IMPORTANT POINT
High Court was right in not declaring the whole of West Bengal Multistoried Building Tax Act, 1979 as unconstitutional on ground of alleged discrimination. The Act (except Section 25(2) is valid.

Headnote:(i) West Bengal Multistoried Building Tax Act, 1979-Sections 2(f), 3(3) and 5-Constitutional validity-Challenged-High Court struck down Section 25(2)-Appeal to Supreme Court to declare whole Act unconstitutional-Constitution of India-Article 14-Whether discrimination because of want of appropriate relationship or nexus between the nature of levy and the classification of building made under the Act? (No).
       Held : In the first place, the arguments raised before us on behalf of the appellants do not really fall for consideration inasmuch as from the facts extracted from the judgment of the learned Single Judge it is clear that the appellants own the buildings fully and, therefore, the question of part-ownership or any discrimination arising thereto need not be examined at their instance at all. (Para 6)
       Even otherwise, the scheme of taxation, to which we have adverted to just now, is upon the entire multi-storeyed building or part thereof. However, in any given case, if a person is in occupation of a portion of a multi-storeyed building as tenant, who can also be deemed to be the owner of such multi-storeyed building, he will be liable to pay tax to the extent of portion which is in his occupation and such levy of tax for portions let out or in the occupation of others will not impinge upon the provisions of Article 14 of the Constitution. The expression owner , if read along with Section 3 and Section 5 of the Act, will cover the multi-storeyed building and though for the purpose of taxation different units of the building are taken into consideration, the taxation is on the entire building. Therefore, the argument that the unit of assessment changes from the entire multi-storeyed building to individual units occupied by deemed owner or occupier cannot be accepted. The argument that the taxation being on the covered space of a portion whether he be the owner or the occupier in respect of a portion of a building would not be a relevant factor if multi-storeyed building is brought to tax, but we do not think this position is correct. The levy is upon the multi-storeyed building is clear from the provisions of Section 3 of the Act, but if the distribution of the levy is made upon the owners and in some cases upon the occupiers it will not change the purpose of the Act to levy a tax on the multi-storeyed building by reason of the fact that tax is levied on such occupied or covered area in the multi-storeyed building which is in possession of the owner or the occupier. This kind of classification has been not un-known. (Para 8)
       From the scheme of taxation in the present case it is clear that the levy is upon the multi-storeyed building or part thereof which may be in the occupation of the owner or a particular occupier who is deemed to be the owner thereof for the purpose of the Act. Therefore, the measure of taxation also does not vary in so far as the Act is concerned. We find no substance in this argument. (Para 9)
       (ii) Constitution of India-Art. 14-Constitutional validity of tax on multistoried building divided between two 5 stories or more and less than 5 storied-Whether discriminatory? (No) -West Bengal Multistoried Building Tax Act, 1979-Whether unconstitutional? (No, except Section 25(2) as held by High Court-Appeal dismissed.
       Held : The argument advanced on behalf of the appellants that if multi-storeyed buildings are classified into five stories and above as against buildings having less than five floors it would offend the doctrine of equality has absolutely no basis. Apart from the fact that somewhere limit has to be drawn between different types of buildings and if Legislature thinks five floors and above should be subject to tax, no fault can be found with it. It cannot be said that those who live in these kinds of buildings which are subject to taxation upto fourth floor are similar to those who live in the buildings having less than five floors because it appears from the provisions of the Municipal Corporation Act and byelaws thereto certain special amenities have to be provided in the buildings having five floors or more, as noticed by the High Court. Hence, this contention is rejected. (Para 10)
       Held finally : We do not find that there is any substance in the contention based on discrimination between two sets of buildings nor are we impressed with the other argument that there is discrimination because of want of appropriate relationship or nexus between the nature of levy and the classification of the building made under the Act. Therefore, these appeals have no substance and stand dismissed. No costs. (Paras 11 & 12)

JUDGMENT

Rajendra Babu, J.-In these appeals the validity of the West Bengal Multi-Storeyed Building Tax Act, 1979 [West Bengal Act XVII of 1979] (hereinafter referred to as the Act ) is challenged by the appellants.

2. The learned Single Judge of the High Court, who examined the matter in the first instance, rejected all the contentions put forth on behalf of the appellants and declared that the Act was a valid piece of legislation, except in regard to Section 25(2) of the Act which was held to be ultra vires and, therefore, the said Section was declared to be invalid. Against this order appeals were preferred to the Division Bench and the Division Bench affirmed the order made by the learned Single Judge and dismissed the appeals. Hence, these appeals by special leave.

3. The impugned Act imposes a tax on multi-storeyed building which expression is defined under the Act. On an earlier occasion, the West Bengal Multi-storeyed Building Tax Act, 1975 [hereinafter referred to as the 1975 Act ] was enacted in 1975 which also provided for tax on every multi-storeyed building or a part thereon. The validity of the 1975 Act was challenged in several writ petitions filed before the Calcutta High Court wherein the High Court took the view that the 1975 Act applied to all buildings equally in the matter of tax regardless of the cost of construction, their capacity to yield income, their use and their potentially and thus the legislature treated unequals as equals in their essential features as equals in the burden of taxation and held the law to be ultra vires. Thereafter, the Act was enacted in 1979 effecting several changes in the 1975 Act. The definition of the expression owner is now changed and Section 3, which is the charging Section, is substantially altered. These provisions were in challenge before the High Court as is done before us now.

2. The contentions advanced before the High Court on behalf of the appellants are reiterated before us. It is contended that on a reading of the new definition of owner along with the charging Section, the intention of the Legislature is to tax the person in respect of the portion occupied or possessed by him on the basis of the annual value and he is not responsible or liable to pay tax in respect of the portions occupied or possessed by others; that the intention is to assess buildings by parts whether they are occupied by deemed owners or actual owners and the Act contemplates separate assessment and filing of returns by each deemed owner and where there is no deemed owner by the owner himself and as such, owners are not liable for the payment of tax for portions let out or in the occupation of others; that the Act clearly contemplates separate assessments in respect of each part possessed by a deemed owner or the owner, that this is apparent from the definition of "owner" read along with Section 3(3) and Section 5 of the Act; that the unit of assessment changes from the entire multi-storeyed building to individual units occupied by deemed owner or occupier; that the Act seeks to tax every occupier of a building be he the owner or occupier in respect of the portion of the building in his occupation, the tax being on the covered space of such portion; that this being the purpose of the Act, the fact that such occupied covered space is in a multi-storeyed building or in any other building is not a relevant factor for classification; that the substance of the legislation must be ascertained from the relevant provisions of the statute and it is not disputed that the subject of the levy, the nature of which defines the quality of the levy is not to be confused with the measure of the liability, that is to say, the quantum of the tax; that if the levy is to be regarded as one in respect of multi-storeyed buildings and the measure of the liability is defined in terms of the annual value of the floor area occupied by individual owners/occupiers, there must be a nexus between the two indicating

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2002 Supreme(SC) 576

IMPORTANT POINTHigh Court was right in not declaring the whole of West Bengal Multistoried Building Tax Act, 1979 as unconstitutional on ground of alleged discrimination. The Act (except Section 25(2) is valid.

Cases Referred (2)

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IMPORTANT POINT
High Court was right in not declaring the whole of West Bengal Multistoried Building Tax Act, 1979 as unconstitutional on ground of alleged discrimination. The Act (except Section 25(2) is valid.