TaxTMI 
TaxTMI 
1961 (8) TMI 31
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....d objections to the said assessment under s. 139 of the Act. Meanwhile under the West Bengal Premises Rent Control (Temporary Provision) Act, 1950 (W.B. XVII of 1950), (hereinafter called the Rent Control Act), the standard rent of the said premises was fixed by the Rent Controller: the rent was fixed at Rs, 550 per month with effect from April, 1951, and at Rs, 632-8-0 per month with effect from August, 1951. One of the objections raised was that the Corporation had no power to fix the annual valuation at a figure higher than the standard rent. The' Special Officer disallowed all the objections and confirmed the assessment. Being aggrieved by the said order, respondent No. 1 filed an appeal in the Court of Small Causes, Calcutta, and the learned Small Causes Judge allowed the appeal and fixed the annual valuation, for the purpose of assessment, at ₹ 6,831. That was on the basis of the standard rent of ₹ 632-8-0 per month. The Corporation of Calcutta questioned the correctness of the said Judgment by preferring an appeal to the High Court at Calcutta. The High Court by a majority agreed with the Small Causes Judge and dismissed the appeal. Hence the present appeal. ....
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....mpany's future requirement. The Corporation assessed the land on the basis of rental value of land in the neighborhood. It was argued that the premises ought to be valued on the basis of rent which would be paid by a hypothetical tenant who must be presumed to keep the land vacant, or at the most use it as an imperfect golf course. The Judicial Committee rejected the contention and made the following observations at p. 5 : "Indeed, it provides a striking example of the danger attending an injudicious use of precedent. The owner of land in England is not chargeable with rates, as owner, at all. If he leaves land vacant and unoccupied, he pays no rates. Under the Calcutta Act mere, ownership carries with it a liability to pay one-half of the rate assessed on the annual value of the land. It is impossible to construe s.127 as meaning that, when land is unoccupied, its annual value must be taken to be the rent at which it might be expected to be let to a tenant who was- precluded from occupying it. There is nothing in the words of the section to suggest that a hypothetical tenancy of so improbable a character was contemplated, and the elaborate provisions of s.151 can hardly....
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....ection 3 of the said Act says that any amount in excess of the standard rent of any premises shall be irrecoverable notwithstanding any agreement to the contrary. Section 33(a) thereof provides inter alia that ,whoever knowingly receives, whether directly or indirectly, any sum on account of the rent of any premises in excess of the standard rent" will be liable to certain penalties. "Standard rent" has been defined in 2(10)(b) to mean that "where the rent has been fixed under s. 9, the rent so fixed, or at which it would have been fixed if application were made under the said section." A combined reading of the said provisions leaves no room for doubt that a contract for a rent at a rate higher than the standard rent is not only not enforceable but also J. that the landlord would be committing an offence if he collected a rent above the rate of the standard rent. One may legitimately say under those circumstances that a landlord cannot reasonably be expected to let a building for a rent higher than the standard rent. A law of the land with its penal consequences cannot be ignored in ascertaining the reasonable expectations of a landlord in the matter of re....
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....uthority, to the determination of which the landlord and the lessee are strangers. " Lord Parmoor stated thus "Under 43 Eliz. c. 2, rates are to be levied upon every occupier of lands, houses, etc. The distinction between occupier and owner, in this connection, is of primary importance. The occupation value of property may be, and often is, distinct from its value to the owner. This distinction would probably be emphasized where an artificial statutory maximum is fixed, and a statutory restriction prevents an owner from recovering from any tenant a, greater amount, as rent, than the statutory maximum." These passages bring out in bold relief the distinction between the English and the Indian law which has already been pointed out by the Judicial Committee in Bengal Nagpur Railway Company Limited v. Corporation of Calcutta ((1946)L.R.74 I.A.I.). That is why, while in England the value of occupation by a tenant is the criterion for fixing the, standard rent under the rating law, under the Act the letting value of a building to the landlord is the standard in fixing the, rental value. If this distinction is borne in mind much of the cloud cast in this case is dispelle....
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.... High Court in the present case distinguished the said decision. We would prefer to accept the view expressed by the Calcutta and Rangoon High Courts, is the decisions of the said Courts are based upon a correct appreciation of the distinction between the law of rating in England and that under the Act. It is said that, as under s. 9(1)(b) of the Rent Control Act the landlord can get the standard rent raised by an amount equivalent to the increase in taxes, rates or cesses, there would not be any prejudice even if the annual value of the building is fixed on the basis of a rate of rent higher than that permissible under the said Act. But this reasoning would land us in a vicious circle and would enable one to circumvent the provisions of the Rent Control Act, for though a tenant if; not liable under an Act to pay a rent higher than the standard rent, by this process he would be compelled to pay a higher rent. On the other hand, the scope of that section can legitimately be confined to situations giving rise to increase of taxes such as the increase in the rate, etc. Nor are we impressed by the argument that the omission of a specific provision, as in s.26 of the Calcutta Rent Act ....