1. This matter comes before us for revision of an order of the Court of Small Causes. We are here concerned with premises No. 30/31 Kumbalamman Koil St. Madras and property tax for the second half year of 1968-69. The premises consists of two floors of which the first floor is in the occupation of the Joint Commercial Tax Officer's Office on a rental of Rs. 300 per month and the ground floor, which is in two parts has been rented out to the E. S. I. Corporation on a monthly rental of Rs. 125 and to the Madras Handloom Weavers' Co-operative Society on a monthly rental of Rs. 700. The garages on the ground floor are said to have been used by the landlord himself for the purpose of his business. The total rental of the premises amounted to Rs. 1,125 per month and the owner's portion has been valued at Rs. 75 per month. On the basis of this valuation of the rental the tax was fixed.
2. Before the Small Cause Court Judge the correctness of the assessment based on the rents so derived from the various tenants was not in dispute. The landlord's case, however, was that the portion of the ground floor which was occupied by the Madras Handloom Weavers Co-operative Society, was lying vacant from 25-6-1968 and that, when he applied to the Corporation for remission of tax in respect of that portion during the vacancy his request was not considered. The Taxation Appeals Committee thought that it had no jurisdiction to consider a matter relating to Section 105 of the Madras City Municipal Corporation Act and that was also the view of the Small Cause Judge. In his view the Court has no jurisdiction to go into the matter whether remission can be granted or not for the portion unoccupied in the premises. He thought that his jurisdiction in appeal was confined to a challenge to the correctness or otherwise of the particular property. Further, he held that, in view of Bhavani Devi v. Corpn. of Madras, the owner of a building was entitled to claim
remission of property tax only if the entire building was vacant or remained unlet.
3. We are inclined to think the view of the Small Cause Judge on both the matters cannot be sustained. Section 99(1) of the City Municipal Corporation Act authorises the Council by a Resolution to determine that a property tax shall be levied on the buildings and lands within the City. The components of property tax are also set out in that section. The tax shall be levied at such percentage of the annual value of buildings and lands as may be fixed by the council. Method of assessment has been laid down by Section 100. Under this provision every building shall be assessed together with its site and other adjacent premises occupied as appurtenances thereto unless the owner of the building is a different person from the owner of such site or premises. What the annual value shall be has been stated. After dealing with general and special exemptions and stating that property tax is a first charge on the property tax is a first charge on the property the Act goes on to deal with vacancy remission in Section 105. It says that when any building whether ordinarily let or occupied by the owner himself has been vacant and unlet for thirty or more consecutive days in any half year, the Commissioner shall remit so much not exceeding one half of such portion of the tax as relates to the building only as is proportionate to the number of days during which the building was vacant and unlet in the half year. Every claim for remission under sub-section(1)shall be made during the half year in respect of which the remission is sought or in the following half year and not afterwards. No claim for such remission shall be entertained unless the owner of the building or his agent has previously thereto delivered a notice to the Commissioner that the building is vacant and unless or that the building will be vacant and unlet from a specified date either in the half year in which notice is delivered or in the succeeding half year. As to how the period in respect of which remission is made is to be calculated has been indicated in the section. The expression 'building' has been defined by Section 3. But it does not say what the building is, the definition being only an inclusive one. There is no indication in the definition itself whether a building as defined includes a part of the building. But there is no particular reason why, when vacancy remission is provided for a building it should be confined only to the building in its entirety and not extended to a portion of it as well. A building normally include a portion of the building unless it is specifically excluded. We are unable to see any indication in the definition of the expression 'building' to exclude a portion of the building. It is conceivable that a building may be in separate portions which are capable of letting out independently. In that case the annual value which is the basis of property tax, will be calculated with reference to the rent fetched by each of such separate portions and the aggregate thereof. Logically, therefore, vacancy remission should extend to each portion of such building, because the tax is on the building and; the tax being calculated on the annual value which is the aggregate of rent fetched by each of the portions the remission may well be related to that portion of the building which has been separately let out and has been vacant. We do not suggest that, for the purpose of remission, the separate portion for which remission is asked for should have been let out and for a period it remained without letting out. Any portion which is vacant and duly notified will be eligible in out opinion for vacancy remission subject of course, to the limits and conditions imposed by Section 105.
4. Our attention has, however, been invited to . There Ismail J. took the view that on the language of Section 105 and Section 3(4) defining 'building', it must be held that the owner of a building was entitled to a remission of property tax only if the building remained wholly vacant or unlet. He was of the view, that if any portion of the building was in occupation or let out, however small that portion might be, then the provisions of Section 105 were not attracted. With respect we are unable to concur with this view as to the scope of Section 105. The learned Judge referred to the definition of 'building' in the Madras Buildings (Lease and Rent Control) Act which included part of a building. But, there the definition is an exhaustive one and it is not an inclusive one. Section 2(2) of that Act says that a building means so and so. But that is not the case in the City Municipal Corporation Act. There the definition is an inclusive one. We consider, therefore, that the definition of 'building' in Section 2(2) bears no analogy which can be extended to a determination of the scope of the word 'building' as used in the City Municipal Corporation Act. On the other hand in K. V. Das v. Vijayawada Municipality, 1956 Andh LT 450. Umamaheswaram, J. expressed the view similar to the one we are inclined to accept. The learned Judge said that the expression 'any building' in Section 87(1) might be read as including any portion of a building and need not be construed as only meaning building in its entirety or as a whole. We agree with him that such a construction is not only natural on the plain language of Section 105, but also accords with equity and common sense. The learned Judge in support of the view, also referred to the fact that property tax is fixed on the annual value and the annual is arrived at by taking into account the rent realized from the tenants and the realizable in respect of the portion occupied by the owner, if let out. We hold therefore, that vacancy remission is admissible for a portion of a building as well which is vacant provided as we said the other statutory requirements for remission are satisfied.
5. The other point is whether the question of remission is outside the scope of Rule 14 of the Taxation Rules in Schedule IV to the City Municipal Corporation Act. Part I in this schedule contains provisions common to taxes in general and Part I-A has provisions as to assessment of the property tax. Rule 4 provides that any person may at any time not being less than thirty or more than sixty days before the end of a half year, move the Commissioner by revision petition to reduce the tax to which he is liable for the forthcoming half year on the ground that the annual value of the property in respect of which the tax is imposed has decreased since the assessment on the property was last made or revised. If an assessee is dissatisfied with the order passed by the Commissioner is respect of that matter, the objector may under Rule 14, within the specified time, appeal against it to a Committee called the Taxation Appeals Committee. The Taxation Appeals Committee shall have all the powers of the Central Committee under sub-section(1) of Section 26 and the provision of sub-section(2) of that section shall apply to requisition made by the Taxation Appeals Committee. But this does not touch upon the scope of an enquiry in the appeal. Under Rule 15, a further appeal is provided to the Small Cause Court against the decision of the Taxation Appeals Committee. We agree with the contention for the Corporation that the scope of the appeals should be confined to the scope of the petition under Rule 4, namely a revision petition to reduce the tax. It is contended for the Corporation that reduction of tax is something different from remission of tax. It is so in a certain sense. For instance when assessment to property has been made on certain annual value the assessee may ask for reducing the tax on the ground that the annual value of the property, in respect of which the tax has been imposed, has decreased. That will be a case of request to reduce the tax. If reduction of tax is asked for on the basis that there is vacancy, and, therefore, to that extent the annual value has decreased, it may equally be a request for reduction of tax. In that case too though what is asked for is remission in effect reduction of tax is asked for. This is because the crux of the matter is property tax which is assessed on the basis of annual value. Remission is not given on an ex gratia basis. De hors vacancy, it is related to rent and, therefore, annual value. There is a decrease in the annual value resulting from vacancy and, therefore, remission is asked for. In other words, reduction of tax is requested because the basis for full property tax has undergone a modification on account of the charge in the annual value. We are of opinion, therefore, that the petition to get remission or to reduce, the tax on the ground that the building remained wholly or partially vacant or unlet will be within the scope of Rule 4, and therefore, also within the scope of Rules 14 and 15. The revision petition is, therefore, allowed with costs. The matter will go back to the Taxation Appeals Committee for fresh disposal.
6. Revision allowed.