Judgment PARAMJEET SINGH, J. Instant writ petition has been filed under Articles 226/227 of the Constitution of India for issuance of writ in the nature of certiorari for quashing the order dated 16.10.2000 (Annexure P-5) and order dated 07.04.2004 (Annexure P-6) passed by Principal Secretary, Local Government, Punjab, whereby revision petition filed by respondent No.3 has been allowed. Brief facts of the case are that petitioner – Punjab State Warehousing Corporation (for short 'the Corporation') – constituted under Section 18 of the Warehousing Corporation Act, 1962 is a statutory authority under Article 12 of the Constitution of India. The Corporation has its godowns in different cities of Punjab for storage of foodgrains. In Zira town also the Corporation has its godowns. The Municipal Council, Zira (earlier known as Municipal Committee) was charging house tax at the rate of Rs.8322/-per year till 1984. The Municipal Council reassessed and decided to impose house tax of Rs.1,33,188.30 vide its order dated 12.06.1987 for the year 1987-88. The Corporation deposited an amount of Rs.88,902.11 vide receipt No.01/102 dated 02.07.1987 and filed an appeal against the order dated 12.06.1987 before the competent authority i.e. Additional Deputy Commissioner, Ferozepur, which was accepted vide order dated 26.08.1987 and case was remanded for fresh decision. It is pleaded in the writ petition that Municipal Council instead of hearing and deciding the case remanded by the Additional Deputy Commissioner, issued a notice under Section 68-A of the Punjab Municipal Act, 1911 (for short 'the Act'), whereby house tax of Rs.1,70,848.50 was imposed. This order was made applicable from 01.10.1987. For the year 1988-89 house tax was imposed at the same rate i.e. Rs.1,70,848.50 vide its notice/bill No.4/2 dated 05.04.1988. The Corporation deposited this amount with the Municipal Council on 20.04.1988 and 20.04.1989 after availing 10% rebate. The Corporation challenged the said notice issued under Section 68-A by filing a civil suit. In the civil suit, Municipal Council made a statement that the notice has been withdrawn and recovery would be effected as per the decision of the Additional Deputy Commissioner, Ferozepur. During the pendency of civil suit, Municipal Council further imposed house tax to the tune of Rs.1,33,188.30 vide its order dated 04.06.1990. In the civil suit, Municipal Council made a statement that the notice has been withdrawn and recovery would be effected as per the decision of the Additional Deputy Commissioner, Ferozepur. During the pendency of civil suit, Municipal Council further imposed house tax to the tune of Rs.1,33,188.30 vide its order dated 04.06.1990. However, the Corporation deposited the tax for the year 1990-91 to the tune of Rs.1,19,879.47 on 03.10.1990 after availing 10% rebate and filed appeal against the order dated 04.06.1990 before the Additional Deputy Commissioner, Ferozepur, which was accepted and case was remanded back to the Municipal Council vide order dated 26.11.1990. The Corporation filed a suit for recovery of Rs.4,61,668.71 being the amount illegally recovered by the Municipal Council for the years 1987-88 to 1989-90. The said suit was decreed vide judgment and decree dated 14.02.1994 (Annexure P-2). Thereafter the Municipal Council continued to assess the house tax taking the capacity of godowns as 1,89,000 bags, 75% of it was treated as utilized capacity i.e. 1,41,750 bags, rent at the rate of 25 paise per bag per month which comes to Rs.35,437.50, annual rental value was assessed as Rs.4,25,250/-, depreciation was assessed as Rs.42,525/-@ 10%, tenable annual rental value was ultimately determined as Rs.3,82,725/-and house tax being 15% per annum of the annual rental value was assessed as Rs.57,408.75. The matter was agitated before the appropriate authorities in appeals, revisions etc. and ultimately respondent No.1 allowed revision of the Municipal Council vide order dated 16.10.2000 ( Annexure P-5) wherein correction was made on 07.04.2004 (Annexure P-6). Hence, this writ petition by the petitioner. Upon notice respondents appeared and filed their written statement. It was admitted that Corporation has its godowns in Zira Town which falls within the municipal limits of Zira. In the godowns Corporation is storing foodgrains and charging certain amount for the storage which includes maintenance of health of the foodgrains and other expenses. Earlier house tax was charged at the rate of Rs.8322/-per annum upto 1986. Under Section 67-A of the Act the assessment was revised and an amount of Rs.1,33,188.30 was imposed as house tax after calculating the same at the rate of 58/-paise per bag, which was the actual rent being charged by the Corporation. On appeal by Corporation before the Additional Deputy Commissioner, case was remanded back to the Municipal Council. Under Section 67-A of the Act the assessment was revised and an amount of Rs.1,33,188.30 was imposed as house tax after calculating the same at the rate of 58/-paise per bag, which was the actual rent being charged by the Corporation. On appeal by Corporation before the Additional Deputy Commissioner, case was remanded back to the Municipal Council. It was admitted that order dated 04.06.1990 was passed by the Municipal Council and the tax was assessed to the tune of Rs.1,33,188.30, however, the said order was made effective w.e.f. 01.04.1988. Various other grounds were taken which are not relevant for disposal of the present writ petition. I have heard the learned counsel for the parties and perused the record. Learned counsel for the petitioner vehemently contended that godowns/warehouses have been constructed at Zira for preservation and storage of foodgrains and other agricultural produce, fertilizers and commodities notified by the Government from time to time. Notices have been issued for deposit of house tax vide various bills, which have been impugned in the present writ petition. Petitioner has challenged the house tax for the years 1987-88, 1988-89, 1989-90, 1990-91 and 1991-92. It is contended by learned counsel for the petitioner that assessment has been made on the basis of per bag storage charges taken by the petitioner from the persons who deposited their foodgrains and other commodities. The rent per bag paid by the depositor of the foodgrains includes the expenses to be incurred by the petitioner for maintenance of health of the foodgrains and commodities. After deducting the expenses it comes much less. It is further contended that since the period in dispute in the present writ petition is with respect to the assessment of house tax, the provisions prevalent at that time are required to be taken into consideration as the definition of annual value has been amended in the year 1994 and the period in dispute for house tax assessment ranges from 1987 to 1992 i.e. prior to 1994 amendment. The assessment has not been done in accordance with the unamended Section 3 of the Act. As such the matter needs reconsideration. It is further contended by learned counsel for the petitioner that tax bills issued for imposition of house tax deserve to be quashed. The assessment has not been done in accordance with the unamended Section 3 of the Act. As such the matter needs reconsideration. It is further contended by learned counsel for the petitioner that tax bills issued for imposition of house tax deserve to be quashed. Per contra, learned counsel for respondent No.3 vehemently contended that tax was imposed by following procedure prescribed under the Act and the petitioner has admitted that it is charging rent from the depositors at the specific rate. Assessment is required to be carried out as per actual rent being received by the petitioner. As such there are no grounds warranting interference with the imposition of house tax. No objection with regard to incurring of expenses was taken by petitioner before the appellate authority or the house tax assessment committee. I have considered the contentions raised by learned counsel for the parties. In the light of arguments addressed by learned counsel for the parties sole question which requires consideration in this case is “how the house tax on the building of the petitioner is to be assessed?” Before I consider the issue involved in the present writ petition, it would be appropriate to give some background of the Act. The Act came into force in the State of Punjab before partition of the country on October 01, 1911. The Municipal Council, Zira was created after about four decades of coming into force of the Act. Section 61(1) of the Act authorizes the municipal committee to impose a tax to be paid by the owner on the buildings and lands not exceeding 15% of the annul value. The procedure to impose taxes is prescribed in Section 62 of the Act. Section 62-A empowers the Government to notify in the official gazette requiring the committee to impose any tax mentioned in Section 61. Procedure for preparation of assessment list in respect of immovable property is prescribed in Sections 63 to 86 of the Act. Under Section 63 committee shall cause to be prepared an assessment list of all the buildings and lands on which any tax is proposed to be imposed. Under Section 64 when the assessment list is completed a public notice is required to be issued and the list and copy thereof are provided for inspection of every person claiming to be either owner or occupier of the property in person or through his authorized agent. Under Section 64 when the assessment list is completed a public notice is required to be issued and the list and copy thereof are provided for inspection of every person claiming to be either owner or occupier of the property in person or through his authorized agent. As per provisions of Section 65 at the time of publication of such list public notice of a time not less than one month is to be given, thereafter the committee may also revise the assessment list. Objections to the assessment list can be made under Section 65(2) in writing or orally before the time fixed in the notice. Under Section 66 committee is required to enquire into the objections and afford opportunity of hearing to the persons raising such objections before finalizing the assessment list. If any amendment is made in the assessment list same shall be deposited with the committee's office and all the persons claiming to be owners or the occupiers or their authorized agents may inspect the same and committee is also required to issue public notice that it is so open for inspection. Further amendment can be carried out under Section 67. It needs to be mentioned that the assessment is made on the basis of value defined under Section 3(1) of the Act. Section 68 provides that the assessment list will be valid for five years. After the expiry of five years annual value can be redetermined and reassessment can be carried out. Further amendment of list in certain cases is provided under Section 68-A that earlier the property has been erroneously valued or assessed through fraud, accident or mistake, whether on the part of the committee or of the assessee. Section 69 provides that no charge of demand of any tax shall be impeached or affected by reason of any mistake in the name, residence, place of business or occupation of any person liable to pay tax or any mistake in the amount of tax or clerical error or other defect of form. Section 70 authorises the committee to exempt a building in regard to taxes for a period not exceeding one year. If such a resolution is passed the same is required to be confirmed by the Government. Section 70 authorises the committee to exempt a building in regard to taxes for a period not exceeding one year. If such a resolution is passed the same is required to be confirmed by the Government. Section 71 empowers the State Government to exempt whole or in part, the payment of any house tax by any person or class of persons or any property from tax. Section 72 refers to remission of tax on unoccupied immovable property. Section 73 imposes duty on every person to furnish true information regarding liability to municipal taxation. Under Section 74 notice is required to be given to the committee of all transfers of title of person primarily liable to payment of property tax. Section 75 refers to power of entry for the purpose of valuation or taxation. Section 79 specifies that subject to provisions of Sections 62(7) & (8) and 66 any tax imposed under this chapter and payable periodically shall be payable on such dates as are mentioned therein. Under Section 80 recovery of taxes payable by the owner can be made. Under Section 81 recovery of taxes and any arrears can also be effected. Section 84 provides for appeal against the assessment or levy of any tax or against the refusal to refund the tax. Section 85 provides the limitation for appeal. Section 86 states that taxation shall not be questioned except under this Act. Under Section 81 recovery of taxes and any arrears can also be effected. Section 84 provides for appeal against the assessment or levy of any tax or against the refusal to refund the tax. Section 85 provides the limitation for appeal. Section 86 states that taxation shall not be questioned except under this Act. It would be apposite to reproduce Section 3(1) of the unamended Act prior to 1994 as applicable in this case which defines annual value as under: - “(i) 'annual value' means - (a) in the case of land, the gross annual rent at which it may reasonably be expected to let from year to year : Provided that in the case of land assessed to land-revenue or of which the land-revenue has been wholly or in part released, compounded for, redeemed or assigned, the annual value shall, if the State Government so direct, be deemed to be double the aggregate of the following amounts, namely :- (i) the amount of the land-revenue for the time being assessed on the land whether such assessment is leviable or not; or when the land revenue has been wholly or in part compounded for or redeemed, the amount which, but for such composition, or redemption, would have been leviable; and (ii) when the improvement of the land due to canal irrigation has been excluded from account in assessing the land-revenue, the amount of owner's rate or water advantage rate or other rate imposed in respect of such improvement; (b) in the case of any house or building, the gross annual rent at which such house or building, together with its appurtenances & any furniture that may be let for use or enjoyment therewith, may reasonably be expected to let from year to year, subject to the following deductions ; (i) such deductions not exceeding 20 per cent of the gross annual rent as the committee in each particular case may consider a reasonable allowance on account of the furniture let herewith; (ii) a deduction of 10 per cent for the cost of repairs and for all other expenses necessary to maintain the building in a state to command such gross annual rent. The deduction under this sub-clause shall be calculated on the balance of the gross annual rent after the deduction (if any) under sub clause (i) : (iii) where land is let with a building, such deduction, not exceeding 20 per cent of the gross annual rent, s the Committee in each particular case may consider reasonable on account of the actual expenditure, if any, annually incurred by the owner on the upkeep of the land in a state to command such gross annual rent; Explanation I :-For the purposes of this clause it is immaterial whether the house or building, and the furniture and the land let for use or enjoyment therewith, are let by the same contract or by different contracts, and if by different contracts, whether such contracts are made simultaneously or at different times. Explanation II :-The term “gross annual rent” shall not include any tax payable by the owner in respect of which the owner and tenant have agreed that it shall be paid by the tenant. (c) in the case of any house or building, the gross annual rent of which cannot be determined under clause (b), 5 per cent on the sum obtained by adding the estimated present cost of erecting the building, less such amount as the committee may deem reasonable to be deducted on account of depreciation (if any) to the estimated market value of the site and any land attached to the house or building. Provided that - (i) in the calculation of the annual value of any premises no account shall be taken of any machinery thereon; (ii) when building is occupied by the owner under such exceptional circumstances as to render a valuation at 5 per cent on the cost of erecting the building, less depreciation, excessive, a lower percentage may be taken.” Perusal of Section 3(1) of the Act reveals that in case of any house or building gross annual rent is to be determined on the amount at which it may reasonably be expected to let from year to year subject to certain deductions. It has been settled by a catena of decisions that it is the fair rent which is reasonably expected at a place where a rent control law is in force and restricts the amounts of rent to fair rent. It has been settled by a catena of decisions that it is the fair rent which is reasonably expected at a place where a rent control law is in force and restricts the amounts of rent to fair rent. A Full Bench of this Court in Banarsi Dass Mahajan v. State of Punjab and another, 1990(1) RRR 182 examined the issue of applicability of principle of fair rent and upheld the same. Similarly a Division Bench of this Court in M/s Jagjit Cotton Textile Mills Ltd., Phagwara, through Mr. S.G. Viyas, Chief Accountant v. The State of Punjab and others, 1991(1) RRR 62 examined the question in detail and held that annual rental value has to be fixed in accordance with the principles laid down in rent control law for the purpose of fair rent. Prior to this, there were two judgments i.e. Corporation of Calcutta v. Padma Devi, AIR 1962 Supreme Court 151 and Devan Daulat Rai Kapoor etc. v. New Delhi Municipal Committee and another, 1980(1) RCR 618. The question about the applicability of fair rent for the purpose of determining the annual rental value was settled and the view taken was to the effect that where rent control law is in force and the property is situated within that area, the provisions of fair rent are to be applicable for determining annual rental value. In Dr. Balbir Singh and others v. M/s M.C.D. And others, 1985(1) RCR 218, the view, that fair rent principle shall be adopted for the purpose of determining the annual rental value of a property which is subject to rent control laws. Taking into consideration above settled principles of law, again in Parshotam Lal Gupta v. Municipal Committee, Ferozepur, 1997(3) RCR (Civil) 340 this Court in view of the provisions of sub-clause (b) of clause (1) of Section 3 of the Act and the earlier decisions of the Hon'ble Supreme Court and this Court, quashed the order of the house tax assessment by the committee and the order in appeal and direction was issued to re-determine the annual value of the property in question on the basis of fair rent as was determinable under the East Punjab Urban Rent Restriction Act and the house tax, which was paid in excess, if any, was to be refunded by the committee to the petitioner therein. Similar view was taken by this Court in Jainti Parshad Jain v. Municipal Committee, Ferozepore, 1997(3) RCR (Civil) 390. Recently, Hon'ble Supreme Court in Assistant General Manager, Central Bank of India etc. v. Commissioner, Municipal Corporation for the City of Ahmedabad etc., Judgments Today 1995(4) SC 310 examined the issue whether standard rent was required to be determined under Section 11 of the Bombay Rent Act in respect of a building, land or premises. In that case it was noticed that relevant provision contained in proviso (aa) to sub-clause (ii) of clause (1-A) of Section 2 of the Municipal Corporations Act incorporated a non obstante clause whereby the provisions of any other law, for the time being in force, were excluded. In that light, it was held that standard rent was not required to be fixed under Section 11 of the Bombay Rent Act. Earlier decisions of the Hon'ble Supreme Court in The Corporation of Calcutta v. Smt. Padma Debi and others, AIR 1962 SC 151 , Corporation of Calcutta v. Life Insurance Corporation of India 1971(1) SCR 248 and Guntur Municipal Council v. Guntur Town Rate Payers' Association etc., 1970 Rent Control Reporter 967 were distinguished on the ground that under the relevant Municipal Act there was no non obstante clause in the provisions in respect of annual rental value. Admittedly, in Section 3(1) of the Act there is no non obstante clause as such the principle laid down in Smt. Padma Debi and others, Life Insurance Corporation of India and Guntur Town Rate Payers' Association (supra) will be applicable. Another issue which arises in the present case is “whether the actual rent per bag charged by the Municipal Council from the Corporation would be a measure for determining the annual value?” Identical provision was subject to interpretation in Devan Daulat Rai Kapoor etc. (supra), which was followed in Mrs. Shiela Kaushish v. CIT, 1981(4) SCC 121 . The question therein was whether the actual rent received from the tenant would form basis to determine the annual value. (supra), which was followed in Mrs. Shiela Kaushish v. CIT, 1981(4) SCC 121 . The question therein was whether the actual rent received from the tenant would form basis to determine the annual value. The Hon'ble Supreme Court considered the controversy and held as under: - “The argument of the Municipal Authorities was that since the standard rent of the building was not fixed by the Controller under section 9 of the Rent Act in any of the cases before the Court and in each of the cases the period of limitation prescribed by section 12 of the Rent Act for making an application for fixation of the standard rent had expired, the landlord in each case was entitled to continue to receive the contractual rent from the tenant without any legal impediment and hence the annual value of the building was not limited to the standard rent determinable in accordance with the principles laid down in the Rent Act, but was liable to be assessed by reference to the contractual rent recoverable by the landlord from the tenant. The Municipal Authorities urged that if it was not penal for the landlord to receive the contractual rent from the tenant, even if it be higher than the standard rent determinable under the provisions of the Rent Act, it would not be incorrect to say that the landlord could reasonably expect to let the building at the contractual rent and the contractual rent therefore provided a correct measure for determination of the annual value of the building. This argument was however rejected by the court and it was held that even if the standard rent of a building has not been fixed by the Controller under section 9 of the Rent Act, the landlord cannot reasonably expect to receive from a hypothetical tenant anything more than the standard rent determinable under the provisions of the Rent Act and this would be so equally whether the building has been let out to a tenant who has lost his right to apply for fixation of the standard rent by reason of expiration of the period of limitation prescribed by section 12 of the Rent Act or the building is self-occupied by the owner. Therefore, in either case, according to the definition of 'annual value' given in both statutes, the standard rent determinable under the provisions of the Rent Act and not the actual rent received by the landlord from the tenant would constitute the correct measure of the annual value of the building. The court pointed out that in each case the assessing authority would have to arrive at its own figure of the standard rent by applying the principles laid down in the Rent Act for determination of the standard rent and determine the annual value of the building on the basis of such figure of the standard rent. The court, on this view, negatived the attempt of the Municipal Authorities in each of the cases to determine the annual value of the building on the basis of the actual rent received by the landlord and observed that annual value of the building must be held to be limited by the measure of the standard rent determinable on the principles laid down in the Rent Act and it could not exceed such measure of the standard rent.” In the present case, the godowns constructed by the petitioner are not given on rent rather foodgrains and other agricultural commodities are stored in the bags and rent per bag is charged from the depositor. Rent paid per bag includes the charges which are paid to the petitioner for maintaining the health of foodgrains. To maintain the health of the foodgrains and to preserve the foodgrains in its actual state, as it is deposited, various types of expenses are incurred by the petitioner/Corporation. Maintenance and preservation costs are much more. Not only this, when the godowns remain empty even then empty-bins are sprayed with insecticides and fumigants. Cleaning and drying of grains is also a part of that. Various measures are taken to prevent the insect feeding, reproduction and to regulate the ground temperature. As such to take into account the actual rent received per bag for assessment of house tax apparently does not appear to be justified. It is also to be seen that total storage capacity of the godown has been taken for the purpose of assessing the house tax i.e. maximum number of bags that can be stored, multiplied by rent charged per bag. It is also to be seen that total storage capacity of the godown has been taken for the purpose of assessing the house tax i.e. maximum number of bags that can be stored, multiplied by rent charged per bag. Many a times, storage is seasonal and godowns and storage bins remain empty/vacant whereas the assessment is based on the annual basis because it is done once in five years atleast if not otherwise approved by the State Government. As such, in my opinion, to consider the per bag rent actually paid by the depositor cannot be a ground for assessment of house tax, although 75% occupancy of the godowns has been taken for assessing the annual value of the godowns. Rather Section 3(1)(b) specifies that annual value is to be assessed according to the fair rent as has been held in various cases cited above and not on the basis of per bag rent. In fact, annual value is the gross annual rent of the land or the building. The rent charged does not represent the true annual rental value and it has to be assessed in accordance with the principles of Rent Act. In view of the above discussion and the settled principles of law, provisions of the Act existed prior to 1994 amendment will apply to the assessment in question. In view of this, orders of assessing authority and the appellate authority and the bills submitted are set aside, case is remanded back to the house tax sub committee of the Municipal Council for re-assessment of house tax. It will be open to the municipal authorities to assess the house tax at its own level by applying the principle of fair rent and it is not necessary that it should first get the fair rent fixed from the Rent Controller under the provisions of the Rent Act. Parties through their counsel are directed to appear before respondent No.3 on 08.08.2014. Accordingly, writ petition is disposed of. The committee is directed to re-determine the amount of tax as indicated hereinabove.