Municipal house tax valuation must follow statutory reasonable letting value; revenue-based formulas and consent cannot override the statute.

Municipal house tax rateable value for a cinema building must be based on the statutory measure of gross annual rent reasonably expected to be received, and where rent control applies, on fair rent under the rent restriction law. A valuation formula linked to occupied seats, ticket collections and operating income does not conform to that statutory basis and is ultra vires the taxing provision. Consent to such a formula cannot validate a levy that is contrary to statute, because there is no estoppel against a statute. The assessment was therefore unsustainable, and the valuation had to be determined according to the statutory standard of reasonable letting value.

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Issues: (i) Whether the annual rental value for house tax of the cinema building could be assessed on the basis of seats occupied, ticket collections and related income formula instead of the statutory measure of gross annual rent reasonably expected to be received; (ii) Whether the petitioner's consent to the formula could prevent it from challenging an assessment that was contrary to the statute.

Issue (i): Whether the annual rental value for house tax of the cinema building could be assessed on the basis of seats occupied, ticket collections and related income formula instead of the statutory measure of gross annual rent reasonably expected to be received.

Analysis: Section 93 of the Punjab Municipal Corporation Act, 1976 requires rateable value to be based on the gross annual rent for which the building may reasonably be expected to let. Where the building is governed by rent control legislation, that reasonable letting value is to be determined with reference to fair rent under the East Punjab Urban Rent Restriction Act, 1949. A formula founded on occupied seats, ticket collections and operational income does not conform to that statutory basis and is ultra vires the provision.

Conclusion: The assessment based on the seats-and-collections formula was unlawful and could not be sustained.

Issue (ii): Whether the petitioner's consent to the formula could prevent it from challenging an assessment that was contrary to the statute.

Analysis: An assessment that conflicts with the governing statute cannot be validated by agreement between the parties. The principle that there can be no estoppel against a statute applies, so prior acceptance of the formula did not bar the petitioner from objecting to a statutory breach.

Conclusion: The petitioner was not estopped from challenging the assessment.

Final Conclusion: The impugned assessment was set aside, and the rateable value had to be determined in accordance with the statutory standard of fair rent and reasonable letting value.

Ratio Decidendi: Rateable value for municipal house tax must be determined strictly by the statutory measure of reasonable letting value, and any contrary contractual or consensual formula is unenforceable and ultra vires the taxing provision.

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