Aggregation of annual letting value governs municipal property tax exemption, preventing separate units from escaping tax below the threshold.

The Supreme Court construed Section 127-A of the Madhya Pradesh Municipalities Act, 1961 to mean that the annual letting value of multiple buildings owned by the same person in a municipality may be aggregated for both exemption and taxability. The proviso to the exemption clause was read purposively so it would not be rendered ineffective or used to defeat the municipal tax scheme. On that interpretation, where the aggregate annual letting value exceeds the statutory threshold, the properties do not remain outside the tax net merely because each unit separately falls below the limit, and the contrary view was rejected.

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Issues: Whether, under Section 127-A of the Madhya Pradesh Municipalities Act, 1961, the annual letting value of multiple buildings owned by the same person in a municipality could be aggregated for the purpose of exemption and taxation, so as to deny exemption where the aggregate exceeded the statutory threshold.

Analysis: Section 127-A contains the charging provision for property tax and also an exemption for buildings and lands whose annual letting value does not exceed the prescribed limit. The proviso to the exemption clause permits aggregation of the annual letting value of all buildings or lands owned by the same person in the municipality, and that aggregation cannot be confined to exemption in a manner that makes the proviso ineffective. A purposive construction was adopted to give effect to the statutory object and to avoid rendering the proviso nugatory. On that construction, where the aggregate annual letting value of properties owned by one person exceeds the threshold, the properties do not remain outside the tax net merely because each unit separately falls below the limit.

Conclusion: The aggregation rule applies for the purposes of determining tax liability under the provision, and the contrary view of the High Court was held to be incorrect.

Final Conclusion: The appeal succeeded, the High Court judgment was set aside, and the interpretation adopted ensured that the statutory exemption could not be used to defeat the municipal tax scheme.

Ratio Decidendi: Where a taxing statute expressly permits aggregation of the annual letting value of multiple properties owned by the same person for exemption purposes, the provision must be construed purposively so that the aggregation also governs taxability and the exemption is not allowed to defeat the legislative object.

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