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CASE NO.: Appeal (civil) 4052  of  1996

PETITIONER: THE COMMISSIONER

       Vs.

RESPONDENT: GRIHA YAJAMANULA SAMKHYA & ORS.

DATE OF JUDGMENT:       02/05/2001

BENCH: S.P. Bharucha, D.P. Mohapatra & S.N. Phukan

JUDGMENT:

WithCivil Appeal Nos.4057-4060 and Civil Appeal Nos.4061-4088 of 1996

J U D G M E N T

D.P.  MOHAPATRA, J. L...I...T.......T.......T.......T.......T.......T.......T..J

   The  Andhra  Pradesh High Court disposed of a  batch  of Writ   Petitions   involving   the   controversy   regarding assessment  of property tax of buildings located within  the limits  of different Municipal Corporations in the State  by the  common  judgment rendered on 29th December, 1994.   The conclusions arrived at by the High Court have been summed up as follows:

   1) The power for determination of the rateable value of the   building   and  the   property-tax  belongs   to   the commissioner  which cannot be fettered by rules framed under the Acts;

   2)  The  Committee constituted by the Government has  no role  to  play  and the Commissioner is not bound  by  their recommendations.

   3)   The  annual  rental  value  to  be  fixed  by   the Commissioner  in  the corporation areas shall be limited  to the  fair  rent either determined or determinable under  the A.P.  Buildings (Lease, Rent and Eviction) Control Act.

   4)  Subject to the maximum as above the Commissioner may fix  a  lesser annual rental value keeping in  consideration the   factors  as  provided  for  in  Section  212  of   the Corporations Act.

   5)  The annual rental value in respect of all  buildings in Municipal Areas, where rent has been determined under the rent  control legislation, would be the gross annual  rental on  the  basis of such rent determined unless, there is  any fraud or collusion and that in respect of other buildings in the  Municipality  areas, the Commissioner has to  determine

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the factors under Section 87(2).

   6)   In   determining  the   annual  rental  value   the Commissioner may resort to plinth area method so as to serve him  as  a  basis  and  guide but it will  be  open  to  the assessees to contest the annual rental value, rateable value or property-tax determined in respect of their buildings and when  objections are raised, the Commissioner has to  decide those  objectively without fettering his discretion  because of the determination already made on the basis of the plinth area method.

   7)  Rules  3 to 7 of the Corporation and  the  Municipal rules  are  to be read only as enabling provisions  for  the Commissioner  to aid him in discharge of his functions under the  corporation  or the Municipal Act to arrive at  working figures  for  the  purpose  of   determination  but  not  as fettering his discretion in the matter as conferred upon him under the statutes.

   8)  The form-A publications already made would be deemed to  have been issued by the Commissioner only on such  basis as  is stated above and not in pursuance of  recommendations of the Committee.

   9)  Before Form-B is issued in respect of buildings  and lands,  the  Commissioner  shall afford opportunity  to  the assessees  to  object to the determinations made  and  shall decide  the  objections on considerations as directed  above and  provisions  of Sections 214 to 225 of the  Corporations Act shall be scrupulously followed subject to the provisions of appeal.  Xxx xxx xxx In the result the writ petitions are allowed   to  the  extent  indicated   above,  but  in   the circumstances there shall be no order as to costs.

   The  correctness of the said judgment is under challenge in these appeals filed by the Commissioners of the Municipal Corporations concerned and the Government of Andhra Pradesh. On perusal of the impugned judgment it appears that the main challenge  in the case was against the determination of  the annual  rental  value  of the buildings within the  area  of Municipal  Corporations  and  Municipalities in  the  State. Since  the questions arising in all the appeals are  similar and  the appeals arise from a common judgment, all the cases were  heard together and they are being disposed of by  this judgment.   Determination  of the questions raised in  these cases   depends  on  the   interpretation  of  the  relevant provisions  of  the  Hyderabad Municipal  Corporations  Act, 1955, the Andhra Pradesh Municipalities Act, 1955 as amended by  the  A.P.   Municipalities   Act,  1989,  the  Hyderabad Municipal  Corporations (Assessment of Property Tax)  Rules, 1990  (for  short the Rules) and the A.P.   Municipalities (Assessment  of Taxes) Rules, 1990 (for short the Municipal Rules).   Hyderabad  Municipal Corporations Act, 1955  (for short the Corporation Act)

   Under   Section  2(3)  building   includes  a   house, out-house,  stable,  latrine,  godown,   shed,  hut,   wall, fencing,  platform  and  any   other  structure  whether  of masonry,  bricks, wood, mud, metal or of any other  material whatsoever.   In  section 2(7) Commissioner is defined  to mean the Municipal Commissioner for the city appointed under Section  104  and includes an acting Commissioner  appointed under Section 110.

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   Section 2(48) defines rateable value to mean the value of  any  building  or  land fixed  in  accordance  with  the provisions of this Act and the rules made thereunder for the purpose of assessment to property taxes.

   Chapter   VIII  of  the   Act  contains  the  provisions regarding  Municipal  taxation.   Sections 197  to  289  are included  in  the said chapter.  In section 197(1)(i) it  is provided  that for the purposes of this Act the  Corporation shall impose the following taxes namely :

   a) taxes on lands and buildings.  Xxx xxx xxx

   In  section 199 provisions regarding property taxes  are made.   Property taxes include (a) a general tax;(b) a water tax;   (c)  a  drainage  tax;  (d) a lighting  tax;   (e)  a conservancy tax.  In sub-section(2) it is provided that save as  otherwise  provided  in this Act these  taxes  shall  be levied at such percentages of their rateable value as may be fixed  by  the Corporation.  Provided that the aggregate  of the  percentages so fixed shall not in the case of any  land or  building be less than 15 per cent or greater than 30 per cent.

   (emphasis supplied)

   Sections  204 to 206 contain provisions regarding person or  persons  on whom rests the liability for payment of  the property tax.

   In  Sections  207  to 211 are the  provisions  regarding notice  of transfer etc., of premises assessable to property tax.

   In  sections  212 and 213 are contained  the  provisions regarding  valuation  of  property  assessable  to  property taxes.

   Section  212  which deals with the determination of  the rateable value reads as follows:

   212.  Rateable value how to be determined (1) (a) The annual  rental value of lands and buildings shall be  deemed to  be the gross annual rent at which they may reasonably be expected  to be let from month to month or from year to year with reference to its location, type of construction, plinth area,  age of the building, nature of use to which it is put and such other criteria as may be prescribed.

   (emphasis supplied)

   (b) the annual rental value of lands and buildings shall be  deemed  to  be the gross annual rent at which  they  may reasonably be expected to be let from month to month or from year  to  year,  less  deduction  at the  rate  of  10%  for buildings  aged  upto 25 years;  and 20% for  the  buildings aged  above 25 years;  of that portion of such gross  annual rent  which  is  attributable to the buildings,  apart  from their  sites and adjacent lands occupied as an  appurtenance thereto  and  the  said deduction shall be in  lieu  of  all allowances for repairs or on any other account whatsoever.

   Provided  that  a  rebate of 40 per cent of  the  annual

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rental  value shall be allowed in respect of the residential buildings  occupied by the owner inclusive of the  deduction permissible elsewhere.

   In  Section  213 power is vested in the Commissioner  to call  for  information or returns from owner or occupier  or enter  and  inspect  assessable  premises.   To  enable  the determination  of the rateable value of any building or land and  the  person  primarily liable for the  payment  of  any property  tax  leviable in respect thereof the  Commissioner may  require the owner or occupier of such building or land, or  of  any  portion thereof, to furnish  him,  within  such reasonable  period  as  the Commissioner specifies  in  this behalf  with information or with a written return signed  by such owner or occupier.

   Section  218  mandates the Commissioner to  give  public notice  as  far  as possible, when the entries  required  by clauses  (a)(b)(c)  and  (d)  of   section  214  have   been completed,  and of the place where the ward assessment  book or a copy of it, may be inspected.

   In  Section  220  provision  is   made  for  receipt  of complaints  against the amount of rateable value in the ward assessment book in the office of the Commissioner.

   Section  223  mandates  that   the  Commissioner   shall investigate  and dispose of the complaint in the presence of the  complainant,  if  he shall appear, and if not,  in  his absence.  (emphasis supplied)

   The  Ward assessment books which are to be authenticated by  the  Commissioner, is provided under section 224 of  the Act.

   Rule  3 of the Municipal Corporation Rules contains  the provision  regarding  annual rental value.  Sub- rule(1)  of Rule  3  provides that the annual rental value of lands  and buildings  shall  be deemed to be the gross annual  rent  at which  they may reasonably be expected to be let from  month to  month  or  from  year  to year  with  reference  to  its location,  type  of  construction, plinth area, age  of  the building,  nature  to use to which it is put and such  other criteria as may be specified.

   (emphasis supplied)

   In  sub-rule(2)  it is laid down that  the  Commissioner shall  gather  the  information relating to  the  prevailing rental value as specified in Rules 4 to 6 so as to arrive at the  rate of rent per month or per year per square meter  of plinth  area and then issue a draft notification in a  daily newspaper  having  circulation  in the district and  in  the District  Gazette calling for objection and suggestions from the  public  so as to reach the Commissioner within 15  days from  the  date  of publication of the  draft  notification, regarding  the  Division of the Corporation into  Zones  and monthly  or yearly rental values per square metre of  plinth area  in  each  Zone.  The rule further  provides  that  the Commissioner should consider the objections and suggestions, if  any,  received in response to the said notification  and revise  the  Zones and the monthly or yearly rents  wherever necessary  and that he shall place the proposals before  the Committee  constituted  by  the  Government  for  its  final recommendations.  On the basis of the recommendations of the

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Committee, the Commissioner shall issue a final notification in  Form-A  and  publish  it in  a  local  newspaper  having circulation  in the District and in the District Gazette for information of the public.

   Rule  4  contains  provisions   regarding  division   of Municipal  Corporation area into Zones.  Rule 5 is regarding classification  of buildings and Rule 6 provides that  after classification  of  the  buildings  based  on  the  type  of construction  they  shall be further classified taking  into consideration the nature of use of such buildings.

   Rule  7 which contains provision of fixation of  monthly or  yearly rent reads as follows (p.355):  7.  Fixation  of monthly or yearly rent :  1) All buildings located in a zone shall  be  classified  based on types  of  construction  and nature  of use, 36 categories of buildings can be identified in  each zone based on the above criteria.  The Commissioner shall  gather  the  information relating to  the  prevailing rental  value  of the buildings of various categories  in  a zone  and  arrive at average monthly or yearly rent  fixable for each category of building per sq.  metre of plinth area.

   (2)  The  Commissioner  shall   then  provisionally  fix monthly  or  yearly  rent for each category in  a  Zone  per square  metre of plinth area and notify the rate of  monthly or  yearly rental so fixed in Form A for adopting the said rates  for  fixation  of  monthly or yearly  rental  of  the buildings  in  a zone and publish the same in  the  District Gazette  and in a local newspaper having circulation in  the district  calling  for  objections or suggestions  from  the Public   for  such  adoption   regarding  the  division   of Municipality into Zones.  The notification shall contain the monthly  or  yearly rental value of the buildings in a  Zone together  with the localities/areas with particulars of door numbers   included   in  the   Zone.   The   objections   or suggestions,  if any, on the said notification shall have to be  sent to the Commissioner within 15 days from the date of its  publication.   The  Commissioner   shall  consider  the objections  and suggestions, if any, received in response to the  said notification and revise the Zones and the  monthly or  yearly rental values wherever necessary.  He shall  then place  all the proposals before the District Level  Advisory Committee  constituted  by  the  Government  for  its  final recommendations.  Thereupon the Commissioner shall publish a final  notification  in Form A in the District  Gazette  and local  newspaper  having  circulation in  the  District  for information  of  the public.  (Emphasis supplied) Note-  Any notification   issued  prior  to   this  amendment  by   the Commissioner shall be treated as a draft notification.

   (3)  The  Commissioner shall fix the monthly  or  yearly rent  for each category in a zone per square metre of plinth area  and notify the rate of monthly or yearly rent so fixed in  Form A for adopting the said rates fixation of monthly or  yearly  rental  value  of buildings in a  zone  and  for information  of the public.  The Commissioner shall issue  a notification  in  Form A furnishing the  localities,  area included  in  the  zone  and  particulars  of  door  numbers included in the zone.  The notification in Form A shall be published in local newspapers having circulation in the area for information of the public.

   (4)  The  Commissioner shall obtain information  of  all buildings  in respect of plinth area, type of  construction,

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age  of  building, nature of use and fix monthly  or  yearly rental  value as per the rate of monthly rents notified  for each  category  of a building in a zone.  The  property  tax assessment list of buildings shall be prepared in Form B.

   (5)  The  rates  of  monthly or yearly  rents  for  each category  of  building in a zone shall be revised once in  5 years  taking into consideration the rent component of  cost of living index prevailing at the time of preparation of new assessment books.  In respect of value of the lands on which buildings  constructed  for  the   purposes  of  choultries, hotels, lodges and cinema theatres whose value increases and the  income  on the property does not increase, the  average rental  value shall be fixed with reference to the income of the property.

   (6)  In  the  case of items wherein  varying  rates  are provided,  the  Municipal Corporation shall adopt the  rates found  suitable  for  the particular  municipal  area  after taking  the local conditions into account.  The Commissioner may  also  increase  the rates so adopted by  the  Municipal Corporation  by  not exceeding 10% over the rates  aforesaid for  superior  quality of better type of flooring  and  fine plastering depending upon the workmanship and cost involved. Where  the  entire  roof  is not  of  the  same  description appropriate  rates shall be adopted for the different  types of  roof  for arriving at the total cost of  erection.   The rate  of  cost  per  square   metre  plinth  area  shall  be determined in consultation with the concerned Local Engineer belonging  to  Roads and Buildings Department in  consonance with  the  price  levels  prevailing at  the  time  of  such revision.

   (7)  In the case of buildings which are partly  occupied by  the owner and partly let out on rent, property tax shall be  levied  as per Rules 6 and 3 on owner occupied  portions and rental portions respectively.

   (8)  For  the purpose of assessing the vacant land,  the estimated  capital  value  of the land shall be  the  market value  fixed  by Registration Department for the purpose  of registration.

   [8.   Any  tax  lawfully levied by or on behalf  of  the Corporation  at  the  commencement  of  these  rules   shall notwithstanding  any  change  in  the method  or  manner  of assessment  under these rules, be continued till  assessment under these rules is made.]

   By   virtue   of  section  5  of  the  A.P.    Municipal Corporation  (2nd  Amendment) Act, 1995 (Act No.25 of  1995) the  amendment made to the Hyderabad Municipal Act, 1955  by section  3  was extended to and made applicable also to  the Vishakhapatnam   and  Vijayawada   Municipal   Corporations. During  the  hearing  of the cases the main  thrust  of  the arguments  advanced  by Shri R.F.  Nariman,  learned  senior counsel  appearing  for  the   appellants  was  against  the conclusions  arrived at by the High Court (para 2) that  the Committee  constituted by the Government has no role to play and the Commissioner is not bound by their recommendations.; and (para 3) that the annual rental value to be fixed by the Commissioner  in  the corporation areas shall be limited  to the  fair  rent either determined or determinable under  the

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A.P.   Buildings (Lease, Rent and Eviction) Control Act  and (para  7)  that  the  provisions  in rules 3  to  7  of  the Corporation  Rules  are  only enabling  provisions  for  the Commissioner  to help him in discharge of his functions  but not to fetter his discretion in the matter.

   The  calculation of rateable value of a property for the purpose  of  determination  of  property  tax  by  municipal corporation/council  has engaged the attention of this Court from time to time.

   In  the  case of the Corporation of Calcutta  vs.   Smt. Padma  Debi  and Others ( 1962(3) SCR 49), this  Court  held that on a fair reading of the express provisions of s.127(a) of the Calcutta Municipal Act, 1923, the rental value cannot be  fixed  higher  than  the standard rent  under  the  Rent Control  Act.  It was further held that words gross  annual rent  at  which  the land or building might at the  time  of assessment  reasonably be expected to let from year to year in  s.127(a)  of  the Act implies that the  rent  which  the landlord  might realise if the house was let is the bais for fixing  the annual value of the building.  The criterion  is the rent realisable by the landlord and not the value of the holding  in  the  hands  of the tenant.  The  value  of  the property  to  the  owner  is  the  standard  in  making  the assessment.   Interpreting  the  word  reasonably  it  was observed  that whether a particular act is reasonable or not depends  on  the  circumstances  in a  given  situation.   A bargain  between  a  willing  lessor and  a  willing  lessee uninfluenced  by  any extraneous circumstances may afford  a guiding  test of reasonableness.  The phrase at the time of assessment  means  that the assessment commences  with  the making of the valuation under s.131 of the Act and ends with the  determination of the objection under s.140 thereof.  An event  which  takes place during this period may  be  relied upon  for assessing the annual value under s.  127(a) of the Act.

   In  the case of Guntur Municipal Council v.  Guntur Town Rate  Payers Association (1971) 2 SCR 423), this Court held that   under   Section   82(2)  of   the   Madras   District Municipalities  Act  (5 of 1920) the test is what  rent  the premises  can  lawfully fetch if let out to  a  hypothetical tenant.   The  municipality  is  not   free  to  assess  any arbitrary  annual  value but has to look to and is bound  by the  fair  or the standard rent which would be  payable  for particular  premises  under  the Rent Control Act  in  force during  the  year of assessment.  This Court did  not  agree that the language of s.  82(2) of the Municipalities Act any distinction  can be made between buildings the fair rent  of which has been actually fixed by the Controller and those in respect  of  which no such rent has been fixed.  This  Court further held that the assessment of valuation must take into account  the measure of fair rent as determinable under  the Act.   It may be that where the Controller has not fixed the fair  rent the municipal authorities will have to arrive  at their  own figure of fair rent but that can be done  without any  difficulty by keeping in view the principles laid  down in  section 4 of the Act for determination of fair rent.  In Corporation  of  Calcutta vs.Life Insurance  Corporation  of India  (1971  (1)  SCR  248), this Court took  note  of  the decision  in  Smt.   Padma  Debis   case  (supra)  and  the interpretation  of  the  proviso to section  168(1)  of  the Calcutta Municipal Corporation Act, 1951 and observed:

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   By  the  addition of the proviso, in our judgment,  the meaning  of the expression gross rent at which the land  or building  might  reasonably  be  expected  to  let  is  not altered.   In  the  present case, there is no order  of  the Controller  fixing  standard  rent under s.  9 of  the  West Bengal  Premises  Rent  Control (Temporary  Provision)  Act, 1950,  but  the  standard  rent  stands  determined  by  the definition  of  that expression in s.  2(1)(b) of that  Act, which provides (omitting parts not relevant):

    standard rent in relation to any premises means-

   (a)   (b) where the rent has been fixed under  section 9,  the rent so fixed;  or at which it would have been fixed if application were made under the said section.

   We  are  therefore of the view that the High  Court  was right  in  assessing  the annual value on the basis  of  the standard rent as statutorily determined.

   This Court summed up its views in the following words:

   But  under the Act the quantum of the consolidated rate depends  upon  the annual value of land or building  on  the gross  rent for which the land or building might  reasonably be  expected  to  let, and not the gross rent at  which  the subordinate  interest  of  a tenant may be  expected  to  be sublet.   In determining the assessment of annual value, the assessing authority is not concerned with the rent which the tenant  may  receive from his sub-tenant.  It is  the  gross rent  which  the  owner may realize by letting the  land  or building  under  a  bargain   uninfluenced  by   extraneous considerations  which determines the annual value.  Section 193  only provides for apportionment of consolidated rate  : it is irrelevant in determining annual value.

   In the case of Srikant Kashinath Jituri vs.  Corporation of  the City of Belgaum ((1994) 6 SCC 572), a Bench of three learned  Judges of this Court expressed the doubts as to the soundness and continuing relevance of the view taken by this Court  in  several earlier decisions that the  property  tax must  be  determined  on  the   basis  of  fair  rent  alone regardless of the actual rent received.  The observations of this Court are quoted herein-below:

     Before parting with this appeal, we feel compelled to express  our  doubts  as  to the  soundness  and  continuing relevance of the view taken by this Court in several earlier decisions  that  the property tax must be determined on  the basis  of  fair  rent alone regardless of  the  actual  rent received.   Fair  rent very often means the rent  prevailing prior  to 1950 with some minor modifications and  additions. Property   tax  is  the  main   source  of  revenue  to  the municipalities  and municipal corporations.  To compel these local  bodies  to levy and collect the property tax  on  the basis of fair rent alone, while asking them at the same time to  perform all their obligatory and discretionary functions prescribed   by   the  statute  may  be  to  ask   for   the discretionary  functions prescribed by the statute may be to ask  for the impossible.  The cost of maintaining and laying roads, drains and other amenities, the salaries of staff and wages of employees  in short, all types of expenditure have gone  up  steeply over the last more than forty  years.   In such  a  situation, insistence upon levy of property tax  on the  basis of fair rent alone  disregarding the actual rent

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received    is neither justified nor practicable.  None  of the  enactments  says so expressly.  The said principle  has been  evolved  by  courts by a  process  of  interpretation. Probably a time has come when the said principle may have to be  reviewed.  In this case, however, this question does not arise  at this stage and, therefore, it is not necessary  to express a final opinion on the said issue.

   In  the case of Asstt.  General Manager, Central Bank of India  and  others vs.  Commissioner, Municipal  Corporation for  the  City of Ahmedabad and others (1995 (4)  SCC  696), this  Court interpreting section 2(1-A)(ii), provisos (aa) & (aaa) held :

   Accordingly,  we  hold that proviso (aa) means what  it says and has to be applied and followed in the cases covered by  it.   So  far  as  the  Municipal  Corporations  Act  is concerned, the annual rent is the actual rent received where the  standard  rent  is not fixed under Section  11  of  the Bombay Rent Act and it constitutes the basis for determining the annual letting value, rateable value and property taxes. That  is  the plain effect and meaning of proviso (aa).   So far   proviso  (aaa)  is   concerned,  an  apprehension  was expressed  that it would enable the Commissioner to question the  actual  rent received in every case and it would be  an endless   enquiry.   In  our   opinion,  however,  the  said provision is conceived to meet situations where the rent put forward  as the actual rent received is not a genuine  plea, i.e.,  where  it is a false plea.  A landlord may let out  a building  at less than market rent for many a reason,  e.g., the  tenant is a close friend or a close relative or because the  tenant  is  a  charitable  or  religious  organisation. Proviso  (aaa)  does not enable the Commissioner  to  ignore such  situation  for,  in  such  cases,  the  rent  actually received  is  the genuinely stipulated one.  This  power  is reserved to the Commissioner only with a view to ensure that by  merely  putting  forward  a figure which  is  not  true, persons do not escape the correct levy.

   Recently, in the case of East India Commercial Co.  Pvt. Ltd.   vs.   Corporation of Calcutta (1998) 4 SCC 368,  this Court  taking  note of several earlier  decisions  including Corporation  of  Calcutta  vs.  Padma Debi  (supra),  Guntur Municipal  Council v.  Guntur Town Rate Payers  Association (supra),  Corporation  of  Calcutta   vs.   Life   Insurance Corporation  of  India  (supra),  Municipal  Corporation  v. Ratnaprabha (supra) and Central Bank of India vs.  Municipal Corporation for the City of Ahmedabad (supra), summed up the gist  of the principles deducible from the decisions in  the following words :

   From  the  aforesaid decisions, the principle which  is deducible  is  that  when  the Municipal  Act  requires  the determination  of the annual value, that Act has to be  read along  with  Rent  Restriction Act which  provides  for  the determination  of  fair rent or standard rent.  Reading  the two Acts together the rateable value cannot be more than the fair  or  standard  rent which can be fixed under  the  Rent Control  Act.   The exception to this rule is that  whenever any  Municipal Act itself provides the mode of determination of  the annual letting value like the Central Bank of  India case relating to Ahmedabad or contains a non obstante clause as  in Ratnaprabha case then the determination of the annual letting  value  has  to  be according to the  terms  of  the Municipal  Act.   In  the present case, Section 168  of  the

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Municipal Act does not contain any non obstante clause so as to  make  the Tenancy Act inapplicable and nor does the  Act itself  provide  the  method or basis  for  determining  the annual  value.   This Act has, therefore, to be  read  along with determining the annual value.  This Act has, therefore, to be read along with Tenancy Act of 1956 and it is the fair rent  determinable under Section 8(1) (d) which along can be the annual value for the purpose of property tax.

   From  the statutory provisions noted above, it is  clear@@                                                        JJJJJ that  the Act provides that the tax shall be levied at  such@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ percentages  of  the rateable value as may be fixed  by  the Corporation.   It further provides the method and manner  of determination  of the rateable value.  The determination  of the  annual rental value which is the basis for  calculation of  the  rateable value is also provided in the Act and  the Rules.   The  Act  mandates   that  the  Commissioner  shall determine  the tax to be paid by the person concerned in the manner  prescribed  under the statute and the rules.  It  is our  view that the Act and the Rules provide a complete code for  assessment  of  the property tax to be levied  for  the buildings and lands within the municipal corporation.  There is no provision in the statute that the fair rent determined under  the  Rent  Control Act in respect of  a  property  is binding on the Commissioner.  The legislature has wisely not made such a provision because determination of annual rental value  under  the  Act  depends on  several  criteria.   The criteria  for such determination provided under the Act  may not  be  similar to those prescribed under the Rent  Control Act.   Further the time when such determination was made  is also  a  relevant  factor.   If in  a  particular  case  the Commissioner   finds   that   there   has  been   a   recent determination  of  the  fair  rent of the  property  by  the authority  under the Rent Control Act he may be persuaded to accept  the  amount as the basis for determining the  annual rental  value of the property.  But that is not to say  that the  Commissioner is mandatorily required to follow the fair rent fixed by the authority under the Rent Control Act.  The High  Court  therefore did not commit any error  in  holding that  the determination of fair rent under the Rent  Control statute  will  not  be binding on the Commissioner  for  the purpose of assessment of property tax under the Act.

   Coming  to the Committee set up by the State Government, we  find that the State Government constituted the Committee under  an executive order.  Our attention has not been drawn to  any  provision  of  the Act  which  empowers  the  State Government to constitute such a Committee under the statute. A   provision  is  made  in   the  Act  for  District  Level Committees;   but its role is only advisory.  The  Committee set  up by the State Government has no statutory  existence. Its  recommendations are advisory and are not binding on the Commissioner.   In this regard also the High Court cannot be said  to  have committed any illegality in holding that  the powers  of  the  Commissioner  are   not  fettered  by   the recommendation of the Committee.

   The  intent and purpose of the exercise to determine the annual rental value is to avoid arbitrariness in the process of  assessment  of  the  tax and also  to  ensure  that  the landlord  does  not escape payment of amount due as  tax  by taking  recourse  to  fraudulent   and  manipulated   under- writings  of the rental value.  For proper implementation of

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the provisions of the Municipal Act it is necessary that the power  of  assessment  should  be  vested  in  an  authority specified  in  the statute.  The importance of  specifying the authority to assess property tax under the Municipal Act cannot  be over- emphasised.  Keeping in view the  incidence of the tax the persons who are to bear the burden of payment of  the tax and the effect it will have on the funds of  the municipalities  for the purpose of development of the  area, the  legislature vested the power in the Commissioner of the Municipal  Corporation  to complete the exercise.  As  noted earlier,   the  statute  makes   provision  for  setting  up committees  like  the  District level Committee;   but  such committees play an advisory role for rendering assistance to the Commissioner in the matter.  Therefore, the order of the State  Government  making  the  decision  of  the  Committee binding  on the Commissioner is not sustainable and the view taken by the High Court in this regard is unassailable.

   On  the  discussions  in the foregoing  paragraphs,  the@@                                                          JJJ decision  that emerges is that only the findings/decision of@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ the  High  Court in point nos.(3) and (5), as stated in  the judgment  under  challenge,  are  to be set  aside.   It  is ordered  accordingly.  The appeals are allowed in part.   No costs.

   ...J.  (S.P.Bharucha)

   ...J.  (D.P.Mohapatra)

   ...J.  (S.N.Phukan) New Delhi;  May 2, 2001