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Issues:
The construction of Section 127-A of the Madhya Pradesh Municipalities Act, 1961. Details of Judgment: 1. The High Court emphasized that each tenement must be individually assessed for property tax under Section 127-A. Tax cannot be imposed on a building with an annual letting value up to Rs. 1800. The aggregation of annual letting values for exemption applies, not for taxation. The unit for tax assessment is a building, not a person. If an individual owns multiple buildings in the same Municipality, each building must be assessed separately. Previous decisions were cited to support this interpretation. 2. The Supreme Court criticized the High Court's mechanical approach to construction, advocating for a purposeful interpretation to fulfill the Act's objectives. Section 127-A's table for taxation does not include buildings with an annual letting value below Rs. 1800. Buildings under this threshold are exempt, with the proviso allowing aggregation of values for exemption purposes only. The proviso aims to prevent exemption for buildings owned by the same person exceeding Rs. 1800 in total value. 3. While each building is a tax unit and those under Rs. 1800 are exempt, aggregation of values necessitates treating all such buildings as one unit for taxation. Any other interpretation would nullify the proviso and defeat the Act's purpose. The legislature did not intend blanket tax exemption for all buildings owned by an individual exceeding Rs. 1800 in total value. 4. The Supreme Court overturned the High Court's decision, stating that the previous rulings did not correctly interpret the law. The appeal was allowed, setting aside the High Court's judgment. The decision was to be applied prospectively, with no recovery or refund for the period before this judgment. 5. No costs were awarded in this matter.
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