THE SURAT TEXTILE MARKET COOPERATIVE SHOPS AND WAREHOUSES SOCIETY LTD., SURATversusMUNICIPAL CORPORATION OF THE CITY OF SURAT

          THE SURAT TEXTILE MARKET COOPERATIVE                                 A
        SHOPS AND WAREHOUSES SOCIETY LTD., SURAT
                            v.
       MUNICIPAL CORPORATION OF THE CITY OF SURAT

                          NOVEMBER 25, 1997
                                                                               B
          [DR. A.S. ANAND AND S. RAJENDRA BABU, JJ.]


     Bombay Provincial Municipal Corporations Act, 1949: Sections2(JA)
and 4ll.
                                                                               c
       Municipality-levy qf Property tax-Determination of annual value-
Land taken on lease by appellant-Society-Building constructed thereon-
 Revolving restaurant located on the I 4th floor of building-Appellant let out
the revolving restaurant-Lift provided for use of restaurant-Lift meant
exclusively for use of the customers visiting the reiiolving restaurant-Charges D
collected from the customers @ Rs.11- per per~on visiting the revolving
restaurant-Inclusion oj 50% of the income received by appellant in the
annual letting value of revolving restaurant-Challenge to assessment
order-Order upheld by authority as weil as appellate authority-Writ
challenging assessment dismissed by High Court-Appeal-Held, lift provided
for the restaurant was integral part of the building-'-Municipal Corporation E
 was justified in including 50% the income received by the appellant in the
annual letting value.

      CIVIL APPELLATE JURISDICTION : Civil App_eal No. 1597 of 1991.

      From the Judgment and Order dated 8.11.90 of the Gujarat High Court
                                                                               f
in C.A.No. 1627of1979.

      K.G. Shah and M.N. Shroff for the Appellant.

      S.K. Dholakia, S.B. Naik and S.C. Patel for the Respondent.
                                                                               G
      The following Order 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:-
                                      459
                                                                               H
    460                      SUPREME COURT REPORTS [1997] SUPP. 5 S.C.R.

A          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 Act, 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
B   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
C   income derived by the appellant, in the rental value of revolving restaurant,
    holding that the appellant derives 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
D   dismissed the appeal holding that the appellant had let out the revolving
     restaurant with the convenience of the lift and the charges collected by it from
    the customers at the rate of Re. 1/- per person visiting the revolving restaurant
     by using that lift were to be included in the rental value. A Regular Civil
     Appeal was thereafter filed under Section 411 of the Act by the appellant
E    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
F    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 Re. I/- per
G   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 for purpose 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
H   defined in Section 2(1A) of the Act, the relevant portion of which reads as
     SURATT.M. C. SHOPS& WAREHOUSESS. LTD. v. MUNICIPALCORPN. 461

follows :-                                                                           A
      'annual letting value' means-

        (i) in relation to any period prior to 1st April, 1970, the annual rent
        for which any building or land or premises, exclusive (of) furniture or
        machinery contained or situate therein or thereon, might, ifthe Bombay       B
        Rents, Hotel and Lodging House Rates Control Act, 1947 (Born. LVII
        of 194 7) were not in force, reasonably be expected to let from year to
        year with ref~rence 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 C
        contained or situate therein or thereon, might reasonably be 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         D
        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 :-             E
        "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 restaurant cannot be compared with rendering        F
        services or giving the amenities of providing hot water to the tenants
        in a building."

       The High Court after referring to v.arious jugments cited before it rightly
concluded that the lift provided for the restaurant was an integral part of the      G
building and on the basis of that finding held that the respondent-Corporation
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 of the access to the
14th floor.

      The lift which has been provided for use of the customers intending to         H
    46.2                     SUPREME COURT REPORTS [1997] SUPP. 5 S.C.R.

A 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 withness. He categorically admitted that the revolving restaurant
  was given on lease with the understanding that it would be given a separate
B 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 intergral part of the building and that being so, the respondent
  was justified in including 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.
C Whereas an amenity or service may also be considered to be for the beneficial
  use ofthe residents of the building, provision of an exclusive passage to a
  portion of the building, is an essential and an intergral part in so far as that
  building is concerned. Learned counsel for the appellant, however, submitted
  that t~e iift is not meant only for the customers visiting the revolving restaurtant
  but is· also meant .for those visitors who intend to go to the observation
D gallery .. The argument does not, have any substance because 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
  resiau.tsant 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
E gallery. Property tax in respect of such an intergral 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, i~ dismissing the writ petition, upholding the order of assessment as
F also the orders of the appellate authorities. We do not find any merit in this
     appe~i which consequently fails and is dismisssed but without any order as
     to costs.

     T.N.A.                                                       Appeal dismissed.