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Constitutional Petition No. 524 of 1972, decided on 22nd March,

1976.

S. 5-Rental value, assessment of-Rental value of buildings in area not shown to be less than rate of rent fixed for building in dispute-Mere change from very low assessment to proper assess ment, held, does not render revision of assessment unreasonable.

S. 5(a)-Gross annual rent, reduction of-Extent of allowance-Sec tion 5(a) of Act providing gross annual rent to be reduced to extent of an allowance not exceeding 20 % of gross annual rent for furniture let with any such building-No furniture, however, provided by petitioner in a building under assessment-Petitioner held, cannot claim allowance, in circumstance .

(c) West Pakistan Urban Immovable Property Tax Act (V of 1958)-

S. 5-Rental value, assessment of-Exclusion of cost of machinery- Lift' forming part of building, installed essentially for maintaining its functional capability and convenient enjoyment of building not possible without it-Value of such machinery, held, not to be excluded for assessment, in circumstances.

Rehmat Ellahi for Petitioner.

M. Sharif for Respondents.

Dates of hearing: 5tb, 9th and 11th March, 1976.

M. A. RASHID, J.-The petitioners purchased plot bearing No. AMB-3/53 Sarmad Road, Saddar, Karachi and started raising constructions on it. They completed the ground floor sometimes in 1969 and it was assessed by the Assessing Authority under the West Pakistan Urban Immovable Tax Act, 1958, to Rs. 28,320, and a rebate of 15 Y. was allowed. The first and second floors were -completed by the month of April, 1970, and assessment thereof was carried out by an order dated 24th April, 1970. The third, fourth and fifth floors of the building were completed by March, 1971, but no assessment was carried out, according to the petitioner, till 31st December, 1971. The ground floor mainly consists of shops which are rented out by the petitioner to different tenants. The remaining floors are being run as residential hotel by the petitioner himself, but he claims that the second floor which mainly consists of the dining hall has been independently let out at a monthly rent of Rs. 1,130.

In September, 1970, it was realised by the Assessing Authority that the assessment of third, .fourth and fifth floors could be carried out along with the assessment of first and second floors as according to him the construction of these three floors had not been completed after the assessment of first and ground floors. Consequently, he filed an application on 19th September, 1970, to the Director of Excise and Taxation, making a request that the case may be remanded for raising the tax with effect from 1st July, 1970. On this application the Director of Excise & Taxation made the reference to the Director-General, Excise & Taxation, Sind who after issuing notice to the petitioner and having given him personal hereing remanded the case for assessment of the entire building including the ground, first and second floor, vide his order dated 24th July, 1971. In compliance with this order the Assessing Authority re-assessed the ground, first and second floors and made fresh assessment for 4th, 5th and 6th floor, at the following rates:-

An appeal was preferred against. this order which was disposed of by the Director, Excise & Taxation vide his order dated 24th June, 1972. In this order the assessment of the ground floor was not touched. However 1st to 5th floors were uniformly assessed at the rate of 0.70 per sq. ft 6th floor and the stores were respectively assessed at 0.50 and 0.25 per sq. ft. The result was that the total assessment came to R. 1,65,986.80. In revision before the Director General the assessment was revised by reduction of rental value of 3rd, 4th and 5th floors to 0.60 per sq. ft. Thus the total assessment came to Rs. 1, 51,541.00. Present petition challenges these various orders of assessment.

The first ground of attack taken by the learned counsel for the petitioners is that the revision of assessment of the ground floor from roughly Rs. 28,000 to Rs. 48,000, is very excessive whereas section 5 of the Act requires that such assessment should be reasonable. Section 5 reads as under:-

"Ascertainment of annual value.-The annual value of any land or building shall be ascertained by estimating the gross annual rent at which such land, or building together with its appurtenance and any furniture that may be let for use or enjoyment with such building might reasonably be expected to be let from year to year, less . . . . ."

The learned counsel has referred us to the meaning of reasonable' given in Black's Law Dictionary, which defines it as meaning not immoderate' or excessive'; The learned counsel states that the revision from 28,000, to 48,000, is evidently very excessive and could not be termed as moderate. There is no doubt that this increase on the face of it, looks lather heavy. But the question is whether assessment at the rate of Re. 1 per sq. ft. is or is no reasonable in the circumstances of the case. The ground floor has been assessed at this rate. In order to show that the assessment at this rate is' excessive it was necessary to indicate that the rental value of the buildings in the area is much less than that rate, which was not done. Mere change from very low assessment to proper assessment does not render the revisions as unreasonable.

The second ground taken is that no allowance has been allowed under clause (a) of section 5 of the Act. This clause provides that the gross annual rent fixed under this section would be reduced to the extent of an allowance not exceeding 20 % of the gross annual rent "for the furniture let with any such building." In support of his argument the learned counsel relied upon the order dated 23-8-1969 passed by the Assessing Authority which speaks of fittings and fixtures made available to the tenants and which order had, allowed 15 % of rebate on this ground. But unfortunately, howsoever, we may stretch the definition of the word furniture, fittings and fixtures cannot fall under it. Not having provided any furniture to the tenants of the ground floor the petitioner could not claim any allowance under this clause and it has been rightly disallowed by the Director and the Director-General of Excise and Taxation.

The next point taken by the learned counsel is that the Director-General in his order dated 16th September, 1972 has assessed the first and 2nd floors at 0.70 per sq. ft. while 3rd to 6th floor has been assesseed at 0.60 per sq. ft which is the prevailing rate in that area. He insists that the first floor mainly consists of the Dining Hall and, therefore, the assessment is on the high side. The 2nd to 5th floors are all lodging rooms and, therefore, a uniform rate of assessment should have been followed. But we are unable to see any ground to interfere with the discretion exercised by the authority which has not been shown to have been exercised capriciously or arbitrarilys.

Lastly, the learned counsel has contended that the value of the lift provided for the building should have been excluded as is invisaged by the proviso to section 5. The proviso reads as under:-

Provided that in calculating the annual value of any building or land under this section the value of any machinery in such building or on such land shall be excluded."

The learned counsel contends that as the lift falls under the definition of machinery, therefore, its cost should have been excluded while assessing the annual rental value of the building. The word machinery has not been defined in the Act. But, evidently, the proviso refers to a machinery' which does not form part of the building. As an example we may say that if on a land certain machines of saw mill or of no oil expeller or some other such unit is installed then while assessing she annual rental of the land or the building the value of such machinery will have to be excluded. But if there C is machinery installed which is essential for maintaining the functional capability of the building itself then the value of that machinery would not be required to be excluded. A lift is an essential component of a building itself. It would not be possible to conveniently enjoy the use of the building of this type without a lift. The value of such machinery, therefore, cannot be excluded. Lastly, as for the order of remand having been passed on an application being time barred, it is established on record that it was suo moiu exercise of revisional power.

In view of this discussion we find no force in this petition and dismiss it but without costs. Such orders were announced by us on 11-3-1976 and these are the reasons for the same.

M.Y.M. Petition dismissed.

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