The main legal point established in the judgment is the exclusion of the occupier's share of tax and commercial surcharge while determining the annual value of the premises, in accordance with the provisions of the Calcutta Municipal Corporation Act, 1980.

ORDER :

Calcutta Municipal Corporation (for short ' the Corporation'), appellant herein, has filed this appeal with the leave of the Court against the decision of the High Court at Calcutta in C.O. No. 1889 of 1995 dated 5.2.1999 whereby and whereunder the High Court has reversed the order passed by the Municipal Assessment Tribunal (for short 'the Tribunal') in M.A.Appeal No. 149 of 1991 and re-determined the annual letting value of the property and the consequent tax liability of the owner, respondent herein.

Facts:

2. Respondent is a registered partnership firm and was the owner, of a space measuring about 6053 sq. ft. on the first floor (eastern block) in premises No.1, Crooked Lane, Calcutta (hereinafter referred to as the 'premises') which is a two storied building. Respondent inducted Bank of India as a tenant in respect of the aforesaid space of said premises at a monthly rent of Rs.60,510/-. This amount included the occupier's share of tax and commercial surcharge. The said apportioned share of the said premises became the subject matter of intermediate re-valuation under section 180(2) of the Calcutta Municipal Corporation Act, 1980 (for short 'the Act') for the period commencing from the fourth quarter of 1986-87.

3. The Hearing Officer in his order dated 10th March, 1988 fixed the annual value of the premises at Rs.6,53,720/- (Gross annual rent Rs.60,510/- x 12 = Rs.7,26,120/- (-) 10% statutory deduction under Section 174(1) of the Act), whereas the exact figure would be Rs.6,53,508/- instead of Rs.6,53,720/-.

4. Respondent, being aggrieved, filed M.A.Appeal No. 149/91 before the Municipal Assessment Tribunal, Calcutta (for short 'the Tribunal'). Respondent had claimed the following deductions:

i) Commercial surcharge Rs.1,30,744/-

ii) Half of the total rate on a/c. of occupier's share Rs.1,32,378/-

iii) Maintenance charges Rs. 13,693/-

iv) Electricity charges for common areas Rs. 2,967/-

Rs.2,79,782/-

5. The Tribunal upheld the order of the hearing Officer and dismissed the appeal, inter alia, on the following grounds:

"(i) Under section 2 (20) of the CMC Act, 1980, consolidated rate (now called property Tax) includes surcharge levied on the consolidated rate;

(ii) Commercial surcharge is leviable under sub- section 4 of Section 171 where the building or portion thereof is used for commercial or non-residential purpose at such rate not exceeding 50% of the consolidated rate as the corporation may from time to time determine;

(iii) Under section 193 of the Act, the Consolidated rate is primarily leviable if the land or building is leased, upon the lessor. So, in the instant case, the consolidated rate including the commercial surcharge is payable by the respondent, the lessor.

(iv) Under section 230 (a) of the Act, the person primarily liable may recover from the occupier half of the rate so paid and under sub-section (b) to section 230 the entire amount of surcharge on the property tax from the occupier who uses it for commercial purpose.

(v) So the statute has provided for recovery of a sum of Rs.1,30,744/- on a/c. of commercial surcharge and Rs.1,32,378/- being half of the total due on occupier's share, by the respondent from its tenant;

(vi) Maintenance charges of Rs.13,693/- was found to be payable by the respondent to the promoters irrespective of letting out as also electricity charges of Rs.2,967/-."

6. Being aggrieved by the judgment and order of the Tribunal, respondent filed a petition under Article 227 of the Constitution of India which has been accepted by the impugned order. The High Court has set aside the judgment and order of the Tribunal and determined the annual value of the premises in question as per calculations given below:

(i) Rates paid for the tenant as per tenancy Agreement

a)

b) Commercial Surcharge

Rates - Half of total rates due on Occupier's share Rs.1,30,744.00

Rs.1,32,372.00

(ii) Maintenance expenses Rs. 13,693.00

(iii) Electricity charges for areas occupied by the tenant and for the common areas Rs. 2,9