JUDGMENT Gyanendra Kumar, J. - This writ petition has been filed by the Nagar Mahapalika, Kanpur for quashing the order dated 17-5-58 of the Additional Commissioner, Allahabad Division allowing the appeal of respondents Nos. 2, 3 and 4 (hereinafter referred to as the Naronhas) who are owners of the premises in question. 2. The admitted or proved facts are that the Naronhas are owners of premises No. 87/9, Kalpi Road, Kanpur in which they were running a factory called the Naronha Model Tannery. From the middle of 1946 to the middle of 1953 the premises remained on rent as factory with third parties. On 1-7-1953 the Naronhas rented out the above premises together with the machinery fitted therein to a firm known as "Super Tannery" on a rental of Rs. 750/- per month. Since then the lessee firm has been carrying on the same trade and business in the premises in question. For the period 1948 to 1953 the petitioner Mahapalika had assessed the premises at Rs. 4,800/- per annum on the basis of the then gross annual rent received by the owners. Likewise for the period 1953-58 the Mahapalika assessed the premises at Rs. 7,800/- calculated on the gross annual rent received by the owners during that period. In other words, the Mahapalika Kanpur had been treating the premises in question as an ordinary building, within the meaning of Sec. 140(1) (b) of the U.P. Municipalities Act and not as a factory within the meaning of sub-clause (a) of clause (1) of Sec. 140 of the Act. 3. When the question of determining the annual value for the period of 1958-63 arose, wisdom seems to have dawned on the petitioner Mahapalika with the result that this time they assessed the building as a factory within the meaning of Sec. 140(1) (a), because under this sub-clause the process of determining annual value was favourable to the Mahapalika. 3. When the question of determining the annual value for the period of 1958-63 arose, wisdom seems to have dawned on the petitioner Mahapalika with the result that this time they assessed the building as a factory within the meaning of Sec. 140(1) (a), because under this sub-clause the process of determining annual value was favourable to the Mahapalika. Under this sub-clause the annual value has to be fixed at a proportion not exceeding five per centum of the sum obtained by adding the estimated present costs of erecting the building to the estimated value of the land appurtenant thereto; while under sub-clause (b) the annual value is arrived at on the basis of the gross annual rent for which it is actually let or where the building is not let out or in the opinion of the Board is let for a sum less than its fair letting value, might reasonably be expected to let from year to year. Calculating the annual value under sub-clause (a) the petitioner Mahapalika worked it out at Rs. 1,80,000/-, which was reduced by the Executive Officer to Rs. 1.50,500/-, on the objection of the contesting respondents to the effect that the value of the land and building had been excessively calculated by the Mahapalika. 4. Being dissatisfied with the order of the Executive Officer, the Naronhas filed an appeal before the Commissioner Allahabad Division, which, as observed above, was allowed by the Additional Commissioner by his judgment dated 17-5-1958 holding that the annual value had to be calculated on the building simpliciter and not as a factory, as was being done by the Mahapalika previously. Hence this writ petition by the Mahapalika. 5. There appears to be hardly any dispute that the premises in question which was being used by the Naronhas as their factory had all along been used as such. In para 13 of the affidavit dated 16-8-1958 filed on behalf of the Mahapalika it has been specifically stated that the premises in question was at present occupied by "Super Tannery" which is a factory; that there are about 50 workmen employed in the Super Tannery which is run by electric power. In the counter affidavit filed on behalf of the Naronhas it has only been asserted that the building and machinery alone were originally let out by the Naronhas and not the factory. In the counter affidavit filed on behalf of the Naronhas it has only been asserted that the building and machinery alone were originally let out by the Naronhas and not the factory. It has further been stated that the deponent of the counter-affidavit did not know whether 50 or more workmen were employed in the business. From the grounds of appeal filed by the Naronhas before the Commissioner and the latter's judgment it is quite clear that the contesting respondents never challenged the fact that the premises in question was a factory. 6. The only question to be deter mined in this case is whether the annual value of the premises is to be calculated as a factory within the meaning of sub-clause (a) of clause (1) of Sec. 140 or as a building simpliciter as envisaged by sub-clause (b) of that section. The scheme and arrangement of the section clearly shows that, building have been divided into two categories - (a) those used as railway stations, hotels, colleges, schools, hospitals and factories etc. and (b) those not used as such. If the building in question falls in any of the categories contemplated by sub-clause (a), it cannot possibly fall within the ambit of sub-clause (b), in other words, where sub-clause (a) can apply, sub-clause (b) would not apply. The former excludes the latter. There is no via media. The mere fact that originally a building was let out as a mere building for residential purposes would also not make any difference, if the same was later on converted into a hotel, college, school, hospital or a factory. The determining factor therefore is the character and use to which a building is put at the relevant time. The moment a building simpliciter is used for any of the above purposes, contemplated by sub-clause (a), the mode of calculating annual value would automatically change. As already observed above, the premises was being used as a factory by the lessees at the relevant time i.e. at the time of calculating the value for the period 1958-63. Therefore, the only method for calculating its annual value was the one contemplated by sub-clause (a) i.e. a proportion not exceeding 5 per centum of the estimated present cost of erecting the building in question plus the estimated value of the land appurtenant thereto. Therefore, the only method for calculating its annual value was the one contemplated by sub-clause (a) i.e. a proportion not exceeding 5 per centum of the estimated present cost of erecting the building in question plus the estimated value of the land appurtenant thereto. A factory does not cease to be a factory merely because it has been let out on a fixed rental. The view taken by the Additional Commissioner to the contrary is patently erroneous. 7. I, therefore, allow this petition and quash the order of the Additional Commissioner dated 17-5-1956. However, as the Additional Commissioner had only decided the appeal on a preliminary point and had not gone into other questions such as the value of the present estimated cost of erecting the building and the value of the land appurtenant thereto, the case shall now go before him for decision on merits according to law. In the circumstances of this case I make no order as to costs.