( 1 ) THE petitioner is a partnership firm carrying on business, inter alia, as motion picture exhibitors under the name and style, ' Mjs. Gopal Films'. Respondent 1 is the Corporation of the City of Bangalore; respondent 2 is its Administrator and respondent 3 is the the Revenue Officer of the Corporation. The petitioner is carrying on the business of exhibiting cinema films in the property known as 'kapali Cinema' which is owned by the firm. It is located on a parcel of land which has been taken on lease on a ground rent of Rs. 3,000 per month. The land on which the cinema theatre is built has been given Municipal No. 254. This matter relates to the assessment of the property No. 255-Kapali Theatre to property tax under the City of Bangalore Municipal Corporation Act 1949 (hereinafter referred to as the 'act' ). ( 2 ) THE proceedings for the determination of the annual letting value of the property were initiated by Respondent 3 by a special notice dt. 17-8-68, issued under S. 145 of the Act. By the said notice respondent 3 proposed to determine the annual letting value of the property at Rs. 1,13,950 on the profit basis and computing the annual value at eight per cent of the profits. The petitioner-firm filed its objections to the said proposal. Respondent 3 by his order dt. 27-12-1869 fixed the annual letting value at rs. 1,02,036. Against the said order, the petitioner-firm preferred an appeal before Respt. 2 u/s. 146 read with R. 22 of Sch. III of the Taxation Rule. Respt. 2 functioning as the Taxation Appeals Committee heard and disposed of the appeal by his order dt. 24-7-1970 determining the annual letting value of the property at Rs. 1,00,034. On the basis of the said determination respondent 3 sent a notice to the petitioner demanding a sum of Rs. 44,483- 96 as property tax in respect of petitioner's property, Kapali Theatre aggrieved by the order of respondent 2, the petitioner has approached this Court for relief under Arts. 226 and 227 of the Constitution. 1,00,034. On the basis of the said determination respondent 3 sent a notice to the petitioner demanding a sum of Rs. 44,483- 96 as property tax in respect of petitioner's property, Kapali Theatre aggrieved by the order of respondent 2, the petitioner has approached this Court for relief under Arts. 226 and 227 of the Constitution. A preliminary objection was raised by Sri S. V. Subramaniam, learned counsel for the respondents that a writ petition is not maintainable as the petitioner has an alternate remedy of appeal to the District Judge under Rule 23 of Schedule III to the Taxation Rules read with S. 146 of of the Act and the petitioner not having availed of the said remedy is not entitled to any relief. Sri Venkatachalaiah, learned Counsel for the petitioner submited that the alternate reredy provided under the Rules is not an adequate and efficacious remedy as under the Rules an appeal can he maintained only if the tax demanded is paid which is a condition precedent for the maintainability of the appeal. Since the tax demanded is a large amount and the petitioner cannot exercise his right of appeal without payment of the tax demanded it cannot be contended that there is an effective alternate remedy. Therefore, we over-rule the preliminary objection to the maintainability of this writ petition. ( 3 ) THE learned Counsel for the petitioner formulated the following three grounds in regard to the challenge made to the validity of the order of respondent 2. First, that the basis adopted by respondent 2 for the determination of the letting value of the property is arbitrary and that the account books offered to be produced for scrutiny for the purpose of proving the actual profits were arbitrarily rejected. Secondly, that the receipts from short films and slidses estimated at Rs. 3,000 per month is not rent and that the said amount should be taken only as part of the profits. Thirdly, that the allowance of twenty per cent on account of 'service and establishment' is arbitrary and discriminatory. We will deal with the above contentions in the order in which they are stated. Sec. 99 of the Act empowers the Corporation to levy property tax. Sub-sec. Thirdly, that the allowance of twenty per cent on account of 'service and establishment' is arbitrary and discriminatory. We will deal with the above contentions in the order in which they are stated. Sec. 99 of the Act empowers the Corporation to levy property tax. Sub-sec. (2) of S. 99 states that the property tax shall be levied at such percent not being less than fifteen per cent and not more than twenty-five per cent of the annual value of buildings and lands as may be fixed by the Corporation. Sub-sec. (3) of the said section states that for the purpose of assessing the property, the annual value of any building or land shall be determined by the Commissioner. S. 100 provides for the method of assessment of property tax. Sub-sec. (2) of S. 100 states, that the annual value of a building or land shall be deemed to be the gross annual rent at which such building or land may at any time of assessment reasonably be ejxpected to let from month to month or from year to year, less a deduction in the case of buildings only of 16 2|3 per cent of such annual rent and the said deduction shall be in lieu of all allowances for repairs or on any other account whatever. ( 4 ) IN view of the above provisions, the annual value has to be worked out on the basis of what a bypothetical tenant would be willing to pay as rent of the premises to the hypothetical landlord who is prepared to let the premises from year to year as they stand having regard to all the advantages and dis-advantages relating to such premises, guch as the situation the nature of the property, the obligations and liabilities attached thereto and other features, if any, which enhanca or decrease their value to such a tenant. The section, while it enjoins upon the Corporation to determine the annual value does not provide for any particular method of rating out of the several well known methods usually followed in such assessments. The well known methods usually followed in such assessments are: (a) the comparative method; (b) the contractor's method; (c) the unit method and (d) the profits basis method, i. e. profit making capacity or valuation by reference to receipts and expenditure. The well known methods usually followed in such assessments are: (a) the comparative method; (b) the contractor's method; (c) the unit method and (d) the profits basis method, i. e. profit making capacity or valuation by reference to receipts and expenditure. ( 5 ) IN the instant case, respondents 2 and 3 have adopted the profits basis for the purpose of valuation. The petitioner has no grievance with regard to the adoption of the profits basis of valuation. Its grievance is that the annual profits have been arbitrarily determined without reference to the books of account offered to be produced at the time of assessment and at the time of the hearing of the appeal. What the administrator has done is to compute the ' full house collections' for the year at the rate of four shows per day out of which he has deducted thirty per cent for vacancy and twenty per cent towards service and establishment charges. Respondent 2 has rejected the account books of the petitioner without even looking into them. He has not stated as to why the accounts are not reliable. All that he has stated is : the accounts given by the appellant cannot be accepted as when compared they are not commensurate with the earnings in cinemas situated in the neighbourhood. This is very modern theatre and is in a very advantageous and prominent position. ( 6 ) THE petitioner has alleged in the affidavit filed in support of the writ petition that its account books have been accepted by the assessing authorities under different tax enactments and that there is no valid reason given for rejection of the same by respondent 2. The argument of the learned Counsel for the petitioner was that it is only in cases where the books are either not produced or not available or not considered reliable, the assessing authorities are entitled to estimed the gross profits; but where the account-books are made available and when there is no valid reason to reject the same the profits as shown in the accounts books should be accepted. In support of this contention he relied on the decision in Globe Theatres v. Chief Judge, SMCC AIR. 1947 Bom. 108. and the decision of the Supreme court in Muncpl. Corpn. , Greater Bombay v. RWI Tarf Club AIR. 1968 SC. 425. In support of this contention he relied on the decision in Globe Theatres v. Chief Judge, SMCC AIR. 1947 Bom. 108. and the decision of the Supreme court in Muncpl. Corpn. , Greater Bombay v. RWI Tarf Club AIR. 1968 SC. 425. He also relied on a passage in Halsbury's Lawa of England, (3rd Edn. Vol. 32) P. 77 para 108, which reads thus : 108. Valuation on the profits basis.-In the absence of rental evidence of value, the accounts, receipts or profits of the occupier of the hereditament may the relevant. The profits themselves are not rateable but they may serve to indicate the sent at which the hereditament might reasonably be expected to let, particularly where profit is the motive of the hypothetical tenant in taking the hereditament, or where the trade can only be carried on upon that hereditament. Profits have been taken into consideration in the valuation for rating of for instance public utility undertakings such as water-works, docks and harbours licensed premises, railway refreshment rooms, hotels, cattle lairage a toll bridge, racecourses, football stadia, markets, mines, quarries and brick-fields, a zoo, a radio relay system, piers, caravan sites, cemetery companies and a cinema. ( 7 ) THE rent to be ascertained is that which the hypothetical tenant would pay. The inquiry must therefore embrace the whole of the profits made at the hereditament, although a part of them does not enure to the actual occupier, and failure on the part of the occupier to take profits which it is open to him to take must be disregarded. The occupier of a hereditament cannot be compelled to disclose his profits or trading figures in valuation proceedings for rating. " in the Bombay decision, Kania, J. (as he then was) has observed thus at P. 112 : now, if the profits of a tenant are a recognised method and point to be considered in arriving at the annual letting value, how are they to be ascertained? In the ordinary course the tenant or landlord is not obliged to produce his books of account. In fact it has been recognised that they are generally reluctant to allow a roving inquiry into their business, when the point to be determined is only the rateable value of the premies. In the ordinary course the tenant or landlord is not obliged to produce his books of account. In fact it has been recognised that they are generally reluctant to allow a roving inquiry into their business, when the point to be determined is only the rateable value of the premies. In cases where the books are either not produced or not available or not considered reliable, by what method the rating authority can fix the annual letting value? In the case of a cinema, a percentage of the sitting accommodation, according to the text books, is a recognised method. ( 8 ) IN the Supreme Court decision relied on, this is what has been stated at page 429 : the gross receipts form the starting point of the calculation and they are those shown in the assessee's accounts for the account year concluded last before the making of the proposal. When these have been ascertained, the next step is to deduct therefrom the expenses of earning those receipts, the cost of repairs, insurance and other expenses necessary to maintain the premises in a state to command the hypothetical rent. The remaining balance is divisible between the tenant, that is, the tenant's share, the landlord, that is, the hypothetical rent or net annual valise and rates. The tenant's share is often estimated by applying a percentage to the tenant's capital or it may be directly taken as a proportion of the divisible balance or by applying a percentage to the receipts. It must be remembered that it is not the profits which are rateable; they serve to indicate the rent at which the premises might reasonably be expected to let, particularly where profit is the motive of the hypothetical tenant in taking the hereditament. ( 9 ) IN view of the decision of the Supreme Court it ia clear that the gross receipts form the starting point of the calculation and the said receipts have to be calculated from the assessee's accounts for the accounting year concluded last before the making of the proposal. It is only where the accounts are not produced or are not reliable, the same can be rejected and the gross profits estimated. In the instant case, respondents 2 and 3 have not assigned any valid reason for rejection of the account books offered to be produced by the petitioner. It is only where the accounts are not produced or are not reliable, the same can be rejected and the gross profits estimated. In the instant case, respondents 2 and 3 have not assigned any valid reason for rejection of the account books offered to be produced by the petitioner. It is not open to them to arbitrarily reject the same. In our opinion, the second ground urged by the Learned Counsel for the petitioner is also valid. The income of Rs. 30,000 from short films and slides cannot be considered as rent derived from the premises. The said income arises as a result of installation of necessary cinematograph equipment and involves expenditure on electricity, technical services etc. The said income could be taken only as part of the profits for the purpose of computation of the annual value. ( 10 ) RESPONDENT 2 has made an allowance of twenty per cent of the profits towards ' service and establishment charges. In paragraph 15 of the affidavit filed in support of the writ petition it has been alleged that respondent 2 has allowed in the. case of another cinema theatre thirty per cent towards service and establishment' in Appeal No. TAC. 456/68-69 dt. 7-10-1968 in arriving at the annual letting value. Respondents have not filed any counter-affidavit disputing the averment made in the affidavit filed in support of the writ petition. If respondent 2 has allowed thrity percent towards ' service and establishment' charges in the case of another theatre, he cannot arbitrarily single out the petitioner's theatre and make allowance at a lesser rate. ( 11 ) THE learned Counsel for the petitioner did not dispute the adoption of eight per cent for determination of letting value. Since all the grounds urged by the learned Counsel for the petitioner are upheld, the orders made by respondents 3 and 2 in the proceedings for assessment of the petitioner's property municipal No. 255 Subedar Chatram road, Bangalore, cannot be sustained. Accordingly, we allow this writ petition, quash the order of respondent 3 dt. 17-8-1968 (Ex. A) and the order of respondent 2 dt. 24-7-1970 (Ex. F) and the notice of demand (Ex. G) made by respondent 3 pursuant to the order of respondent 2, to the extent that it relates to the assessment of property tax on municipal no. Accordingly, we allow this writ petition, quash the order of respondent 3 dt. 17-8-1968 (Ex. A) and the order of respondent 2 dt. 24-7-1970 (Ex. F) and the notice of demand (Ex. G) made by respondent 3 pursuant to the order of respondent 2, to the extent that it relates to the assessment of property tax on municipal no. 255 of Subedar Chatram Road, Bangalore, reserving liberty to respondent 3 to make a fresh assessment in accordance with law and in the light of this order. It is ordered accordingly. Petitioner is entitled to its costs. --- *** --- .