IMPORTANT POINTS
Building with land appurtenant to it cannot be separated for assessment. For determining annual value for purpose of taxation it has to be taken as one unit.
Section 174(1) and (2) operate in separate field. Both cannot be clubbed for determination of the gross annual rental value of land or building.

JUDGMENT

Abhay Manohar Sapre, J.

1) This appeal is filed against the final judgment and orders dated 28.06.2004 passed by the High Court of Kolkata in C.O. No.368 of 2004 whereby the Single Judge of the High Court allowed the revision filed by the respondents herein, set aside the judgment/order dated 18.11.2002 passed by the Municipal Assessment Tribunal (hereinafter referred to as “the Tribunal”), Kolkata in M.A.A. No.1701 of 1996 and remanded the case to the Tribunal to re-determine the annual value of the premises and also against an order dated 17.08.2005 passed in Review Application being Review Application No. 2963 of 2004 in C.O. No.368 of 2004 arising out of order dated 28.06.2004 passed in C.O. No.368 of 2004.

2) The issue involved in the appeal lies in narrow compass. However, in order to appreciate the short controversy, few relevant facts need mention infra.

3) The appellant is the owner of the premises bearing No. 226/2 situated at A.J.C. Bose Road, Kolkata-700020. It consists of two-storey building and some land appurtenant thereto (hereinafter referred to as "the premises”). This premises is assessed to payment of tax under the provisions of the Calcutta Municipal Corporation Act, 1980 (hereinafter referred to as “the Act”).

4) The question arose while making assessment of the premises for the Assessment Years 1988-89 (3rd quarter) and 1994-95 (3rd quarter) before the Assessing Authority (Hearing Officer), as to what is the proper annual value of the premises and secondly, how it should be determined under Section 174 of the Act for payment of tax on the premises.

5) By two orders dated 22.06.1996, the Assessing Officer (Hearing Officer) determined the valuation of the premises. So far as annual valuation for the Assessment Year (1988-89) (3rd quarter) is concerned, it was done at Rs.59,400/-, whereas so far as it was for the Assessment Year (1994-95) (3rd quarter) is concerned, the same was done at Rs.4,25,600/-.

6) The appellants (assessee), felt aggrieved of the orders of Assessing Officer, filed two appeals before the Tribunal. So far as the order pertaining to the period (1988-89), valuing the premises at Rs.59,400/-was concerned, the appellant filed appeal being M.A.A. No. 1702 of 1996 whereas so far as the order relating to period (1994-95), valuing the premises at Rs.4,25,600/-was concerned, the appellant filed appeal being M.A.A. 1701 of 1996.

7) Both the appeals were heard analogously by the Tribunal and were disposed of by common order dated 18.11.2002. So far as M.A.A. No. 1702/96 is concerned, it was dismissed by upholding the valuation whereas M.A.A. No. 1701/96, was allowed in part wherein the Tribunal reduced the annual valuation made by the Assessing Officer, from Rs.4,25,000/-to Rs.75,400/-. The Tribunal held that the annual valuation of the premises which was made at Rs.4,25,000/-by the Assessing Authority was wrong and should have been done at Rs.75,400/-in accordance with the procedure prescribed in Section 174 (1).

8) The Municipal Corporation, felt aggrieved of the order of the Tribunal, filed revision petition before the High Court. By impugned order, the High Court allowed the revision and remanded the case to the Tribunal to re-determine the annual value of the premises. The High Court held that the Tribunal was not right in making an assessment of the premises by clubbing land and building. According to the High Court, it should have been done separately, i.e., building and land should have been assessed separately for determining their respective annual value under Section 174(1) and (2) of the Act.

9) The owner (assessee), felt aggrieved of the order of the High Court, filed this appeal by way of special leave before this Court.

10) Heard Mr. Amit Sibal, learned senior counsel for the appellants and Mr. L.C. Agrawala, learned counsel for the respondents.

11) Having heard the learned counsel for the parties and on perusal of the record of the case, we are inclined to allow the appeal,