1979 (9) TMI 189 - SUPREME COURT

Whether determining capital value on the basis of the annual value recorded in the assessment books of the local authority concerned is arbitrary because of the absence of the necessary machinery for its determination?

Whether the law governing the levy and fixation of annual value of buildings in the areas of the local authorities concerned provide the necessary procedure and the machinery for their assessment and final fixation?

Held that:- Rule 4 of the Kerala Building Tax Rules, 1974, provides that the return under sub-section (1) or (3) of section 7, or section 8 of the Act shall be in Form II. Column 2 of that form makes a mention of the location of the building, but not the location of its ground or land, or the value thereof. It refers only to the annual value of the building in column (13) and its capital value in column 7, so that the location of the building, as distinct from the location of its ground, or the value of the ground as such, do not go in for the determination of the annual or capital value of the building.

Section 29 of the Act declares, for the avoidance of doubt, that in fixing the fair rent of a building under section 5 of the Kerala Buildings (Lease and Rent Control) Act, 1965, the rent control court shall not take into consideration the building tax payable in respect of the building under the Act. That has given rise to the argument that the provision is extortionate as it prevents the owner from passing on the liability to the tenant. If the provisions of sections 11 and 18 are read harmoniously it would appear that if an, assessee is entitled to pay the building tax in instalments under the prescription referred to in section 18, he will not be identified to file an appeal if he has paid those instalments as and when they fall due. That is a fair and reasonable view to take of the relevant provisions of the Act, and we hold accordingly. Appeal dismissed.