2007 (7) TMI 710 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the independent flats in a multi-storied building are to be assessed as one unit or separate units for the purposes of Land and Building Tax?
2. Whether the Circular dated 15-4-1991 issued by the Director, Land & Building Tax, directing that the flats in multi-storied buildings on each floor must be treated as one unit is legal?

Summary:

Issue 1: Assessment of Independent Flats in Multi-Storied Buildings
The court examined whether independent flats in a multi-storied building should be assessed as one unit or separate units for Land and Building Tax purposes. The definition of 'building' under Section 2(3) of the Rajasthan Lands & Buildings Tax Act, 1964 (LBT Act) includes a house or part thereof. The court referred to a circular dated 24-4-1974 issued by the Government of Rajasthan, which clarified that different portions of a building occupied by different persons form different units for the purpose of land and building tax. The court also cited precedents, including the Supreme Court's decision in TATA Engineering & Locomotive Co. Ltd. vs. Gram Panchayat, Pimpri Waghere, which supported the view that separate flats in a multi-storied building are separate houses for legal purposes. The court concluded that each flat in a multi-storied building constitutes a separate house or building under Section 2(3) of the LBT Act and must be taxed as such.

Issue 2: Legality of the Circular Dated 15-4-1991
The court addressed the legality of the Circular dated 15-4-1991 issued by the Director, Land & Building Tax, which directed that flats in multi-storied buildings on each floor must be treated as one unit. The court found that this circular was inconsistent with the legislative intent and the definitions provided in the LBT Act. The court noted that the legislative intention was clear that each building or part thereof should be assessed separately as a unit. The court upheld the Rajasthan Taxation Tribunal's decision to set aside the Circular dated 15-4-1991 and the orders of the Revisional Authority and the Assessing Authority, remanding the matter back to the Assessing Authority for fresh assessment by treating each flat as an independent unit.

Conclusion:
The court dismissed the writ petition filed by the State Government and the authorities of the Land & Building Tax Department, agreeing with the Rajasthan Taxation Tribunal's view that each flat in a multi-storied building should be treated as a separate unit for the purposes of Land and Building Tax. The court found no merit in the petition and dismissed it with no order as to costs.