THE ASSOCIATED HOTELS OF INDIA LTD., LAHORE vs THE LAHORE MUNICIPAL
This matter concerns the assessment of the annual value of Faletti's Hotel, Lahore, by the Lahore Municipal Corporation for the years 1955-1959. The core legal question was whether an appeal lay to the District Judge under Section 118 of the City of Lahore Corporation Act regarding the quantum of tax, specifically concerning the basis or principle of assessment. The High Court had previously held that no appeal lay because the dispute related only to the quantum of tax rather than the principles of assessment. Upon review, the Supreme Court held that the Assessor's determination of annual value based on 'Trade Earnings' was contrary to Section 107 of the City of Lahore Corporation Act, which mandates that annual value be based on the gross annual rent the building might reasonably be expected to let for. Consequently, the Court ruled that an appeal was maintainable under Section 118. The appeals were allowed, and the cases were remanded to the Assessor for re-assessment in accordance with the law, specifically noting that the value of furniture must be included in the annual value calculation.
- Does an appeal lie under Section 118 of the City of Lahore Corporation Act when the dispute concerns the basis or principle of assessment rather than just the quantum of tax?
- Is the determination of annual value based on 'Trade Earnings' consistent with the requirements of Section 107 of the City of Lahore Corporation Act?
- Must the value of furniture be included in the annual value assessment under the City of Lahore Corporation Act?
- Section 118, City of Lahore Corporation Act
- Section 107, City of Lahore Corporation Act
1. MUIIAMMAD YAQUB ALI, J.-The subject-matter of these appeals is assessment of annual value of Faletti---s Hotel, Lahore, by the Lahore Municipal Corporation, for the years 1955-56, 195(-57, 1957- 58, and 1958-59.
2. The assessm ents made by the Assessor were set aside by the District Judge, Lahore, on appeals filed by the Associated Hotels of India Limited, proprietor of the Faletti's Hotel, but on further revision petitions filed by the. Corporation, a learned Judge of the High Court held that no appeal lay to the District Judge under section 118 of the Lahore Municipal Corporation Act as the dispute related to quantum of tax payable by the assessee and did not involve the basis or principle on which the assessm ents were made.
3. Leave to appeal was granted to consider correctness of the interpretation placed by the High Court on section 118 ;which provides for an appeal from the order of the Assessor, if any dispute arises as to the liability of any land or building to assessment or as to the basis or principle of assessm ent.
4. The assessor determined the annual value on the basis of "Trade Earnings" which according to the appellant was repugnant to the provisions of section 107 which provides that annual value of any building shall -be deemed to be the gross annual rent at which such building together with its appurtenances and any furniture that may be let for use or enjoyment therewith might at the 'time of assessm ent reasonably be expected to let from year to year.
5. The basis on which the disputed assessments were made by the assessor was thus opposed to section 107 of the City of Lahore Corporation Act and an appeal lay under section 118 from his orders to the District Judge. The High Court was thus wrong in coming to the contrary conclusion.
6. Mr. Abdul Rashid, appearing for the Corporation, conceded that the construction placed by the learned. Judge of High Court on section 118 of the City of Lahore Corporation Act was incorrect and desired that the appeals be allowed and the cases remanded to the Assessor for re-assessing the annual value in accordance with the dictum of the Court in Abdullah Peer Mohammad and others v. Karachi Municipal Corporation and others with the exception that under the City of Lahore Corporation Act, value of furniture is to be included in the annual value while in the Karachi cases the value of furniture was to be excluded from the annual value.
7. The appeals are allowed and the cases remanded to the Assessor for re-assessment of annual value for the aforesaid years in accordance with law. There will be no order as to costs.