Municipal Corporation Of Delhi vs Shashank Steel Industries (P) ...
2002 Latest Caselaw 1635 Del

JUDGMENT

S.B. Sinha, C.J.

1. Interpretation of various provisions of the Delhi Municipal Corporation Act (hereinafter referred to as the DMC Act) as regards the liability of the lessee to pay property tax is the question involved in this batch of writ petitions.

2. The order of reference was made by Hon'ble Mr. Justice Mahinder Narain, vide order dated 16.12.1986 differing with the judgment passed in CW 942/80 wherein it was held that even if a lease is not registered, the liability to pay tax would arise.

3. With a view to determine the rival contentions raised by counsel for the parties before us we may notice the fact of the matter from CWP 1336/90.

A deed of lease was executed by the President of India and Mohan Cooperative Industrial Pvt Ltd as the Lesser and Shashank Steel Industries Pvt Ltd (hereinafter referred to as Shashank Steel) as the sub-lessee, respondent No. 1 herein, in terms whereof 1721.25 sq yds of industrial land had been given on perpetual sub lease, w.e.f. 8.2.1997. For the five years of sub lease the rent was payable @ Re. 1/- per annum where after it was enhanced to @ Rs. 402.30 per annum. In terms of the provisions of the said lease, possession was to be delivered to the assessed prior to 1.4.1982 and it had the liability to raise construction within 2 years from the said date. The relevant terms and conditions of the said indenture of lease are as under:

"(5) The sub-Lessee shall, within a period of two years from the twentieth day of February, one thousand nine hundred Eighty one and the time so specified shall be of the essence of the contract after obtaining sanction to the building plan, with necessary designs, plans and specifications from the proper municipal or other authority at his own expense, erect upon the industrial plot and complete in a substantial and workmanlike manner an industrial building for carrying on the approved manufacturing process or industry with the requisite and property walls, sewers and drains and other convenience in accordance with the sanctioned building plan and to the satisfaction of such municipal or other authority.

6(a) The sub-lessee shall not sell, transfer, assign or otherwise part with the possession of the whole or any of the industrial plot in any form or manner, benami or otherwise to a person who is not a member of the Lessee.

4. A plan for construction of building was submitted on 15.6.1984. It was sanctioned on 3.8.1984. Construction of the structures started soon thereafter. By reason of an order dated 29.1.1988 the rateable value (RV) of the plot was determined at Rs. 2400 per annum from 1.4.1982 and composite assessment of land and building was fixed from 18.11.1986 by order dated 1.2.1988 @ of Rs. 299930/- p.a. The dispute is with regard to determination of RV for the period 1.4.1982 to 17.11.1986.

The first respondent does not dispute its liability from 18.11.1986.

It however being aggrieved by and dissatisfied with the said order preferred an appeal before the Additional Judge Delhi and by reason of the impugned order dated 10.7.1989, the said appeal was allowed, inter alia on the ground that no property tax could be levied in Sub-section (1) of Section 120 of the DMC Act.

5. The said order was passed inter alia on the premise that the property tax would be leviable only after the plan is sanctioned and that the building in question was to be constructed on leasehold plot, the first respondent will have no liability to pay property tax till construction is started. In supported of the said contention reliance has been placed on M.C.D. v. Peerless Finance Co. 1987 Rajdhani Law Report 144. The said orders are in question in these writ petitions.

6. Mr. Nandrajog, learned counsel appearing on behalf of the petitioner-MCD would submit that the said provision should be read in its entirety and so read as also keeping in mind the legislative history as also the object and purport for which it had been enacted, a person in whose favor such a perpetual lease is executed would be 'owner' within the meaning of the provisions of the said Act. It is also contended that the Rateable Value of the premises (RV) must be determined having regard to Clause (c) of Section 116 of the DMC Act. The learned counsel would urge that the writ petitioner has several statutory functions to perform whether adequate financial provisions are required to be made and resources therefore are to be generated and imposition of property tax is one of the sources of generating such funds. Learned counsel pointed out that in terms of Clause (1) of Section 113 it is imperative upon the writ petitioner to levy property tax having regard to the fact that all lands and building are subject to tax in terms of Section 116 of the Act. RV has to be determined not only in terms thereof but also in terms of Sub-section (2) of Section 120 of the Act, upon taking into consideration the fact as to whether the land was "capable of being built upon" or not. Mr. Nandrajog would urge that the word capable of being built upon must be construed to mean all lands which come within the purview of the Master Plan or zonal Development Plan as residential area, in relation whereto there does not exist any statutory interdict. Counsel in support of the said contention relied upon. D.G. Gouse Co. v. State of Kerala .

7. Mr. Nandrajog would also argue that perpetual lease would operate as conveyance in fee simple and in that view of the matter Clause (c) of Section 114(1) will apply as it is for the lessee alone to let out the same as under-tenure holder. He would urge that under tenure cannot be equated with tenancy and for the said proposition relied on Arumugham v. Subramaniam AIR 1937 MADRAS 882, and Ali Abbas v. Sher Bahadur Singh . Counsel would submit that incorporeal entity would include tenement hereditament which would in turn mean interest on the interest of land which the owner may enjoy as the owner. Reliance in this connection has been placed on The Industrial Finance Corporation of India Ltd. v. M.C.D. 1996 (1) Apex Decision 535, India Habitat Centre v. MCD and Ors., 1994 (4) Apex Decision 247.

8. Counsel would further contend that Section 120 of the Act must be interpreted, keeping other provisions thereof in mind. In view of the fact, urges the learned counsel that as in terms of lease the lessee has made covenant to pay tax even in equity he is liable therefore.

9. Mr. Jain, appearing for the respondent on the other hand would submit that the lessee is not liable to pay tax having regard to the expression used in Section 116 of the Act inasmuch as the primary liability therefore is upon the superior Lesser or the lessee as the case may be and the liability of the lessee would come in relation thereto only when a lease for a period more than one years is granted in respect of the land in question and thereupon a building is constructed. Mr. Jain, argued that the word "land capable of being built upon" having regard to the liability of the lessee must be construed strictly. Thus, according to Mr. Jain the same would bring within its umbrage all types of inability on the part of the lessee to raise construction thereupon. Mr Jain would contend that the land which does not have road, water, electricity and sewage facilities cannot be land whereupon a building can be constructed.

Drawing our attention to the Words & Phrases, Permanent Edition, Vol. 6 he submitted that the expression 'capable of being built upon' has not been defined even in the dictionaries and thus the same would mean those lands on which construction can lawfully be raised, which according to the counsel, would exclude the following categories:

i) litigation between two neighbour and court injunction, if any, in any lis pending between them;

ii) an interim order for non construction;

iii) unauthorised occupation by a trespasser;

iv) non-grant of no objection certificate by the Lesser.

v) Non grant of no dues certificate by MCD in the absence of which the building department do not accept application for sanction of building plans although such a step has been struck down by Single Bench of this Court in the matter titled C.L. Batra v. MCD .

vi) Urban Land (Ceiling and Regulation) Act 1976 was in force since 1976 up to 22.3.1999 and any person holding land in excess of 500 sq. mts. = 598 sq yds was required to obtain a NOC from the competent authority before his plans could be sanctioned and for this reason also as long as the said NOC is not obtained the plans could not even be submitted.

10. Furthermore, Mr Jain would urge, the other relevant factors for construing the expression land capable of being built upon, as per the said Act, would include the following:

a) Non-passing of the layout plan under Section 313 of the DMC Act.

b) Even if the layout plan is sanctioned, if no arrangement has been made for levelling paving, metalling, flagging, channelling, sewering, draining, considering and lighting street or streets as in the present case.

c) Prohibition as prescribed by Section 220 of the DMC Act (which was omitted by Act No. 67 of 1993 as Delhi Jal Board was formed) which provide for that new premises would not be occupied without the arrangement of water supply which supply is not available in this area till date.

d) Absence of permission to build as prescribed by Section 332 of the DMC Act.

e) Special provisions of the lease deed between the President of India and the lessee and sub lessee about construction to be completed in a certain period as in the present case

f) The lessee may not be having the requisite resources to build.

11. The learned counsel would submit that Union of India as a superior Lesser has no liability to pay property tax in terms of Section 119 of the said Act and if the superior Lesser is absolved from such liability the question of the lessee or the sub-lessee becoming liable therefore would not arise. Drawing out attention to the decision of the Supreme court in the National Grindlay Bank v. Municipal Corporation of Bombay the learned Counsel would contend that the provisions of Bombay Act and the Delhi Act being in pari materia, the said decision would apply on all fours in the instant case.

12. Replying to the contention that even in equity the respondent are bound to pay tax having regard to the covenant in the deed of lease, counsel would contend that the same being governed by the provisions of Government Grants Act, no liability can be fastened upon the sub lessee in respect thereof being not contemplated under the Act. The counsel would contend that Clause 10 of the deed of lease cannot be construed in such a way that the liability would be fastened on the lessee despite the fact that it would not be his statutory liability under the said Act. He would contend that Union of India can recover the tax from the lessee only when it is liable to pay the same. The judgment of this Court in Nehru Place Hotels Ltd. (supra), according to the counsel, does not lay down the correct law. It was further submitted that in any event as the respondents have been not given any notice as provided for in Section 126 of the DMC Act the impugned demand must be held to be bad in law.

13. From the rival contentions as noticed hereinbefore, the following questions arise for our consideration:

a) Whether vacant land held under a perpetual lease is assessable to property tax if the lessee has not commenced construction of a building upon said vacant land?

b) On whom does the incidence of property tax fall in respect of vacant land?

c) What would be the meaning of the expression "capable of being built upon" in Section 116(2) of the DMC Act?

Re: Question No. (a) and (b).

Before adverting to the question involved in this matter we may have a brief overview of the provisions of the statute.

14. Delhi Municipal Corporation Act provides for the creation of municipal fund, as well as revenue and expenditure there from Section 99 provides for construction of Municipal fund which would include all monies received by the Corporation under the Delhi Municipal Corporation Act or any other law for the time being in force.

14. Chapter VIII of the said Act deals with taxation. Sub-section (1) of the Section 113 of the said Act mandates the Corporation to levy taxes which includes property tax whereas in terms of Sub-section (2) of Section 113 taxes specified therein may be levied. Levy of Property tax is imperative, unless it is otherwise exempted.

Section 114 of the Act in no uncertain terms empowers the Corporation to levy tax both on land buildings. It would not make any difference for levy of tax whether title is passed in respect thereof in accordance with law or not. Whenever a perpetual lease is executed undisputedly the same shall be a lease for more than one year although the same might not have been registered at the relevant point of time. Such a question in the instant case is academic inasmuch as the lease takes effect from a retrospective date i.e. date of execution of the lease as and when the same is registered.

Section 115 provide that general tax shall be levied in respect of all lands and buildings subject to exceptions made therein. Section 116 provides for determination of rateable value of lands and buildings assessable to property tax in terms whereof and annual rent at which such land or building might reasonably be expected to let from year to year has a direct nexus with determination of the rateable value of any land or building. Sub-section (2) of Section 116, however, widens the tax net in the sense that in terms thereof the rateable value has been fixed at 5% of the estimated capital value of such land when not only a building has already been erected, but also on the land, which is not built upon and is capable of being built upon and of any land on which a building is in process of erection.

Section 119 of the DMC Act exempts the lands and buildings, which are the properties of the Union, from the property tax as specified in Section 114.

In terms of Section 120, a primary liability would firstly be upon the Lesser, if the land or building is let; if the land or building is sub-let, upon the superior Lesser, and if the land or building is unlet, upon the person in whom the right to let or sub-let the same vests.

15. Section 124 provides for assessment list which is required to be maintained in respect of all of lands and buildings.

Section 331 defines the expression 'to erect a building'. Section 332 prohibits erection of building without sanction.

Section 333 provides for filing of application for sanction by every person who intends to erect a building to the Commissioner. Such a notice shall be accompanied by such documents and plans as may be prescribed.

Section 336 mandates the Commissioner to accord sanction for execution of work unless it contravenes any provision of the Act.

16. Expression used in a Statute, as is well known, must be interpreted keeping in view the purport and object of the Act. By reason of the provisions of the said Act, the Corporation is entitled to assess and recover property tax. Such an assessment has to be based on annual valuation of land and building. Both lands and buildings jointly and severally would be subject matter of taxation at the lands of the corporation.

17. However, as is well known taxing statute should be construed reasonably, fairly and in consonance with justice. There cannot be any intendment in respect of a taxing statute. But it is also equally well settled that whereas charging section is to be construed strictly, the machinery provisions are not to be so construed and when the intention of the legislature is clear the court would not hesitate in construing the machinery provision upon giving a common sense interpretation so that charging section does not fall. (see Mhacinnon Machenzie & Co Ltd v. The Calcutta Municipal Corporation and Ors. , Calcutta Municipal Corporation and Ors. v. Abdul Halim Gaznavi Molla .

19. The questions involved in these writ petitions must be considered keeping in view the aforementioned statutory provision. It is one thing to say that having regard to the non-capability of determining of the ratable value, no actual tax can be levied, but it is another thing to say that no property tax is payable at all. Section 114 of the DMC Act, as noticed hereinbefore, read with Section 147 makes it incumbent upon the Delhi Municipal Corporation to levy tax on lands and buildings, subject of course to the exceptions provided for therein.

20. Although in relation to a perpetual lease, under common law, the concept of 'tenure', but where there exists a statute and a lease is granted in terms of the provisions thereof concept of tenure or under tenure would be foreign. Leases recognized in terms of Section 115 of Transfer of Property Act are (i) lease for a fixed period, (ii) periodic lease, and (iii) lease in perpetuity. Even a lease without a term may be a permanent lease. (See Dinanath Kundu v. Janaki Nath (1928) 55 Cal 435 : AIR 1928 Cal 392, Janaki Nath v. Dina Nath ; Commissioner of Income-Tax v. Visheshwar (1939) 18 Pat 24; Bara Lal v. Bhaju Mian .

21. Even in relation to a perpetual lease, rent can be enhanced. Existence of a forfeiture clause would not make a lease being one not in perpetuity as, such a provision can be made by way of a security for payment of rent.

22. Thus, a land under a perpetual lease although would be assessable to property tax, but its liability thereof would be covered by Section 120 of the Act.

23. Section 120 being a charging section in case of letting out or sub-letting, the primary liability will be of superior Lesser or the Lesser as the case may be. A person can be made liable to pay tax if he is liable therefore. Such liability must be determined strictly in terms of a statute.

24. Article 265 of the Constitution of India clearly postulates that tax can be levied only under a statute. Taxation, as is well known, has three elements, namely, taxable event, assessment and recovery.

25. Having regard to the provisions of the said Act, the Court by reason of a judicial interpretation cannot make a person liable to be taxed although he is not primarily liable therefore. If no tax is leviable upon the lessee or the sub-lessee, the remedy of the Corporation may be to take recourse to such action as is permissible in law. (See Raghuvanshi Pvt. Ltd. and Anr. v. The Calcutta Municipal Corporation and Ors. reported in 1999 (1) CHN 430 and Saturday Club Limited v. Calcutta Municipal Corporation and Ors. reported in 1999 (1) CHN 627).

26. The submission of Mr. Nandrajog to the effect that having regard to the fact that a perpetual lease has been granted, the lessee shall be the person who would be entitled to let and thus come within the purview of Clause (c) of Sub-section (1) of Section 120 of the DMC Act cannot be accepted. Such a contingency would arise only if the land or building is unlet and not otherwise. Keeping in view the fact that the property in question belong to DDA, which authority who has not only executed a deed of perpetual lease, but also has been accepting annual rent, however, small it may be, the transaction retains the characteristics of a lease and thus, in our opinion, Clause (c) of Sub-section (1) of Section 120 of the DMC Act cannot be said to have any application whatsoever in the instant case.

27. Thus, so long the liability of the lessee does not come within the purview of Sub-section (2) of Section 120 of the DMC Act, he is not liable to pay any property tax to the Corporation.

28. Incidence of property tax in respect of vacant land strictly stated would primarily fall on the Lesser or the lessee, as the case may be.

29. Jurisprudentially the concept of "ownership" may be consisting of bundle of rights, claims, liabilities, powers and immunities with regard to the thing owned but thereby the financial liability cannot be fastened on the lessee. The owner is not only a person, who has the proprietary rights or superior rights vis-a-vis persons having inferior rights and may also be a person, who for the time being is receiving or entitled to receive the rent.

30. It may be true that in terms of the provisions of the said Act, notice of assessment is to be given to the owner, but the definition of owner as contained in Section 2(37) of the DMC Act must be read in the context of Section 116 of the DMC Act. Another aspect of the matter may be taken note of in the instant case. A perpetual lease had been executed between the President of India and the Lesser Mohan Cooperative Industrial Pvt. Ltd., as the lessee and the respondent No. 1 as the sub-lessee.

31. The lease money for the first five years was Rs. 1 per year having regard to the retrospective effect given to the said lease and @ 2.5% of the premium paid. The said deed of lease contains the following terms and conditions:-

"5. The Sub-Lessee shall, within a period of 2 years from the 20th day of February one thousand nine hundred and eighty one (and the time so specified shall be the essence of the contract) after obtaining sanction of building plan, with necessary designs, plans and specification from the proper municipal or other authority at his own expense, erect upon the industrial plot and complete in a substantial and workman like manner, an industrial building for carrying on approved manufacturing process or industry with the requisite and proper walls, sewers drains and other conveniences in accordance with the sanction building plan and to the satisfaction of such municipal or other authority.

6(a) The Sub-Lessee shall not sell, transfer, assign or otherwise part with the possession of the whole or any part of the industrial plot in any form or manner, benami or otherwise to a person who is not a member of the lessee.

6(b) The Sub-Lessee shall not transfer, assign or otherwise part with the possession of the whole or any part of the industrial plot to any other member of the lessee except with the previous consent in writing of the Lesser which it shall be entitled to refuse in his absolute discretion.

Provided that.....

10. The sub-lessee shall from time to time and at all time pay and discharge all rates, taxes, charges and assessment of every description which are now or may at any time hereafter during the continuance of the sub-lease be assessed, charged or imposed upon the industrial plot hereby sub-leased or on any building to be erected hereupon or on the landlord or tenant in respect thereof."

32. A bare perusal of the said terms and conditions of the deed of lease would clearly show that the same contains various restrictions on the lessee to have full enjoyment in the property.

33. In the instant case, it is not necessary for us to consider as to how far the benefits arising out of a land would also come within the purview of the definition of 'land'.

34. Mr. Nandrajog has relied upon a decision in Vishal Builders v. M.C.D., Civil Writ Petition No. 17 of 1977 decided on 03.08.1977, 1987 Tax Net II. In that case, a learned Single Judge of this Court inter alia held that once a property is auctioned or leased out by the Union of India as a result whereof subordinate interests are transferred, the property would not remain the property of the Union having regard to the definition of land given in the DMC Act.

35. With respect, in our opinion, the learned Single Judge failed to pose unto himself the correct question. The definition of land is a wider one and that definition is to be construed for the purpose of finding out as to whether any benefit derived out of land would also be subject to the property tax. Such a question would not arise when a deed of lease has been executed. By reason of such a deed of lease, some interests in the land are transferred and once a deed of lease is executed, the charging provision will have to be applied having regard to the status of the parties so as to fix the primary liability under the said Act. We, therefore, are unable to subscribe to the aforementioned view.

36. In terms of the said perpetual lease, the lessee has no right to sell, transfer or otherwise part with possession of any part or whole of the industrial plot in any form or manner, benami or otherwise to any person whomsoever, without the permission of the Lesser who is entitled to refuse to grant such permission, if sought for in its absolute discretion as per Clause 6(b) of the lease deed.

37. The submission of Mr. Nandrajog to the effect that the lessee is liable to pay the tax in equity having regard to the stipulation made in the conveyance deed in this behalf in Clause 10 thereof, cannot also be accepted.

38. A bare perusal of the aforementioned provisions would clearly show that the covenant for payment of tax on the part of the sub-lessee would not make any material difference inasmuch as thereby only the Lesser has been assured to be indemnified and thus the petitioner cannot take any benefit there under.

39. Mr. Nandrajog has relied upon an unreported decision of this Court in C.W.P. No. 633 of 1980 in Nehru Place Hotels Ltd. and Anr. v. M.C.D. and Anr. disposed of on 30.09.1980. In the said decision, with utmost respect, the learned Judge although held that the Lesser is primarily liable, but erroneously proceeded to observe that the same would not mean that the liability cannot be a subject matter of covenant between the Lesser and the lessee. The said claim is as under:-

"The lessee shall from time to time and at all times pay and discharge all rates taxes, charges and assessments of every description which are assessed or may at any time hereafter during the continuance of this lease be assessed, charged or imposed upon the plot hereby demised or on any buildings to be erected thereupon or on the landlord or tenant in respect thereof."

40. By reason of a covenant, the person, who is not liable to pay tax, under a legislative enactment cannot be made liable therefore, particularly when the Corporation in relation to the sub-lessee is a third party and cannot in law be permitted to derive any benefit there from. The said finding also must be held to be contrary to the scope and purport of Section 120(1) of the DMC Act. We, therefore, are of the opinion that in a case where no building has been constructed, the sub-lessee would not be liable to pay the property tax.

Re: Question No. C.

41. This brings us to the question as to when the sub lessee would be liable. The answer to the said would primarily depend upon the expression 'capable of being built upon' contained in Section 116(2) of the Act. The dictionary meaning of the term 'capable' is having general ability or efficiency."

42. It is of wide amplitude. The word 'capable' or the term 'capable of being built upon' has not been defined under the Act. The term 'capable of being built upon' has also not been defined in any dictionary. However, the word 'capable' is defined in the dictionaries as to mean:-

(i) According to Oxford Advanced Learner's Dictionary of Current English, Fifth Edition, 1997, 'Capable' means ' having the ability or quality necessary for doing';

(ii) According to Black's Law Dictionary Sixth Edition, 1995, 'Capable' means 'susceptible; competent; qualified; fitting; possessing legal power or capacity'; and

43. The word 'capable of being built upon' therefore must be assigned the plain meaning i.e. as is used in ordinary parlance, viz. having legal capacity or qualification.

In re Finch & Chews Contracts 1903 A.C. 486 at page 493, it was observed:-

"Having reflected again and again on the phrase 'capable of taking effect' with the aid of counsel's arguments, and such conveyancing experience of my own as could be brought to bear on it, I have come to the conclusion that there is no sound reason for limiting the phrase to what is existing or still possible in fact. To comprehend, no doubt, what is existing or remains possible infact, but it seems to me on a literal and grammatical construction to extend as also to what is allowable in law."

In Bombay Gas Ltd. v. R.N. Kulkarni, , the word 'capable' occurring in Section 33C of the Industrial Disputes Act was construed in reference to the ordinary grammatical meaning.

44. It is not in dispute that prior permission from the Commissioner is required in terms of the provisions of the said Act under Section 332 thereof. Section 340, enjoins a duty upon the Commissioner to grant permission unless erection of building would violate any provisions of law. In terms of the provisions contained in Section 6 to 14 of the Delhi Development Act, 1957, the Master Plan and the Zonal Plans are required to be made. Such zones may be allocated for different purposes.

45. If there exists an approved layout plan having regard to the land uses, construction of a building would be permitted, almost as a matter of course, and thus such a land, in our opinion, would come within the purview of the expression "capable of being built upon."

46. Tax is being levied under the DMC Act in order to enable the Corporation to meet its statutory liabilities. The tax being compensatory in nature, the charging section must, thereof, be given its natural meaning.

47. The submission of Mr. Jain that unless and until the plan is sanctioned, no construction can be made cannot be accepted. Such plan, as noticed hereinbefore, is liable to be sanctioned in terms of the statutory obligation on the part of the Commissioner.

48. It may be true that in a given case, grant of sanction may be delayed, or the person entitled thereto may not like to construct a building having regard to the fact that, the basic infrastructure like water, electricity or sewerage had not been extended, but the Court is not concerned with any individual hardship inasmuch as in such an event, the rateable value may come down but only by reason thereof, the assessed cannot be held to have been discharged of its statutory burden except to the extent indicated hereinabove. In terms of the provisions of the Act, a lessee has a right to construct the buildings if he acquires a land, which is capable of being built upon, but if he does not chose to do so for a long time, the same by itself cannot be a ground for non-levy of tax unless the assessed is able to establish that on account of a genuine impediment, which is beyond his control, no construction on the land could be undertaken.

49. Mr. Jain has strongly relied upon a decision of this Court in Municipal Corporation v. Peerless Gen. Fin. Co. reported in 1987 RLR 144 wherein it has been held:-

"9. It is not as if the respondent would at no point of time become liable to pay the tax on the said land. The term of lease in favor of the respondent is for a period in excess of one year. As when the condition contained in Section 120(2) of the Act are satisfied, then the liability to pay the property tax would be that of the respondent and not of the Govt. Section 120(2) of the Act, inter alia, provides for the payment of property tax in respect of the land where the tenant has built a building. A reasonable construction of the said provision would be that when the building plans are passed and the Lesser or the tenant starts construction thereon, then the liability to pay the tax would arise on that date. It is to be noted that the Municipal fees and taxes are levied primarily in order to augment the resources of the Corporation and other local bodies who are required to provide Municipal services. Therefore, it is an consonance with that policy that, as and when the construction of a building on land commences, the liability to pay the property tax shifts to the tenant who would thereafter be enjoying the Municipal services which are offered by the Corporation."

In the aforementioned decision, the question, which had fallen for consideration does not arise herein. No augment was advanced as regard construction of the words capable of being built upon. The said decision itself states that as and when conditions contained in Section 120(2) are satisfied the liability to pay the property tax would be that of the respondent and not of the Government.

50. A decision, as is well known, is an authority for what it decides and not what can locally be deduced there from. ( See Union of India and Ors. v. Dhanwanti Devi and Ors. and Haryana Corporation and Anr. v.

Jagdamba Oil Mills .

51. We may now consider the other decisions, which have been relied upon by Mr. Jain.

52. In National and Grindlays Bank Ltd. v. Municipal Corporation for Greater Bombay , the primary liability in terms of Section 147 of the Bombay Municipal Corporation Act was that of actual occupier and therein a lease for a duration of less than one year had been executed. However, in that case, the question which arose for consideration was as to whether the Lesser is liable to pay consolidated tax, having regard to the fact as that the building was unauthorisedly constructed. Furthermore, having regard to the provisions of Section 147 of the said Act, it was held that as the land was the subject matter of a lease over which the building had been built, construction of an unauthorized building would not exempt the lesser from its liability. Such is not the position here. A building is liable to be assessed to tax irrespective of the fat as to whether the construction it is authorized or unauthorized. (See Raghuvanshi Pvt. Ltd.'s supra).

53. In The Municipal Corporation of Greater Bombay v. Polychem Ltd. , the principal question related to the construction of Section 154(1) of the Bombay Municipal Corporation Act. It does not appear that in that case also any question arose for consideration of the Apex Court as to whether a lessee is liable to pay tax in respect of a land, which is capable of being built upon.

Thus in our opinion unless there exists any statutory interdict, or a genuine impediment beyond the control of the assessed, the property tax is leviable in respect of a land which is otherwise capable of being built upon meaning thereby which falls within such area/zones of Master Plan and Zonal Development Plan, where construction is permissible.

54. The questions are answered accordingly. The matters may now be considered afresh by the Assessing Officer in the light of this judgment. These Letters Patent Appeals are thus disposed of. However, in the facts and circumstances of the case, there shall be no orders as to cost.