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Civil Appeals Nos. 164 and 165 of 1970, decided on 30th November 1971.
(On appeal from the judgment and order of the High Court of West Pakistan, Lahore, dated the 22nd July 1967, in Civil Revision No. 318 of 1961 read with Civil Revision No. 319 of 1961).
City of Lahore Corporation Act (XV of 1941),
Ss. 107 & 118 Assessment of annual value‑Annual value of a Hotel‑Could not be fixed (in view of S. 107) on basis of "Trade Earnings"‑Correct basis of assessment would be annual rent which a hypothetical tenant would pay for letting building together with furniture etc. Assessment made, opposed to provisions of S. 107‑Appealable under S. 118.
Abdullah Peer Muhammad and others v. Karachi Municipal Corporation arid others P' L D 1971 S C 131 ref.
Muhammad Nazar Khan, Advocate‑on‑Record for Appellant.
Sheikh Abdur Rashid, Senior Advocate Supreme Court (Malik Muhammad Akbar, Advocate Supreme Court with him) instructed by Ejaz Ahmad Khan, Advocate‑on‑Record for Respondent.
Date of hearing : 30th November 1971.
The subject‑matter of these appeals is assessment of annual value of Faletti s Hotel, Lahore, by the Lahore Municipal Corporation, for the years 1955‑56, 195(‑57, 1957‑58, and 1958‑59.
The assessments made by the Assessor were set aside by the District Judge, Lahore, on appeals filed by the Associated Hotels of India Limited, proprietor of the Faletti's Hotel, but on further revision petitions filed by the. Corporation, a learned Judge of the High Court held that no appeal lay to the District Judge under section 118 of the Lahore Municipal Corporation Act as the dispute related to quantum of tax payable by the assessee and did not involve the basis or principle on which the assessments were made.
Leave to appeal was granted to consider correctness of the interpretation placed by the High Court on section 118 ;which provides for an appeal from the order of the Assessor, if any dispute arises as to the liability of any land or building to assessment or as to the basis or principle of assessment.
The assessor determined the annual value on the basis of "Trade Earnings" which according to the appellant was repugnant to the provisions of section 107 which provides that annual value of any building shall ‑be deemed to be the gross annual rent at which such building together with its appurtenances and any furniture that may be let for use or enjoyment therewith might at the 'time of assessment reasonably be expected to let from year to year.
In similar cases Abdullah Peer Mohammad and others v% Karachi Municipal Corporation and others (P L D 1971 S C 131) arising under tile City of Karachi Municipal Act, which is in pari materia with the City of Lahore Corporation Act it was held‑that annul value could not be fixed on the basis of "Trade: Earnings" and that the correct basis of assessment was the annual rent which a hypothetical tenant will pay for letting the building together with furniture, etc.
The basis on which the disputed assessments were made by the assessor was thus opposed to section 107 of the City of Lahore Corporation Act and an appeal lay under section 118 from his orders to the District Judge. The High Court was thus wrong in coming to the contrary conclusion.
Mr. Abdul Rashid, appearing for the Corporation, conceded that the construction placed by the learned. Judge of High Court on section 118 of the City of Lahore Corporation Act was incorrect and desired that the appeals be allowed and the cases remanded to the Assessor for re‑assessing the annual value in accordance with the dictum of the Court in Abdullah Peer Mohammad and others v. Karachi Municipal Corporation and others with the exception that under the City of Lahore Corporation Act, value of furniture is to be included in the annual value while in the Karachi cases the value of furniture was to be excluded from the annual value.
The appeals are allowed and the cases remanded to the Assessor for re‑assessment of annual value for the aforesaid years in accordance with law. There will be no order as to costs.
Appeals accepted.
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