By the Court.—Vires of Section 174 (1) (a) of U.P. Municipal Corporation Adhiniyam, 1959 has been challenged on the ground of arbitrariness and violative of Article 14 of the Constitution.

2. Declaration of Rule 4, 4-A and 4-B of the Municipal Corporation (Property Taxes) Rules 2000, as amended in 2013 being arbitrary, illegal and ultra vires, the provisions of Adhiniyam has also been sought.

3. Petitioner a private limited Company having its registered office at Tilak Nagar, Kanpur owns a premises No. 33/33, Sardar Patel Marg, Allahabad over which it is running a hotel. With effect from 1.10.1999, the annual rental value of the premises was increased to Rs. 3,61,200/-. However, on appeal filed by the petitioner, said rental value was reduced to Rs. 58,187/-. Again with effect from 1.4.2003, the annual rental value of the premises was enhanced to Rs. 22,48,870/-. Second appeal filed by the petitioner was allowed and the annual rental value was reduced to Rs. 3,68,557/- and accordingly house tax payable by the petitioner was calculated.

4. State of U.P. brought an amendment in the Property Tax Rules 2000 in 2013 categorizing the fixation of the annual rental value on the basis of the location of the building, width of road where building is situated and RCC/non-RCC/Kachha type of construction. Based on the amended Property Rules, Municipal Commissioner, Allahabad finalized the list determining the annual rental value of various locations in district Allahabad.

5. Petitioner received a notice on 15.9.2015 issued by the Tax Superintendent, Zone-III proposing to fix annual rental value of the premises of the petitioner at Rs. 38,62,454/- with effect from 1.4.2015. Objection was filed by the petitioner before the Municipal Corporation seeking an opportunity of personal hearing. On 9.2.2016, Nagar Nigam, Allahabad issued a demand notice for a sum of Rs. 11,32,229.66 which included a sum of Rs. 5,66,114.78 as house tax based on annual rental value of Rs. 51,46,498/-. Further a sum of Rs. 5,66,114.78 was shown in the notice as arrears.

6. Sri Rahul Agarwal, learned counsel for the petitioner, submits that Legislature could not have delegated the power of fixation of multiplier for computing the annual value of a non-residential building to the executive and left it to be fixed by Rules. Fixation of multiplier for computing the annual value being a matter of legislative policy could not have been in law delegated to the State Government. It is further submitted that since Municipal Corporation Adhiniyam fails to provide any guidelines on the basis of which the executive may determine the multiplier for computing the annual value and thus, it confers an unguided and uncanalized power on the State Government to determine the multipliers. Provision in Section 174 (1) (a) providing for calculation of rent of an open area of land separately for determination of the annual value of a building is arbitrary and violative of Article 14 of the Constitution of India. It is also submitted that mandate of Section 174 (1) (b) of the Act cast a duty upon Municipal Commissioner to fix the minimum monthly rate of rent of the building and it does not postulates fixation of rates of the ward-wise of the buildings. The provision made in this regard in the Property Tax Rules for ward-wise rates of rent is de-hors the Act and is illegal and arbitrary.

7. Learned counsel also submits that because classification of the building and land in various groups prescribed in Rule 4-A (2) of the Property Tax Rules being not based on any studies and actual market conditions is wholly arbitrary and without any basis. It is also submitted that land appurtenant in the form of setbacks mandatorily required to be set apart under the provisions of the U.P. Urban (Planning and Development) Act, 1973 and the Building bye-laws, the same cannot be treated to be open area of land and no rental value ought to be ascribed to such a land whereas the same has also wrongly an