellant S.K. Dhclakia,  Sr. Adv.,  S. B.  Naik and S.C. Patel, Advs. with him for the Respondent                          O R D E R      The following Judgment of the Court was delivered:      This appeal calls in question the judgment and order of the High  Court of  Gujarat dated  8th  November,  1990  and arises in the following circumstances :-      The appellant is a cooperative society registered under the Gujarat  Cooperative Societies Act, 1961. The Respondent a  Corporation   Constituted  under  the  Bombay  Provincial Municipal Corporations  Acts, 1949  (hereinafter referred to as the  act’) served  the appellant with a show cause notice of assessment  in respect of the building constructed by the appellant on  Survey Nos.  95 and  96, Paiki of Ward No. 14, Umarwada on  the land  taken  on  lease  by  it  from  Surat Municipal  Corporation.  The  appellant  has  constructed  a textile  market  at  the  said  site.  The  appellant  filed objections to  the said  notice of assessment. After hearing objections, the  assessment proceedings  were finalised  and the appellant  was informed. The respondent while finalising the assessment  proceedings added  an amount of Rs. 5,508/-, being 50%  of the  income derived  by the  appellant, in the rental value  of  revolving  restaurant,  holding  that  the appellant derived income from the lift which is provided for taking visitors  from the  ground floor  to the  14th floor, where the  revolving restaurant  is situated. The assessment order was  challenged through  a Municipal Assessment Appeal in the  court of  the learned civil judge (senior Division), Surat, By  an order  dated 26th  August, 1977, the appellate authority dismissed  the appeal  holding that  the appellant had let out the revolving restaurant with the convenience of t he lift and the charges collected by it from the customers at the  rate of  Rs. 1/-  per person  visiting the revolving restaurant by  using that  lift were  to be  included in the

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rental value.  A Regular  Civil Appeal  was thereafter filed under Section  411 of  the Act  by the appellant against the judgment and  order dated  26th  August,  1977.  The  second appeal was dismissed and the judgment and order of the first appellate court  was confirmed  on 18th  October, 1979.  The appellant thereafter  filed a  writ petition  under Articles 226/227 of  the Constitution  of India  in the High Court of Gujarat, Challenging  the  Judgment  and  order  dated  18th October, 1979  passed by  the learned Extra Assistant judge, Surat in  the Regular  Civil Appeal.  The writ petition also came to  be dismissed  on 8th  November,  1990.  Hence  this appeal by special leave.      The basic  question which requires our consideration in this appeal  is whether  the  charges  which  the  appellant collects at  the rate  of Rs.  1/-per person  for use of the lift could  be added  to the  rental value  of the revolving restaurant located  on the  14th floor  of the  building  of purposes of computation of property taxes by the respondent- municipal Corporation?      To answer the question it would be appropriate to first refer to  the definition  of the ’annual letting value’. The ’annual letting  value’ has been defined in Section 2(1A) of the Act, the relevant portion of which reads as follows:-      ’annual letting value’ means, --      (i) in relation to any period prior      to 1st  April, 970, the annual rent      for which  any building  or land or      premises, exclusive  (of) furniture      of machinery  contained or  situate      therein or  thereon, might,  if the      Bombay  Rents,  Hotel  and  Lodging      House Rates control Act, 1947 (Bom.      LVTI of  1947) were  not in  force,      reasonably be  expected to let from      year to  year with reference to its      use;      (ii)  in   relation  to  any  other      period, the  annual rent  for which      any building  or land  or premises,      exclusive    of    furnitures    or      machinery  contained   or  situated      expected to  let from  year to year      with reference to its use;      and shall include all payments made      or agreed  to be  made to the owner      by a person (other than the owner )      occupying the  building or  land or      premises on  account of occupation,      taxes, insurance  or other  charges      incidental thereto;      The High Court noticed that the lift which was provided and was  to be  used for  going to the 14th floor, was meant only for the use of the revolving restaurant and, therefore, that lift  was in  the nature  of an exclusive passage or an access to  the revolving  restaurant. According  to the High Court :-      "It is  clear that  this particular      lift,  was   intended  to   be   an      exclusive passage  for going to the      revolving restaurant  on  the  14th      floor  and   it  should   be  views      (viewed) as  such in the context of      imposing municipal  Taxes under the      Act.   The   provision   for   such      exclusive passage  to the revolving

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    restaurant cannot  be compared with      rendering services  or  giving  the      amenities of providing hot water to      the tenants in a building."      The High  Court after  referring to  various  judgments cited before it rightly concluded that the lift provided for the restaurant  was an  integral part of the building and on the basis  of  that  finding  held  that  the  respondent  - Corporations was  entitled to  impose tax in respect of that passage through  the use of the lift since it constituted an integral part of the building for access to the 14th floor.      The lift  which  has  been  provided  for  use  of  the customers intending to go to the revolving restaurant on the 14th floor  is meant  exclusively for  use of  the customers visiting the  revolving restaurant.  This position  has been admitted by  Mr. D.P.  Dalal, the  Manager of the appellant- Society who  was examined  as a  witness.  He  categorically admitted that  t he  revolving restaurant was given on lease with the  under standing  that it  would be given a separate facility of the lift and that "the lift is provided only for the restaurant".  This evidence  makes it  abundantly  clear that the  facility of the lift was required to be treated as an integral  part of  the building  and that  being so,  the respondent was justified in including 50%  of the 50% of the income received  by the  appellant  in  the  annual  letting value. It  is not possible to agree with learned counsel for the appellant  that the  provision of lift was in the nature of an  amenity or service. Whereas an amenity or service may also be  considered to  be for  the beneficial  use  of  the residents of the building, provision of an exclusive passage to a  portion of  the  building,  is  an  essential  and  an integral part  in so  far as  that  building  is  concerned. Learned counsel  for the  appellant. however, submitted that the lift  is not meant.  Only for the customers visiting the revolving restaurant  but is  also meant  for those visitors who intend  to go  to the  observation gallery. The argument does not  have any  substance cause  of the  evidence of Mr. Dalal to  which we  have  already  made  a  reference.  That evidence  categorically   shows  that  the  lift  was  meant exclusively for the use of the restaurant and, therefore, it does not  lie in the mouth of the appellant now to urge that the lift  was also  for the  use of the persons visiting the observation gallery.  Property tax  in respect  of  such  an integral part of the building was, therefore, required to be levied by the corporation. Learned counsel does not question the quantum of tax.      In this  view of the matter we find that the High Court committed  no   error  in   dismissing  the  writ  petition, upholding the  order of assessment as also the orders of the appellate authorities.  We do  not find  any merit  in  this appeal which consequently fails and is dismissed but without any order as to costs.