Professional use of premises cannot be taxed at commercial rates; predominant usage must dictate tax assessments.

JUDGMENT :

SANGEETA K. VISHEN, J.

1. Both the appeals are heard analogously and being decided by this common CAV judgment as much as, the challenge involved in the captioned appeals is common for which, the learned advocates have consented to.

2. Both the appeals are directed against, the orders, both dated 30.04.2007 passed by the learned Small Causes Court, Ahmedabad whereby the Municipal Valuation Appeal no.675 of 2002 as well as Municipal Valuation Appeal no.677 of 2002, have been allowed and the assessment of the premises involved in both the appeals for the year 2002-2003, has been quashed and set aside. The appellant, Ahmedabad Municipal Corporation (hereinafter referred to as “the appellant Corporation”) has been directed to issue fresh bill after applying the appropriate factor F/2 afresh. In Municipal Valuation Appeal no.677 of 2002, direction is to issue fresh bill after assessing the premises as educational establishment.

3. Ms.Jirga Jhaveri, learned Advocate appearing for the appellant Corporation in both the captioned appeals, submitted that the premises in question is a building consisting of ground plus three floors and is being used as an office which, is commercial in nature. It is further submitted that the respondent is using the premises exclusively for his office work and his residential premises is separate. It is further submitted that the buildings are generally classified as residential or non-residential, based on its usage. Even if the classification is as residential, if the building is being used for commercial purposes, it is taxed as non-residential building. It is further submitted that in cases of other professionals namely lawyers, doctors, etc., for a small portion of their residential premises being used for the professional purposes, exception is carved out, subject to the condition that the building is predominantly used for residential purpose with kitchen and the professional is actually residing there. However, in majority of the cases the professionals have separate offices, clinics or dispensaries etc. and hence, they are assessed separately. It is further submitted that therefore, it is necessary and important to ascertain as to whether the building is primarily or exclusively used for non-residential purposes.

3.1 It is submitted that, the premises is totally used for commercial purpose and not for residential purpose. Moreover, some portion of the premises is being rented for residential use and if the say of the respondent is accepted, it is likely to have far reaching effect. It is further submitted that the respondent is using the premises exclusively for professional purpose and the entire usage is commercial in nature and hence, it cannot be considered as a building being used for residential purpose. It is therefore submitted that the learned Judge, has committed a grave error in setting aside the bills issued by the appellant Corporation without considering the fact that the disputed part of the premises is used for commercial purpose. Moreover, the learned Judge has exceeded jurisdiction by quashing the tax bills as per the new formula in force. Thus, the basis on which the bills have been quashed and set aside is erroneous considering the fact that the premises in question is being predominantly used for residential purpose. It is therefore urged that the appeals deserve to be allowed.

3.2 Reliance is placed on the judgment in the case of Ahmedabad Municipal Corporation vs. Kapilbhai Mukundbhai Bhatt reported in 2009 (2) GLR 1210. It has been held and observed that when a premises is exclusively run as an office, it is clearly a non-domestic use and when there is non- domestic use, commercial rates are to be charged as per the judgment of the Apex Court in the case of Chairman Electricity Board and Ors. vs. Shiv Narayan and Anr. (Civil Appeal No. 1065 of 2000), wherein it is held that as the user is admittedly not ‘domestic’ it would fall in the category of ‘commercial and no