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Issues Involved:
1. Interpretation of Section 127(a) of the Calcutta Municipal Act, 1923. 2. Whether the Corporation of Calcutta can fix annual valuation higher than the standard rent under the Rent Control Act. 3. Meaning of the phrase "at the time of assessment" in Section 127(a) of the Act. Detailed Analysis: 1. Interpretation of Section 127(a) of the Calcutta Municipal Act, 1923: The core issue in this case revolves around the interpretation of Section 127(a) of the Calcutta Municipal Act, 1923. The section reads: "the annual value of land, and the annual value of any building erected for letting purposes or ordinarily let, shall be deemed to be the gross annual rent at which the land or building might at the time of assessment reasonably be expected to let from year to year, less, in the case of a buildings an allowance of ten per cent for the cost of repairs and for all other expenses necessary to maintain the building in a state to command such gross rent." The Court emphasized that the criterion is the rent realisable by the landlord and not the value of the holding in the hands of the tenant. This interpretation aligns with the Judicial Committee's stance in Bengal Nagpur Railway Company Limited v. Corporation of Calcutta, which highlighted that the assessment should be based on the rent the landlord might reasonably expect to receive, not the actual rent being paid by the tenant. 2. Whether the Corporation of Calcutta can fix annual valuation higher than the standard rent under the Rent Control Act: The Court examined whether the Corporation of Calcutta could fix the annual valuation of premises higher than the standard rent fixed under the Rent Control Act. The Court noted that under the Rent Control Act, the standard rent is the maximum rent that can be legally charged, and any rent above this is not enforceable and is penalized. The Court stated, "A law of the land with its penal consequences cannot be ignored in ascertaining the reasonable expectations of a landlord in the matter of rent." Thus, the Court concluded that the hypothetical rent used for assessment purposes cannot exceed the standard rent fixed under the Rent Control Act. The Court rejected the appellant's reliance on the decision of the House of Lords in Poplar Assessment Committee v. Roberts, noting the fundamental differences between the English and Indian laws of rating. 3. Meaning of the phrase "at the time of assessment" in Section 127(a) of the Act: The Court also addressed the subsidiary issue regarding the phrase "at the time of assessment" in Section 127(a) of the Act. The majority view of the High Court, which was not seriously contested, was that the assessment period commences with the making of the valuation under Section 131 of the Act and ends with the determination of the objection under Section 140 thereof. The Court agreed with this interpretation, stating that events occurring during this period could be considered for assessing the annual value under Section 127(a) of the Act. Conclusion: The Supreme Court upheld the High Court's decision, agreeing that the Corporation of Calcutta could not fix the annual valuation of the premises higher than the standard rent fixed under the Rent Control Act. The appeal was dismissed with costs.
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