GOVERNMENT SERVANT CO-OPERATIVE v. UNION OF INDIA & Ors.

The Corporation of Calcutta v. Smt. Padma Debi & Ors. (1962) 3 SCR D 49; Dewan Dau/at Rai Kapoor and Ors. v. New Delhi Municipal Committee and Ors., [1980) I SCC 685; DR. Bablir Singh and Ors. etc. etc. v. Municipal Corporation of Delhi and Ors., [1985) 2 SCR 439 and East India Commercial Co. Pvt. Ltd. v, Corporation of Calcutta, (1998) 4 SCC 368, relied on.

#2. It cannot be said that if the annual rent is taken as basis for E determining the rateable value of the property, the property tax will become a tax on the income of the owner, thus falling beyond the legislative competence of the State Legislature as tax on income would fall in Entry 82 of List I instead of Entry 49 of List II of Sch. VII to the constitution. The three lists in the seventh schedule of the Constitution have no relevance to the union Territory of Delhi since Parliament can make law respecting all the entries in all the three lists. An Act of the State legislature entitling a Municipal Corporation to levy property tax on the basis of rateable value of the land and building calculated by the yardstick of annual rent at which such a property can reasonably be leased to a hypothetical lessee, is valid and within its legislative competence. The tax remains property tax and cannot be viewed G as the tax on income. The method of arriving at the quantum of tax should not be mixed up with the nature of the tax itself. [1001-F-H; 1002-D) F Ra/la Ram v. The Province of East Punjab, AIR (1949) 36 Federal Court 81; Patel Gordhandas Hargovindas v. Municipal Commissioner, Ahmedabad, [1964) 2 SCR 608; Bhagwan Dass Jain v. Union of India & H 998 SUPREME COURT REPORTS (1998] 3 S.C.R."