Corporation of Greater Bombay & Anr Vs. Indian Oil Corporation Ltd.  INSC
371 (27 November 1990)
K. Ramaswamy, K. Rangnathan, S.
1991 AIR 686 1990 SCR Supl. (3) 365 1991 SCC Supl. (2) 18 JT 1990 (4) 533 1990
INFO : RF 1992 SC1782 (10)
Municipal Corporation Act, 1888--Sections 3(r), 3(s), 143 and 154 Petroleum
storage tank--Whether building, structure, or land---Exigible to property tax.
and Phrases--'Land', 'building'--Meaning of.
respondent-Oil Corporation took a piece of land on lease from the Bombay Port
Trust for 30 years from February 1961 and put up six oil tanks for storage of
petrol and petroleum products, apart from other structures and build- ings.
the year 1964-65 the appellant-Municipal Corporation fixed a sum as the rateable
value of the installations on the demised property consisting of the buildings,
structures and tanks. The Investigating officer, on objections raised by the
respondent, reduced the rateable value. the rateable value of the tanks being
fixed on the basis of the capacity of each of the tanks.
appeal to the Court of Small Causes as against rate- able value of the tanks,
the Additional Chief Judge found that the tanks fell within the definition of
'land' or 'building' in Section 3(r) and 3(s) of the Bombay Municipal
Corporation Act, 1888 and are liable to property tax under the Act.
Accordingly, the rateable value of the tanks fixed by the Corporation was
further appeal, the High Court allowed the appeal holding that the tanks are
neither structure nor a building nor land under the Act.
appeal to this Court by the Municipal Corporation the question was whether the
storage tanks of petroleum products are "lands" within the meaning of
section 3(r) or "buildings" as defined under section 3(s) of the
Bombay Municipal Corporation Act, 1888 and are exigible to property tax.
Allowing the appeal, this Court,
1. The expression 'building' includes the fabric of which it is composed, the
ground upon which its walls stand and the ground within those walls because the
ground would not have a separate existence, apart from the build- ing. [371G-H]
A tank to be a building must be a structure designed for ï7 3 of inanimate
objects in storehouse or stable for horses shed or a hut etc. within the four
corners of the wails built with masonary or otherwise with ingress or egress.
[372A-B] The word, 'building' must be given its ordinary natural meaning
ascribable to it including the fabric and the ground on which it stands. On a
mere look at the tank, by no stretch of imagination, it could be said to be a
The definition of the word, 'building' is an inclusive definition bringing
within its ambit house, out-house, stable, shed, hut and every other such
structure, whether of masonary, bricks, wood, mud, metal or ajay other material
whatever. [372B-C] The tank does not answer any of the descriptive particulars.
house or building, etc. must be constructed in accordance with the Master Plan
and the Building Regulations conformable to the statutory requirements like draInage/Sewage
regulations. The construction of the tank is not required to be within the
parameters of these regula- tions. Thereby tanks cannot be construed to be a
The structure must be an entity in itself, although not necessarily a building
in itself, adopted to the particular purpose it serves. In its ordinary sense a
structure is something which is constructed by way of being built as is a
building. But method of construction by itself is not con- clusive. Structure
by itself may not be a building but it may be analogous to a building,
outhouse, shed, hut or a stable. Ship is like a floating building but it is nut
a structure. A crane, gentry or a turnable is a structure but is not a
building. Weighing bridge is a structure. Tilting furnaces mains are in the
nature of structure. [378E-F]
definition of 'land' also is of an inclusive definition. Its accompaniments are
land, which is being built upon or is built upon or 367 covered with water;
benefits to arise out of land; things attached to the earth or permanently
fastened to anything attached to the earth and rights created by legislative
enactment over any street. [378H-379B]
the tanks are situated within a plant they would be integral parts of the plant
and get exempted from assess- ment under section 154 of the Act, but there
exist no such ï7 3 adopted consistent not only with the principles of taxation
to make rateable value but also those relating to incometax, wealth-tax etc.
tanks, though, are resting on earth on their own weight without being fixed
with nuts and bolts, they have permanently been erected without being shifted
from place to place. Permanency is the test. The chattel whether is mova- ble
to another place of use in the same position or liable to be dismantled and
re-erected at the later place? If the answer is yes to the former it must be a
moveable property and thereby it must be held that it is not attached to the
earth. If the answer is yes to the latter it is attached to the earth. [382D-E]
petroleum products are being stored through pipes and are taken out by
mechanical process. The operational mechanisation also though relevant, is not
conclusive. The rateable is based on the rent, which the building or land is
capable to fetch. Due to erection of the tanks whether the value of the demised
property had appreciated or not, is also yet another consideration. When the
tanks are erected and used for commercial purposes, the value of the demised
property would get appreciated. The annual letting value is capable of
increase. However, the rate of increase is a question of fact but the fact
remains that the value of the land gets increased by virtue of erection of the
storage tanks. Considering from this perspective it is held that the petroleum
storage tanks are structures or things attached to the land within the
definition of Sections 3(s) and 3(r) of the Act. Thereby they are exigible to
property tax. [382G- 383H] D.C. Gouse & Co. etc. v. State of Kerala & Anr.
etc.,  1 S.C.R. 804; C.I.T. Andhra Pradesh v. Taj Mahal Hotel, Secundrabad,
 1 S.C.R. 168; S.P. Jain v. Krish- na Mohan Gupta & Ors.,  1
SCC 191; S.P. Gupta, etc. etc. v. Union of India & Ors. etc. etc.,  Suppl.
S.C.C. 87; Cardiff Rating Authority and Cardiff Assessment Committee v. Guest
Keen Baldwin's Iron and Steel Company Ltd.,  1 Kings Bench Division 385;
B.P. Refinery (Kent) Ltd. v. Walker (Valuation Officer,),  2 Queen's
Bench Division 305; Shell- 368 Max (B.P. Ltd.) v. Childs (Valuation Officer),
 9 Ryde Rating Cases 182 (C.A.); Shell Max & B.P. Ltd. v. Holvoak,
 1 Weekly Law Reporter 331; Shell-Max & B.P.Ltd. v. Holyoak
(valuation officer),  1 Weekly Law Reporter 188, referred to.
Chowk Spinning and Weaving Mills Co. Ltd. and ï7 3 Ors.,  2 S.C.R. 679;
K.N. Subramaniam Chettiar v.M. Chidambaram Servai,  Mad. 527; Perumal Naicker v. Ramaswamy Kone and Anr.,
 Mad. 346; Chaturbhuj Morarji v. Thomas
J. Bannet & Ors.,  29 ILR BOM. 323; J H. Sinha v. Govindrao. Bhiwaji
& Ors., A.I.R. 1953 Nagpur 224, distinguished.
Law Dictionary, Fifth Edition; Webster Comprehen- sive Dictionary,
International Edition; Stroud's Judicial Dictionary, Fourth Edition; Oxford
Valuation Practice by Bean and Lockwood, Fifth Edi- tion-Referred to.