M/S Sbpl Infrastructure Ltd vs The Greater Municipal ...
2022 Latest Caselaw 6345 Tel

           THE HONOURABLE SRI JUSTICE M.LAXMAN

     CIVIL MISCELLANEOUS SECOND APPEAL No.24 of 2017

JUDGMENT:

1. The present second appeal has been directed against the

judgment and decree dated 06.06.2017 in M.A.No.136 of 2014 on

the file of the Chief Judge, City Small Causes Court, Hyderabad,

wherein and whereby, the revised assessment order dated

29.03.2014 issued by the respondent herein was upheld and

consequently, appeal was dismissed. Hence, the present second

appeal is at the instance of the appellant.

2. Mr. B. Chandrasen Reddy, learned senior counsel for the

appellant submitted that the main grievance of the appellant is that

in the reassessment proceedings the respondent has not considered

the true plinth area, which alone is taxable. According to him, the

plinth area covered under taxation was more than the sanctioned

plinth area, which is reflected in the approved plan. The respondent

while calculating the plinth area included common areas like lift,

lobby, stair case and cutouts and imposed tax, which is contrary to

Rule 7 of Hyderabad Municipal Corporation (Assessment of Property

Tax) Rules, 1990.

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3. The second grievance put forth by the learned counsel for the

appellant is that the respondent levied tax on the parking area with

effect from 01.04.2005. Whereas, as per new policy, the imposition

of tax on parking areas has come into effect only from 01.10.2007.

Prior to that there was no tax on parking areas. The tax rate for

parking areas is only at Rs.2.00 per sft, but Rs.2.50 per sft was

charged by the respondent, which is contrary to tax law.

4. The third grievance of the appellant is that while taxing the

appellant's premises with regard to tin shed area in the upper fourth

floor, to an extent of 3616 sft, the respondent imposed tax treating

the same as RCC roof at Rs.18/- per sft, whereas the said area falls

under Manglore tilled roof or Asbestos roofed or G.I. roofed

buildings, which is only taxed at Rs.1.40 per sft, in terms of

proceedings dated 01.02.2008 issued by the respondent.

5. The fourth and last grievance of the appellant is that remission

in terms of Section 232 of GHMC Act, 1955 on the tax for the period

unoccupied was not considered and such period was included for the

purpose of imposing tax. It is submitted that permission to run

three screens were granted on 28.01.2006 and permission for other

two screens was granted in the month of June, 2010, but tax was

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imposed on all five screens for the period starting from 01.10.2005.

Therefore, the appellant is entitled to tax remission up to half of the

amount taxed.

6. According to the learned counsel for appellant all the above

aspects were not considered by the Court below while disposing of

the appeal and the impugned judgment and decree suffers from

illegality.

7. Mr. K. Siddhartha Rao, learned standing counsel for

GHMC/respondent, contended that while taxing the area, the plinth

area was taken with reference to sanctioned plan only and there was

no deviation from the sanctioned plan. In the sanctioned plan,

cutout area was already excluded and same was excluded while

imposing the tax. He also submitted that there is no question of

common area in a single owner building. He further contended that

stair case area and area used for lift and lobby were included in the

plinth area, in terms of definition of plinth area as defined by Bureau

of Indian Standards in 1966.

8. Learned standing counsel for respondent has fairly admitted

that tax on parking area has come into effect from 01.10.2007 only

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and in the reassessment order it was wrongly assessed from

01.04.2005 to 30.09.2007.

9. It is also the contention of the learned standing counsel for

respondent that tax for the upper fourth floor was based on

sanctioned plan. As per sanctioned plan, upper fourth floor was

sanctioned with RCC roof. He submitted that the respondent had no

evidence as well as information that the said roof was built with tin

shed.

10. Learned standing counsel for respondent contended that there

is no separate tax registration for three screens and two screens and

tax assessment was done for all five screens as well as the parking

area. When one part of the property is liable for the tax, merely

because other part of the property is vacant or unoccupied, it cannot

be excluded for the purpose of taxation.

11. In the light of the above submissions made by both parties the

following point emerged for consideration before this Court:

"Whether the impugned judgment and decree of the Court below suffers from any illegality, so as to raise the question of law, on account of non consideration of various issues raised?"

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Point:-

12. There is no dispute that the tax is levied on the annual rental

value of the building which is fixed on the basis of plinth area of the

building. The word 'plinth area' is not defined under Tax Laws and

GHMC Act, 1955. Therefore, we have to fall back to general

definitions given under Bureau of Indian Standards in the year 1966

and the same is being followed in calculating the plinth area and

carpet areas. According to the said definition, plinth area includes

carpet area, wall area, lift, shaft openings etc. Further, plinth area

also includes stair case, protected open verandah and balcony

protected by projection. If the said definition is adapted, the

contention of the learned counsel for appellant with regard to

inclusion of stair case, lift and lobby areas, has not merit. Therefore,

the same is rejected.

13. It is also contended by the learned counsel for appellant that

while calculating the plinth area, the cutout areas were included and

same is disputed by the learned standing counsel for respondent. It

is not in dispute by the respondent that plinth area is with reference

to the sanctioned plan only. It is also contended that in the

sanctioned plan cutout areas were excluded. The evidence from the

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appellant before this Court is not clear that cutout areas were

included. However, it is made clear that while taxing plinth area the

cutout area has to be excluded in terms of sanctioned plan. This

was not considered by the Court below. With this clarification, this

contention is answered.

14. Coming to the second grievance, it is not in dispute that prior

to 01.10.2007 there was no tax on parking area. From 01.10.2007

only parking tax is imposed at Rs.2.00 per sft. In the present

assessment proceedings, the parking area tax was imposed from

01.04.2005 to 30.09.2007. Therefore, the collection of Rs.2.00 per

sft from 01.04.2005 to 30.09.2007 is not tenable and the same is

liable to be set aside.

15. The third contention of the learned counsel for appellant is that

the fourth upper floor was covered with tin shed, which falls under

category of Manglore tilled roof or Asbestos roofed or G.I. roofed

buildings, in terms of notification proceedings dated 01.02.2008 and

under that category tax payable is only Rs.1.40 per sft. The tax per

sft for RCC roof building was Rs.18.00 per sft. It is not in dispute

that in the present case the sanctioned plan contains upper fourth

floor and lower fourth floor. The dispute is regarding the upper

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fourth floor. According to the appellant, upper fourth floor is covered

with tin shed roof and there is no RCC roof. According to

respondent, the sanctioned plan only contains RCC roof and not tin

shed coverage. It is also not in dispute that the upper fourth floor

was treated as RCC roof, as per the reassessment made in the

impugned assessment order. There is no evidence placed before this

Court to show that the upper fourth floor is covered with tin shed

roof. On the contrary, the sanctioned plan shows that the upper

fourth floor contains RCC roof. This aspect requires reconsideration

by the respondent. If the assessment authority i.e., the

Commissioner, GHMC, Hyderabad on re-inspection finds that upper

fourth floor is covered with tin shed roof, even though the sanctioned

plan was obtained for RCC roof, it shall be treated as tin shed, as

there is no RCC roof. Therefore, reassessment in this regard

requires to be reconsidered.

16. The last grievance raised by the learned counsel for appellant is

that the appellant is entitled for tax remission with regard to period

unoccupied. In order to answer the said grievance, it is relevant to

refer to Sections 216 and 232 of GHMC Act, 1955 which read as

follows:

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'Section 216: Treatment of property which is let to two or more persons in separate occupancies.

(1) When any building or land is let to two or more persons holding in severalty, the Commissioner may, for the purpose of assessing such building or land to the property taxes, either treat the whole thereof as one property, or, with the written consent of the owner of such building or land, treat each several holding therein or any two or more of such several holdings together, or each floor or flat, as a separate property. (2) When the Commissioner has determined to treat all the several holdings comprised within any one building or land under this section as one property, he may subject to any general conditions which may, from time to time, be specified by the Standing Committee in this behalf, at any time not later than seven days before the first day on any half-year or quarter-year, as the case may be, for which an instalment of general tax shall be leviable in respect of the said property, sanction a draw-back of one-fifth part of the general tax so leviable.

(3) Every person who applies for a draw back under sub- section (2) shall furnish to the Commissioner full and correct information regarding the property in respect of which the claim for drawback is made and the several holdings comprised therein in such form and in such particulars as may be required by the Commissioner in accordance with general conditions specified in this behalf by the Standing Committee.

Section 232: Refund of property taxes for vacancies. When any building or land or any portion of any premises which the Commissioner has treated under section 216 as a

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separate property has been vacant for not less than ninety days the Commissioner shall, subject to the provisions hereinafter contained, refund the property taxes, if any, to a maximum of one half of the amount paid in respect of such taxes for the number of days that such vacancy lasted.'

17. A reading of Section 232 of GHMC Act, 1955 indicates that

when the Commissioner treats any building or land or portion of any

premises as separate property in terms of Section 216 and if such a

separate property is vacant for not less than 90 days subject to other

provisions, the assessee is entitled for tax rebate of one half of

amount paid in respect of tax levied for the period unoccupied.

18. Section 216 enables the Commissioner to treat one whole

building or land as one property for the purpose of tax or he can also

treat each several holding therein or any or two or more of such

several holdings together or each floor or flat as separate property.

This means if a property liable for assessment contains several

holdings it is the discretion of the Commissioner to treat the property

as whole or severally. If one of the severally treated property is

vacant in terms of Section 232, then only such property becomes

eligible for remission. In the case, where the property is treated as

whole, if any one out of whole holding therein is vacant and if, other

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holdings are occupied, then the assessee is not entitled for benefit

under Section 232 of GHMC Act, 1955.

19. In the present case, the assessment is made in respect of five

screens and parking area. It is the grievance of the appellant that

three screens were granted permission on 28.01.2006 and the

balance two screens were granted permission in the month of June,

2010. However, tax was levied on all five screens from 01.10.2005.

Hence, the appellant is entitled for remission.

20. The appellant is entitled for such remission benefit, if three

screens and two screens were treated separately as separate

property for the purpose of tax, in terms of Section 216 of GHMC

Act, 1955. In the present case, for the purpose of taxing, all five

screens and parking area was taken as whole unit. In a whole unit,

when one unit is used and other units are vacant, the benefit under

Section 232 of GHMC Act, 1955 does not apply. Therefore, this

contention of the appellant is rejected.

21. In the light of the above observations, this second appeal is

liable to be allowed in part.

22. In the result, the second appeal is partly allowed as follows:

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a. The reassessment order dated 29.03.2014 with reference to

fixing of collection of tax on parking area from 01.04.2005 to

30.09.2007 is set aside.

b. The respondent is directed to inspect and reconsider the

assessment order dealing with upper fourth floor area covering 3616

sft. If on inspection, it is found that the upper fourth floor is covered

with tin shed roof and not RCC roof, then the respondent shall

impose tax with reference to tin shed i.e., with whatever rate of tax

that was prevailing during the relevant period of assessment. The

above said inspection and reconsideration shall be done by giving

prior notice and information to the appellant.

c. The rest of the findings of the impugned reassessment order

are confirmed.

d. There shall be no order as to costs. Miscellaneous petitions, if

any, pending, shall stand closed.

______________ M.LAXMAN, J Date: 02.12.2022 GVR