By the Court.—These two writ petitions question the validity of the house valuation as well as imposition of house tax under U.P. Municipal Corporation Act, 1959 (the Act) by the Nagar Nigam, Varanasi (the Corporation).

THE FACTS

2. Clark Hotel Limited (the Petitioner) is a company incorporated under the Companies Act 1956. It runs hotels in a different parts of the country. It also runs a five star hotel at 20/54-A, the Mall, Varanasi within the municipal limits of the Corporation.

3. The proceeding for the house valuation as well as house tax were taken against the petitioner by the Corporation. Against the order for house valuation, an appeal was filed under Section 472 of the Act. In the appeal, the annual value was fixed at Rs. 55,000/- on 24.2.1978.

4. The Corporation filed an appeal against the aforesaid order. It was dismissed. Thereafter, the writ petition No. 307 of 1979 was also filed by the Corporation that writ petition was dismissed on 23.3.1999.

5. Subsequently, some more rooms and halls were constructed by the Petitioner. A fresh notice was issued against the petitioner and thereafter an order was passed.

6. The Petitioner filed an appeal against the subsequent order of the house valuation. It was dismissed on 9.12.1987. His second appeal was also dismissed on 14.2.1990.

7. The Petitioner filed writ petition No. 5020 of 1990 against the aforesaid orders. It was allowed by Single Judge on 13.2.2004 and the case was remanded back.

8. In pursuance of the order of the Single Judge dated 13.2.2004, the proceedings for reassessment were started. During its pendency, a notice dated 5.7.2006 was issued fixing annual value as well as imposing tax at 25% on the annual value for the period 2003-2004 and 2005-2006 and at 15% for the period 2006-2007.

9. The petitioner filed his objection against the same. However, it was rejected on 12.9.2006 and the annual value was again assessed. The petitioner filed writ petition No. 1504 of 2006 against the same.

10. After determination of the annual value, the tax was also fixed and a demand notice dated 24.12.2007 was sent to the petitioner. The petitioner has filed writ petition No. 40 of 2008 against the same.

POINTS FOR DETERMINATION

11. We have heard Shri BD Madhyan and Shri Tarun Gaur, counsel for the petitioner, Shri Ashok Pandey and standing counsel for the respondents. The following points arise for determination:

(i) Whether Section 174(1)(a) of the Act is discriminatory;

(ii) Whether annual value cannot be fixed without making Rule under Section 174(a) of the Act;

(iii) Whether the reduction in the period for the periodic assessment to two years is illegal;

(iv) Whether the Corporation could not assess the annual value and fix the house tax as there were no elected members;

(v) Whether fixation of annual value is illegal.

Ist POINT: SECTION 174(1)(a)—NOT DISCRIMINATORY

12. Section 174 of the Act as well as Section 140 of the Municipalities Act, 1916 (the Municipalities Act) are titled ‘Definition of ‘annual value’’. Section 174(a) of the Corporation Act provides that the ‘annual value’ has to be fixed on a proportion not below than five per cent on the estimated present cost of erecting the building; whereas, Section 140(a) of the Municipalities Act provides that the “annual value” to be fixed, a proportion not exceeding five per cent on the estimated present cost of erecting the building.

13. The counsel for the petitioner submits that:

Both enactments namely the Act and the Municipalities Act have been enacted by the State of UP;

One, prescribes for calculating annual value at not less than five per cent and the other, prescribes not more than five per cent of value of erecting the building;

This is discriminatory and violates Article 14 of the Constitution.

14. The Act applies to municipal corporations; whereas, the Municipalities Act applies to the municipalities as well as to nagar panchayats. These terms have been adopted from the Constitution.

15. Article 243Q