TMI Blog1990 (6) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... lessee. The facts of the case, in brief, are these : The main contention of the petitioner/appellant is that, in respect of the properties in respect of which taxes are demanded from the appellant, he was only a lessee and, therefore, in view of section 112 of the Karnataka Municipal Corporations Act, 1976 (in short "the Act"), the primary liability to pay tax Was on the lessor and, therefore, the demand of property tax from the appellant was without authority of law. The above contention was negatived by the learned judge who dismissed the writ petitions. Aggrieved by the said order, the petitioner/appellant has presented these two appeals. In order to appreciate the question of law arising for consideration, it is necessary to set out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and lodging establishment and shall also be at liberty to put up such structure as they may deem profitable in the portion mentioned as schedule "B" hereinbelow .... Clause (12): The lessees shall be at perfect liberty during the period of the subsistence of the lease to continue to do their business of boarding and lodging establishments in the premises but the lessees shall not, without the consent in writing of the lessors, sub-lease in full the whole of the property hereby demised or assign their rights under the lease deed to any other person or persons." As can be seen from the above clauses, the lease was for a period of 20 years in the first instance. According to clause (5), the lessors agreed to pay corporation tax payable on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... POWERS OF TAXATION AND RI APPEALS COMMITTEE : Subject No. TAC 233180-81 : Messrs. Chidambaram and Bros., No. 19/3, Broadway Complex, Kempegowda Road, Bangalore-9. Heard counsel for the appellant. His main contention is that as he is not getting the rent on the basis of which the annual rental value is fixed, from his sub-lessees, he is not in position to pay the taxes himself and he will have to collect extra taxes over and above the rent on which he has leased it out, from his sub-lessees as per section 112(6) of the Karnataka Municipal Corporations Act, 1976. He has also requested that a detailed order may be given so that on that basis he could approach his sub-lessees for giving him the difference. The annual rental value has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said decision, it should be held in the present case also that the primary liability to pay the tax is on the lessor and not on the appellant who is a lessee. In our opinion, the case on hand is clearly distinguishable from the case considered by the Supreme Court as this case falls squarely under sub- section (2) of section 112 of the Act. Section 112 of the Act reads : "Section 112 : Property tax from whom and when payable. (1) Subject to the provisions of sub-section (2), the property tax shall be primarily payable as follows, namely: (a) if the premises are held immediately from the Government or the Corporation, from the actual occupier thereof : Provided that the property tax due in respect of premises owned by the Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the premises vests, if they are unlet. Therefore, if the appellant had taken a building on lease and had sub-let the said building in favour of another person, there would have been force in the contention of the appellant that he would not be primarily liable to pay the tax and that such liability would be that of the lessor. The undisputed facts of this case as stated earlier are that two properties were taken on lease under a lease dated June 1, 1959, and out of them, Schedule "A" property consisted of a building whereas Schedule "B" property consisted of a vacant land on which a petrol bunk and some structures were in existence. According to a clause (6) of the lease deed, the lessor undertook the liability to pay corporation tax on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays Bank Ltd. v. Municipal Corporation for Greater Bombay, AIR 1969 SC 1048, the Supreme Court observed that "it is specifically stated that, admittedly, the present case does not fall under section 146(3)" and, therefore, the primary liability was placed upon the lessor. The present case, however, squarely falls under sub-section (2) of section 112 of the Act and, therefore, the primary liability to pay the property tax on the building in question is upon the appellant. Learned counsel for the appellant submitted that, if it were to be held that the primary liability to pay the property tax on the building in question is on the appellant as he was receiving only a smaller amount of rent that the actual rent which the sub-lessee is receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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