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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Tejinder Singh Dhindsa, Sanjiv Berry, JJ.
Caliber Plaza, Shopkeepers Welfare Society – Appellant
Versus
State Of Punjab & Ors. – Respondents
CWP-4564-2019 (O&M)
Decided On : 22-12-2022
Property Tax - Caliber Plaza (A.C. Market) - Punjab Municipal Corporation Act, 1976, Section 97 - The court discussed the definitions of 'Mall' and 'commercial building' under the notification dated 31.12.2014 and the Punjab Municipal Corporations/Councils Building Byelaws 1997 and 2004. The court held that the premises in question should be treated as a 'commercial building' for the purposes of levy of property tax under the notification dated 31.12.2014.
Fact of the Case:
The petitioner challenged the order treating 'Caliber Plaza (A.C. Market)' as a 'Mall' for property tax purposes under the notification dated 31.12.2014. The petitioner argued that the premises should be treated as a 'commercial building' as it only housed shops selling cloth and did not have facilities like restaurants, health clubs, or pubs.
Finding of the Court:
The court found that the premises should be treated as a 'commercial building' for property tax purposes under the notification dated 31.12.2014, as it did not meet the definition of a 'Mall' which required a range of activities beyond just shops.
Issues: The main issue was whether 'Caliber Plaza (A.C. Market)' should be classified as a 'Mall' or a 'commercial building' for property tax purposes under the notification dated 31.12.2014.
Ratio Decidendi: The court analyzed the definitions of 'Mall' and 'commercial building' under the notification dated 31.12.2014 and the Punjab Municipal Corporations/Councils Building Byelaws 1997 and 2004 to determine the appropriate classification for the premises.
Final Decision: The court set aside the order treating the premises as a 'Mall' and directed that property tax should be levied by treating 'Caliber Plaza (A.C. Market)' as a 'commercial building' under the notification dated 31.12.2014. It also ordered the refund of excess property tax already deposited.
JUDGMENT
Tejinder Singh Dhindsa, J. (Oral) - Challenge in the instant writ petition is to the order dated 28.01.2019 (Annexure P-10) passed by the 2nd respondent i.e. Commissioner Municipal Corporation, Ludhiana treating 'Caliber Plaza (A.C. Market)' situated in the City of Ludhiana as a 'Mall' for the purposes of levy of property tax. A writ of mandamus is prayed for treating the aforementioned Plaza as a 'Commercial Building' instead and to be levied property tax in terms of State Government notification dated 31.12.2014, accordingly.
2. Brief facts which would be relevant for the issue in hand may be set out.
3. Government of Punjab, Department of Local Government in exercise of powers conferred by Sub-Section (1) of Section 97 of the Punjab Municipal Corporation Act, 1976, issued notification dated 31.12.2014 (Annexure P-1) levying tax on land and building w.e.f. 01.04.2014. For purpose of calculation and manner of levying of the tax, cities across the State were categorized as 'A', 'B' and 'C' category. Furthermore, each municipal area in category 'A' was classified in 3 areas i.e. 'Area I' which was to include the posh area; 'Area 2' to include less posh area/developed area and the balance area of the city in question was classified as 'Area 3'.
4. A tabulation reflecting 'USE' of the premises, rates of tax as per classification, notification and category and remarks was furnished in the notification dated 31.12.2014 itself and the relevant extract thereof is reproduced herein:
| USE |
| Rate of tax as per classification and category (in rupees) |
| ||
| Area classification | A category towns | B category towns | |||
| 1 | 2 | 3 | 4 | 5 | 6 |
| Residential Houses | X | X | X | X | X |
| Flats | X | X | X | X | X |
| Commercial buildings including restaurants (except multiplexes, malls, marriage palaces) | Having 100 square feet land or below | Area 1 | 4.00 per square foot | 3.00 per square foot | These rates are for built up area of ground floor. For basement, first floor, other floors and vacant area, the rate will be fifty per cent of the rates specified in column No. 4/5. |
| Area 2 | 2.00 per square foot | 1.50 per square foot | |||
| Area 3 | 1.75 per square foot | - | |||
| Having 1000 square feet land or below but beyond 100 square feet land | Area 1 | 5.00 per square foot | 4.00 per square foot | ||
| Area 2 | 3.00 per square foot | 2.00 per square foot | |||
| Area 3 | 2.00 per square foot | - | |||
| Having beyond 1000 square fee land | Area 1 | 6.00 per square foot | 5.00 per square foot | ||
| Area 2 | 4.00 per square foot | 2.50 per square foot | |||
| Area 3 | 3.00 per square foot |
| |||
| Multiplex, Malls etc. | - | For all areas | 15.00 per square foot | 10.00 per square foot | These rates are for whole built up area having distinct roof and/or partition and for all floors. |
| Hostel | X | X | X | X | X |
| Industrial (Manufacturing Unit), Educational Institutions and godowns | Having 4000 square yards land or below | For all areas | 5.00 per square yard | 4.00 per square yard | These rates are for built up area of ground floor. For basement, first floor, other floors and vacant area, the rate will be fifty per cent of the rates specified in column Nos. 4/8. |
| Having beyond 4000 square yards land | For all areas | 7.50 per square yard | 6.00 per square yard | ||
5. As per averments made in the petition, there are shops within the premises of 'Caliber Plaza (A.C. Market)' situated in the City of Ludhiana which has been categorized as 'A' class city. It has been pleaded that the premises in question fall in 'Area 1' in Ludhiana City.
6. Learned counsel for the petitioner would submit that the shops in the 'Caliber Plaza (A.C. Market)' are confined only to one trade i.e. selling cloth. It is argued that the impugned order has been passed without adhering to the notification dated 31.12.2014 (Annexure P-1) and
AI
The main legal point established in the judgment is the interpretation of the definitions of 'Mall' and 'commercial building' under the notification dated 31.12.2014 and the Punjab Municipal Corporat....
Recreational areas and caretaker’s rooms in residential complexes cannot be assessed for property tax under commercial tariff as they are mandated by law for residential use.
Taxing statutes must adhere strictly to legislative wording without inferring assumptions like floor divisions based on height.
Procedural compliance in tax assessment is mandatory; failure to follow prescribed rules invalidates tax demands.
Point of Law : Entire tax for the period in question was paid by the petitioner as levied by the authority and the same is disputed by the Municipality, it is for the authority to find out as to whet....
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