Harilal Kania, Kt., C.J.
1. This is an appeal from a judgment of the High Court of Judicature at Fort William in West Bengal. The material facts are these.
2. Premises No. 4, Diamond Harbour Road, which is within the municipal limits of Calcutta, comprise 69 bighas, 10 cottas, 8 chittacks and 18 square feet of land with buildings thereon. The respondents who are the Governors of St. Thomas' School are the owners of the land and of the buildings which were constructed thereon before April 1942. Those premises have been assessed to consolidated rates under Section 127(6) of the Calcutta Municipal Act. An assessment at the general six yearly re-valuation was made in 1938-39. Unless re-valued in the interval that would remain in operation till December 31, 1944.
3. In April, 1942, the said premises were requisitioned, under Rule 70 (Rule 75-A of the Amended Rules) of the Rules made under the Dafence of India Act, for the purposes of the Government of the Federation, and possesion was taken by the Central Government on April 12, 1942. A memorandum of agreement between the respondents and the Governor-General in Council was executed on February 26, 1943. It recited' that the immoveable property, particulars whereof were set out in the schedule thereunder, had been requisitioned under the Defence of India Act, 1939, and the Rules framed thereunder, and that on April 12, 1942, possession was taken under the authority of the Government and that as the owners had represented that all compensation in respect of the said property was payable to them and to no other person, it was mutually agreed to settle the amount of compensation at Rs. 4,500 per month with effect from April 12, 1942, so long as the Government should remain in possession thereof and the requisition continued. It was further stipulated that except an advance of Rs. 5,000 the owners were not to claim or be entitled to any other compensation in connection with that requisition. Clause 8 provided as follows :
The owners shall meet and pay the revenue, rent, Municipal taxes and all other outgoings relating to the said property whether payable by the owners or the occupier thereof.
4. The schedule was in these terms:
Premises No. 4, Diamond Harbour Road, St. Thomas' Girls' School situated in the city of Calcutta.
5. Thereafter the Central Government erected several buildings on the premises at a cost of about Rs. 3 lakhs. In the last quarter of 1944-45 there was an intermediate re-valuation under Section 131(c) and (d) of the Municipal Act and an enhanced amount was imposed on the premises by the appellants from the first quarter of 1944-45 up to the third quarter of that year. This intermediate assessment is not the subject of the proceedings in this appeal.
6. After this intermediate re-valuation, the Central Government put up further structures at an additional cost of about Rs. 50,000. At the general re-valuation made under Section 131(1) of the Municipal Act in the last quarter of 1944-45, the cost of all the additional structures erected by the Central Government, of the total value Rs. 3,50,000, was taken into account and the annual value under Section 127(b) of the Municipal Act was determined at Rs. 93,370. The respondents objected to this assessment before the Chief Executive Officer of the appellants. The Deputy Executive Officer reduced the valuation of the land, with the result that the annual value was reduced to Rs. 77,873. He rejected the respondents' contention that the value of the buildings put up by the Government should be excluded in the re-valuation. From that decision an appeal was riled in the Court of the Small Causes under Article 144(1) of the Municipal Act. That Court accepted the contention of the respondents and held that the structures put up by the Government were exempt from Municipal taxes and therefore should not be included in the valuation. The Court thus reduced the annual value to Rs. 60,374. The Court rejected the contention of the respondents that the whole assessment should be set aside. From that judgment an appeal was preferred by the Corporation to the High Court. Pending that appeal, in Gov.-Gen. of India v. Corporation of Cal. (1947) 52 C.W.N. 173 a Division Bench of the Calcutta High Court decided that Section 154 of the Government of India Act applied to buildings constructed under similar circumstances in that case and the proviso was not applicable. Treating that decision as binding, the Division Bench, which decided the appeal in the present case, dismissed the appellants' appeal. As the case involved an interpretation of Section 151 of the Government of' India Act, 1935, the High Court however granted a certificate under Section 205(2) of that Act. The appellants have therefore brought this appeal to this Court.
7. The relevant portion of Rule 75-A of the Defence of India Act runs as follows :
(1) If in the opinion of the Central Government or the Provincial Government, it is necessary or expedient so to do for securing the defence of British India, public safety, the maintenance of public order or the efficient prosecution of the war, or for maintaining supplies and services essential to the life of the community, that Government may by order in writing requisition any property, moveahle or immoveable, and may make such further orders as appear to that Government to be necessary or expedient in connection with the requisitioning....
(2) Where the Central Government or the Provincial Government has requisitioned any property under Sub-rule (1), that Government may use or deal with the property in such manner as may appear to it to be expedient, and may acquire it by serving on the owner thereof, or where the owner is not readily traceable or the ownership is in dispute, by publishing in the official Gazette, a notice stating that the Central or Provincial Government, as the case may be, has decided to acquire it in pursuance of this rule....
(4) Whenever in pursuance of Sub-rule (1) or Sub-rule (2) the Central Government or the Provincial Government requisitions or acquires any moveable property, the owner thereof shall be paid such compensation as that Government may determine:
Section 154 of the Government of India Act, as adapted by the India (Provisional Constitutional) Order, 1947, runs as follows:
Property vested in His Majesty for purposes of the Government of the Dominion shall, save in so far as any Dominion law may otherwise provide, be exempt from all taxes imposed by, or by any authority within a Province or Acceding State :
Provided that, until any Dominion law otherwise provides, any property so vested which was immediately before the commencement of Part III of this Act liable, or treated as liable, to any such tax, shall, so long as that tax continues, continue to be liable, or to be treated as liable, thereto.
In the Calcutta Municipal Act, 1923, Chapter X deals with taxation. Section 124 permits a consolidated rate not exceeding 23 per cent, of the annual valuation determined under that Chapter to be imposed by the Corporation upon all lands and buildings in Calcutta for the purposes of that Act.
8. In the petition of appeal filed by the appellants they urged grounds, in addition to the interpretation of Section 154 of the Government of India Act, 1935. They contended that the Government was the absolute owner of the materials and not of the buildings, as there could be no ownership of buildings without the ownership of the land on which the buildings were erected. They further contended that as the additional structures were linked with the premises and formed one unit for the purposes of assessment, the proviso to Section 154 of the Government of India Act rendered the additional structures liable to be taxed. We permitted counsel for the appellants to urge those grounds under Section 205(2) of the Government of India Act, although they were not covered by the certificate granted by the High Court.
9. The main arguments of the appellants is that the buildings put up by the Government cannot be separately assessed because the land on which the buildings stand is not vested in the Government. It was therefore argued that as the valuation is of the whole area, as one unit, the exemption given to the Crown lands under Section 154 of the Government of India Act cannot exclude the new structures from assessment. It was argued that the order of requisition legalised what would otherwise have been a trespass and there was no lease in favour of Government so as to give to the Government any interest in the land on which the new structures were put up. It was therefore contended that Section 154 of the Government of India Act was not applicable. In the alternative it was contended that the proviso would be applicable because the unit of re-valuation and assessment was the whole area, and as that unit was already taxed before April 1937, the additional structures should be included in the re-valuation.
10. In our opinion, the contentions of the appellants cannot be accepted. The facts in the present ease show that when Government requisitioned the property under Rule 75-A(2) of the Defence of India Rules, the Government was entitled to use or deal with the same in such manner as may appear to it expedient. Although the agreement of February 26, 1943, does not provide for the erection of fresh structures or state what is to be done (if they are put up) when the property is released from requisition, it seems clear that the authority to deal with the property in such manner as may appear to the Government expedient, given in Rule 75-A(2), is wide enough to allow them to put up new structures. It was argued on behalf of the appellants that by the order of requisition the land was not vested in the Government and therefore the structures erected on the land would be the property of the owner of the land. This contention is based on the assumption that when someone puts up a structure on land not belonging to him, the owner of the land is the owner of the structure. We are unable to accept the correctness of this assumption in India in all cases. In Narayan Das Khettry v. Jatindra Nath Roy Chowdhury (1027) L.R. 54 IndAp 218 29 Bom, L.R. 1143 a question arose about the compulsory acquisition of land before the removal of a house standing thereon and the division of compensation payable on the acquisition of the property. The Judicial Committee of the Privy Council held that in India there was no absolute rule of law that whatever is affixed or built on the soil becomes part of it, and is subject to the same rights of property as the soil itself. Their Lordships approved of a passage from the judgment of Sir Barnes Peacock in Thahoor Chunder Pormanick v. Ramdhone Bhuttacharjee. (1860) 6 W.R. 228 The passage runs as follows (p. 228):
We have not been able to Find in the laws or customs of this country any traces of the existence of an absolute rule of law that whatever is affixed or built on the soil becomes a part of it, and is subjected to the same rights of property as the soil itself.
This rule Has been accepted for many years as a correct pronouncement of the position in India. In that case the Privy Council was considering the Government's power of sale for arrears of revenue and the Board held that although the land which was subject to revenue charges was liable to be sold, special words indicating the intention of the Legislature to make the building erected thereon subject to such sale were necessary. They therefore held that on a sale of the property the ownership of the building did not pass to the purchaser by reason of the revenue sale.
Section 154 raises two questions for determination when an exemption from liability to tax is claimed-
(i) whether tax is claimed in respect of property; and
(ii) whether such property is vested in the Government.
The word 'property' is used in the context without any limitation and therefore should bear its normal meaning. Interpreted in that way it will embrace every kind of property. As observed by Langdale M.R. in Jones v. Skinner (1835) S.L.J. Ch. 87 (p. 90) :
'property' is the generic term for all that a person has dominion over. It is the most comprehensive of all terms which could be used inasmuch as it is indicative and descriptive of every possible interest which the party can have.
Without attempting to define affirmatively what the generic term will cover, it is sufficient for us to hold that the buildings in question are property, and as in India the ownership of a building is not necessarily related to the ownership of the land on which the building stands, the buildings in the present case were vested in the Government. It is therefore clear that the main part of Section 154 covers the case,. In Secretary of State for India v. Satischandra Sen Sir George Lowndes, in delivering the judgment of the Board, recognised the principle that houses could be erected upon land by the licence of Government, the buildings being recognised as the property of the persons by whom they were erected while the land remained in the ownership of the Government. In our opinion, the meaning of 'property' adopted in Gov-Geri. of India v. Corp. of Cal. (1947) 52 C.W.N. 173 is correct.
11. It was next contended on behalf of the appellant that under the Calcutta Municipal Act the consolidated rate is imposed on buildings which include the subjacent land, both being valued together for purposes of assessment and 'property' in Section 151 as applied to buildings should be understood accordingly. This argument is unsound, firstly, because the method of valuation or assessment adopted in a Provincial Act cannot create or alter the liability to tax. Moreover this argument is mistaken because it overlooks the other provisions of the Municipal Act under which land and buildings are capable of being separately valued and exemptions are granted in cases of land or building under specified circumstances. By way of illustration we may point out Section 126 which deals with exemptions from the consolidated rate. It is there provided, inter alia, as follows :
And the Corporation may either wholly or partially exempt from the consolidated rate any land or building used exclusively for purposes of public charity.
Again in Section 126(3) it is provided as follows :
The Corporation may exempt the owner of any hut from the payment of whole or any portion of the consolidated rate payable in respect of such hut and in any such case they may exempt the owner of the land on which the hut is built or not as they think fit.
In this respect the provisions of Sections 127, 131(2)(d), 132 and 159 of the Calcutta Municipal Act may be noticed also.
12. This reasoning also leads to the rejection of the second contention of the appellants. The contention is that as the unit of taxation is the area mentioned in the schedule to the agreement and as that unit was subject to taxation before April, 1937, the exemption in favour of the Crown given in Section 154 could not be availed of. Whether any particular property falls within the exemption provided in Section 154 of the Government of India Act must depend on what is 'property' within the meaning of that section and not on what is regarded as a unit for purposes of assessment under a local Municipal Act. The question is whether what is sought to be taxed is property and, if so, whether the same is vested in the Government. If the answer to both these is in the affirmative, the question is whether that property was liable to tax before April, 1937. In the present ease the answer is clearly in the negative because the additional structures were all put up after 1942, and therefore were not subject to the municipal tax before April, 1937. The result is that all the contentions of the appellants urged before us are rejected. The appeal therefore fails and is dismissed with costs.