Area Committee Nangal Township Vs. Bhakra Management Board, Chandigarh & Ors  INSC
244 (4 August 1999)
M.B.Shah D.P. Wadhwa, J.
question that falls for consideration in these appeals is if the appellant -
Notified Area Committee - was legally correct in assessing the annual value of
row of quarters in one block as a 'building' for the purpose of levying house
tax under the Punjab Municipal Act, 1911 ('Act' for short). This question
arises on the interpretation of the word 'building' in the Act.
is defined under clause (2) of Section 3 of the Act to mean "any shop,
house, hut, outhouse, shed or stable, whether used for the purpose of human
habilitation or otherwise and whether of masonry, bricks, wood, mud, thatch, metal
or any other material whatever and includes a wall and a well".
question crops up in the following circumstances.
Board (Bhakra Management Board) is constituted by the Central Government under
Section 79 of the Punjab Reorganisation Act, 1966. The Board was so constituted
for administration, maintenance and operation of various works as described in
the section. These works included Bhakra dam and reservoir and power houses. For
the construction, maintenance and operation of the works entrusted to the Board
under the Punjab Reorganisation Act, the Board constructed number of
residential houses at Nangal township for providing residential accommodation
to its officers, staff and workers employed in the power houses.
accommodation consisted of different types of bungalows and quarters for the
officers and employees of different categories. Each of the bungalows and
quarters have separate boundary walls and it is a compact unit with distinct
and separate house numbers and allotted to each of the officers and employees
of the Board. Different blocks have row of quarters/ bungalows each adjoining
to one and another but with a separate identification mark and a complete unit
each of the bungalow/quarter has been assessed to the house tax on the basis of
annual value worked out separately for these bungalows/quarters as provided in
Section 3 of the Act. However, the Committee raised annual value for purposes
of house tax for the year 1977-78 treating the entire block as one building and
imposed ad valeram rate of house tax @ 15% of the annual rental value in
accordance with Section 63 of the Act. For the subsequent years also the
Committee raised bills on the Board on similar basis.
Notification dated January
23, 1976 of the Local
Government Department of the Punjab Government issued under clause (a) of
sub-section (1) of Section 242 of the Act, the Government of Punjab imposed
within the limits of the Notified Area Committee, Nangal township a tax payable
by the owner of the building at the rate specified in the schedule. This
schedule is as under :
Description of property Rate of Tax 1.
and lands having annual rental value - (i) not exceeding Rs.840/- (ii)
exceeding Rs.840/- but not exceeding Rs.1,800/- (iii) exceeding Rs.1,800/- No
Tax 12½ per cent 15 per cent Now when the Committee raised bill for house tax
clubbing quarters or bungalows adjoining to each other as one building, the
Board objected to the same contending that each individual quarter/bungalow
occupied by its employees has to be treated as separate and that the building
having annual rental value not exceeding Rs.840/- would be exempt from house
tax. The objections of the Board were rejected by the Committee. The Board
thereafter filed an appeal under Section 84(1) of the Act before the Deputy
Commissioner, Ropar for setting aside and quashing the demand bill and for the
refund of the excess tax recovered from the Board. The Board had made the
payment under protest. This appeal was, however, dismissed by the Deputy
then filed a writ petition in the Punjab & Haryana High Court challenging
the assessment by the Committee. A learned single Judge allowed the writ
petition. He was of the view that each separate residential unit would be
building and would have to be treated as such for the purpose of levying
house-tax and in doing so annual rental value of every separate unit would have
to be taken into consideration. Now it was the Committee that felt aggrieved
and filed Letters Patent Appeal in the High Court.
was dismissed by the impugned judgment and the order of the learned single
Judge was confirmed. Still aggrieved the appellant filed this appeal after
obtaining leave of this Court.
certainly suits the Committee to consider all quarters or bungalows of one
block as one building as that would raise the annual value resulting in higher
amount of house tax as per the schedule above mentioned. It was contended by
Ms. Jaiswal, learned counsel for the Committee, that there is only one building
which has been sub-divided though let out to various persons. She said even
though there were different occupiers, ultimate source of title-holder was the
Board and the Committee was justified in imposing house tax collectively on the
building. She said it was for the Committee to decide if block of quarters
constituted one building or not. Lastly, it was submitted that the Board itself
was not the owner of the building as ownership vested in the State of Punjab
and the Board was merely an occupier of the building which had been given to it
for occupation of its staff and their being one occupier, whole block could be
assessed as one building treating it as one unit.
not think that the Committee is right in its approach. If we may refer to the
definition of the 'building', it means any house used for the purpose of human
habilitation. The term 'house' in the present case would mean a dwelling house
intended for human habilitation. It is not disputed that each quarter or bungalow
is allotted to a separate employee who lives therein with his family.
because some quarters or some bungalows have common wall separating each other
would not mean that that quarter or bungalow ceases to be a house. A house is a
place of dwelling or habilitation. It is difficult to accept the proposition
that quarters in one row having common wall though each separating the other
would mean one building for the purpose of arriving at the annual value. We do
not think that any argument is needed for us to hold that each such quarter or
bungalow for the residence of employees of the Board would fall within the
definition of 'building'.
of the Committee appears to us is rather incongruous. Just to get more revenue,
the Committee could not change its stand and put interpretation on the term
'building' which is incomprehensible. The Committee was not justified in
clubbing all the quarters/bungalows in one block together and term that as
appeals are accordingly dismissed with costs. Judgment of the High Court is
affirmed. When leave was granted by this Court, there was stay of the operation
of the impugned judgment of the High Court. With dismissal of these appeals,
stay stands vacated and if in the meanwhile any excess amount have been paid by
the Board to the Committee, it shall be refunded by the Committee to the Board
within two months.