By the Court.—Heard Sri Manish Goyal and Sri Vishnu Pratap Singh, learned counsel for petitioners and Sri Satyam Singh, Advocate for Nagar Nigam.

2. Rent list dated 30th May, 2015 published by Nagar Nigam determining rate under Section 174(1)(b) of Nagar Nigam Adhiniyam, 1959 (hereinafter referred to as ‘Act, 1959’) read with Rule 4A & 4B of Uttar Pradesh Municipal Corporation (Property Taxes) Rules, 2000 (hereinafter referred to as “Rules, 2000”) for assessment of annual value of buildings for determining House Tax and Water Tax has been challenged on the ground that said determination has been made in violation of procedure prescribed in the Rules read with Section 174 of Act, 1959.

3. With the consent of parties, for the purposes of reference of pleadings, Writ Tax No. 831 of 2015 is taken as the leading case.

4. Brief facts sated therein are that petitioners are residents of Bareilly. Respondent, Nagar Nigam, Bareilly is a Municipal Corporation constituted under Act, 1959 and governed by various provisions there under.

5. Under Section 173 Nagar Nigam is empowered to levy different kinds of “Property Tax” enumerated therein vide sub-section (1) as under :

“(a) a general tax on a graduated scale;

(b) water tax in areas where water is supplied by Corporation;

(c) drainage tax in areas provided with sewer system by Corporation;

(d) a conservancy tax in areas in which Corporation undertakes collection, removal and disposal of excrementitious and polluted matter from privies, urinals and cesspools.” (emphasis added)

6. Sub-section (2) of Section 173, states that taxes under sub-section (1) shall be levied on “annual value” of building or land as the case may be. A proviso inserted in sub-section (2) by U.P. Act No. 17 of 1999 provides minimum and maximum rate of taxes leviable by Corporation and reads as under :

“Provided that the aggregate of the property taxes shall in no case be less than 22 per cent and not more than 32 per cent of the annual value of the building or land or both assessed to such taxes, so however, that the general tax shall not be less than 10 per cent and not more than 15 per cent, the water tax shall not be less than 7.5 per cent and not more than 12.5 per cent, the drainage tax shall not be less than 2.5 per cent and not more than 5 per cent and the conservancy tax shall not be more than 2 per cent of the annual value.” (emphasis added)

7. Since “Property Tax” under Section 173 is founded on “annual value” of buildings or land, Section 174, defines “annual value” and reads as under.

“174. Definition of “annual value”.—(1) “Annual value” means -

(a) in the case of railway stations, colleges, schools, hostels, factories, commercial buildings, and other non-residential buildings, a proportion not below 5 per cent, to be fixed by rule made in this behalf of the sum obtained by adding the estimated present cost of erecting the building less depreciation at a rate to be fixed by rules, to the estimated value of the land appurtenant thereto; and

(b) in the case of a building or land not falling within the provisions of clause (a), twelve times the value arrived at on multiplying the carpet area of the building, or the area of the land, by the applicable minimum monthly rate of rent per square foot of the carpet area in the case of building or the applicable minimum monthly rate of rent per square foot of the area in the case of land, as the case may be, and for this purpose the minimum monthly rate of rent per square foot shall be such as may be fixed once in every two years by the Municipal Commissioner on the basis of the location of the building or the land, nature of the construction of the building, the circle rate fixed by the Collector for the purposes of the Indian Stamp Act, 1899 and the current minimum rate of rent in the area for such building or land and such other factors, and in such manner, as may be prescribed:

Provided that where the annual value of any building would, by r