JUDGMENT - KHANDEPARKAR R.M.S., J.:---Heard the learned Advocates for the parties. Perused the records.

2. The petitioners are challenging the orders and the notices issued by the respondents in relation to demand of tax as well as the warrant of attachment pertaining to the property of the petitioners as well as the order of cancellation of exemption from payment of property tax on two grounds, namely, that the rateable value has been assessed in contravention of the order of the Apex Court in the matter of (The Municipal Corporation of Greater Bombay v. M/s. Polychem Ltd.)1, reported in A.I.R. 1974 S.C. 1779, in as much as the same is on the basis that the land is under construction and not a vacant land, and secondly, that the exemption from payment of tax has been revoked, firstly, in contravention of the basic principles of natural justice, and secondly, that the same is contrary to the provisions of law as well as the ruling of the Apex Court in the matters of (Christian Children Fund Inc. v. Municipal Corporation of Delhi and others)2, reported in 1994(4) S.C.C. 337, and (Christ The King Cathedral v. John Ancheril and another)3, reported in 2001(6) S.C.C. 170, and it is also challenged on the ground that even the educational cess is not payable by a charitable Trust and the petitioner being a charitable trust is not liable to pay the same and in that regard reliance is sought to be placed in the decision in the matter of (The Municipal Council, Ahmednagar v. Bhaskar Pandurang Hivale)4, reported in 1995(1) Bom.C.R. 328. The demand for the tax as well as the order pertaining to the rateable value is sought to be justified on the ground that the authorities have taken into consideration the vacant land and not the land under construction, and secondly, that the old building having been demolished and the new building yet to be completed and yet to be occupied by the petitioners, presently the land is not in occupation and use of the petitioners, and therefore, the petitioners are not entitled to claim exemption from tax under section 143 of the Mumbai Municipal Corporation Act, 1888, hereinafter called as "the said Act".

3. The law on the point of fixation of the rateable value in relation to the land under construction is well-settled by the decision of the Apex Court in the case of The Municipal Corporation of Greater Bombay v. M/s. Polychem Ltd. (supra) wherein the Apex Court has held as under:---

"The abovementioned authorities of this Court, which were @ page-S.C. 1787 cited before us, enable us to hold that the mode of assessment in every case must be directed towards finding out of annual letting value of land which is the basis of rating, of land and, by definition, "land" includes land which is either built upon or has been built upon. Nevertheless a reference to the provisions of the Act shows that, after a building has been completed, the letting value of the building, which becomes part of land, will be the primary or determining factor in fixing the annual rent for which the land which has been built upon "might reasonably be expected to be let from year to year". All that section 154 seems to contemplate, by mentioning "land or building", is that land which is vacant or which has not been built upon may be treated for purposes of valuation on a different footing from land which was actually been built upon. But, relevant provisions of the Act do not mention and seem to take no account, for purposes of rating of any building which is only in the course of being constructed although section 3(r) of the Act makes it clear that land which is being built upon is also "land". Hence, so long as a building is not completed or constructed to such an extent that atleast a partial completion notice can be given so that the completed portion can be occupied and let, the land can, for purposes of rating, be equated with or treated as vacant land. It is only when the building which is being put up is in such a state that it i

Click Here to Read the rest of this document