Judgment :- 1. It might be that the provisions of the Kerala Panchayats Act and the rules made thereunder were not correctly applied by the Panchayats concerned in levying the building tax in these cases. Indeed we are inclined to think they were not. But, that has not materially affected the result and therefore we see no reason to interfere in exercise of our extraordinary jurisdiction under Art.226 of the Constitution. 2. S.68 of the Kerala Panchayats Act runs as follows: "68. Building tax. (1) Every Panchayat shall in accordance with the rules prescribed for the purpose levy a tax on all buildings (other than huts and buildings exempted by the provisions of this Act) in the Panchayat area, at such percentage of the net annual rental value of the building as may be fixed by the Panchayat by resolution, subject to a maximum of ten per cent and a minimum of four per cent. (2) xxxxx (3) xx xx (4) The Government may make rules providing for (1) The manner of ascertaining the net annual rental value of buildings or the categories into which they fall for the purposes of taxation; xx xx xx And R.4 of the Kerala Panchayats (Building Tax) Rules made in pursuance of clause (1) of sub-section (4) of the section thus: "4. Determination of annual rental value: The net annual rental value of buildings shall be deemed to be the gross annual rent at which they may reasonably be expected to be let from month to month or from year to year, less a deduction of ten per cent of such annual rent, and the said deduction shall be in lieu of all allowances for repairs or any other account whatever. Provided that in the case of (i) any Government building, or (ii) any building of a class not ordinarily let, the gross annual rent of which cannot, in the opinion of the Executive Authority be estimated, the annual rental value shall be deemed to be six per cent of the total estimated value of the appurtenant land and estimated present cost of erecting the building after deducting for depreciation a reasonable amount which shall in no case be less than ten per cent of such cost: In levying the tax in these cases the Panchayats acted under clause (ii) of the proviso to the rule and determined the annual rental value of the buildings in question accordingly. The question is whether they were right in doing so, in other words, whether the buildings in question belong to a class of buildings not ordinarily let. It is the case of the petitioners herein that the buildings belong to a class of buildings ordinarily let even though they are, in fact, not let and that therefore the determination of the rental value should have been under the body of the rule and not under the proviso. 3. The petitioners are estate owners who are under an obligation, statutory or contractual, to provide rent-free quarters for their staff from the lowest paid worker right up to the manager. The buildings which have been taxed are the quarters so provided, and they are admittedly dwelling houses. That being so, it seems to us that it can hardly be denied that they belong to a class of buildings which are ordinarily let; and the circumstance that they are, in fact not let can make no difference to the position. They are nevertheless buildings of a class, namely, dwelling houses, that are ordinarily let. That being so, it seems to us that it can hardly be denied that they belong to a class of buildings which are ordinarily let; and the circumstance that they are, in fact not let can make no difference to the position. They are nevertheless buildings of a class, namely, dwelling houses, that are ordinarily let. It has to be noted that what the proviso to R.4 says is, "any building of a class not ordinarily let", not, "any building not ordinarily let", and we fail to see how the circumstances put forward on behalf of the Panchayats, namely, that the buildings are not, in fact, let, that the petitioners are under a legal obligation to provide rent-free accommodation to their staff and that the buildings are located in places where ordinarily such buildings would not be available on rent there being no demand for such buildings in those places except for housing the staff of the estates, can bring the cases within the proviso. For, they do not affect the classification of the buildings which, those factors notwithstanding, are nothing else than dwelling houses. Nor again, how these factors can be an. impediment to the determination of the rent at which the buildings may reasonably be expected to be let within the meaning of the body of the rule. We are inclined to the view taken by a learned single judge of this Court in O.P. Nos. 57 and 67 of 1968 that, for a building to belong to a class of buildings not ordinarily let, there must be something in its structural features that renders it unsuitable for letting. A church building, for example, might have structural features by reason of which persons would not ordinarily take it on rent. But, if a church or a prayer house is housed in an ordinary dwelling house, the dwelling house does note case to belong to a class of buildings ordinarily let merely by reason of its particular use. Indeed the dwelling house might well have been taken on rent for the purpose; and so indeed, if the buildings now in question were available on rent, might those buildings in order to fulfil the petitioners' legal obligation. Indeed the dwelling house might well have been taken on rent for the purpose; and so indeed, if the buildings now in question were available on rent, might those buildings in order to fulfil the petitioners' legal obligation. And any book on rating will show that the fact that a particular building is not, in fact, let or that there no similar buildings in the locality that are let is no impediment to determining the rent at which the building can reasonably be expected to be let. " The hereditament to be valued must be assumed to be vacant and to let" and the general principle is that "the value arrived at should represent the figure at which the hypothetical landlord and tenant would come to terms as a result of bargaining for that hereditament in the light of competition or its absence in both demand and supply, as a result of the higgling of the market". (Ryde on Rating, Tenth Edition P. 271) In cases like the present, the hypothetical tenant would include the staff who are in actual occupation of the buildings as also the employers who are bound to provide quarters for their staff and could, instead of building the quarters themselves, take suitable buildings on rent. What would they pay if they had to take the buildings on rent and the buildings were vacant and to let? Now, in determining what a hypothetical tenant would pay a hypothetical landlord, one of the accepted modes of valuation is what is known as the contractor's method, namely, a reasonable return on the capital invested on the building. In cases like the present where, it is said, there are no buildings available on rent, (a factor which, coupled with the petitioners' legal obligation to provide quarters, would put up rather than depress the rent since it postulates a demand to meet which there is no supply) the employers could have to put up the buildings themselves, or got some other person to put up the buildings for them and taken them on rent from that ether person. In either case, a reasonable return on the capital invested or on the present value of the building, which is what the proviso in question contemplates, would surely be a fair measure of the competitive rent see in this connection N.M.C.S. & W. Mills v. Ahmedabad Municipality AIR. 1967 SC. 1801. 4. In either case, a reasonable return on the capital invested or on the present value of the building, which is what the proviso in question contemplates, would surely be a fair measure of the competitive rent see in this connection N.M.C.S. & W. Mills v. Ahmedabad Municipality AIR. 1967 SC. 1801. 4. Although the Panchayats in these cases valued the buildings in question under the proviso to R.4, the result, we think, would have been much the same had they applied the proper provision, namely, the body of the rule. 5. In this view we dismiss these writ petitions and these appeals from the dismissal of like petitions. In the circumstances we make no order as to costs.