Rate - Definition - Law Dictionary Home Dictionary Definition rate

Definition :

Rate, A contribution levied by some public body for a public purpose, as a poor rate, a highway rate, a sewers rate, upon, as a general rule, the occupiers of property within a parish or other area.

Proportional or relative value; the proportion of which quantity or value is adjusted, Black's Law Dictionary, 7th Edn., p. 1268.

The term 'rate' is also used to mean a charge by a water, gas, railway, or other public undertaking for services rendered e.g., (English) Railways Act, 1921, s. 20; Metropolitan Water Board Charges Act, 1921 (11 & 12 Geo. 5, c. xciv.).

The poor rate was levied under the (English) Poor Relief Act, 1601 (43 Eliz. s. 2), on the occupiers in each parish of 'lands, houses, tithes, coal mines, or saleable underwoods,' and the (English) Rating Act, 1874, extended the liability to rates to: (1) land used for a plantation or a wood, or for the growth of saleable underwood, and not subject to any right of common; (2) rights of fowling, shooting, taking, or killing game, or rabbits, and of fishing when severed from the occupation of the land; and (3) mines of every kind (e.g., iron mines) not mentioned in the Act of Elizabeth.

As between landlord and tenant rates are ordinarily paid by the tenant, but the rating of the landlord instead of the tenant is provided for by the Act of 1925, s. 11, superseding the (English) Poor Rate Assessment and Collection Act, 1869, and the (English) Public Health Act,1875, s. 211, in cases where the rateable value does not exceed 20l. in the Metropolis, or 16l. 5s. or, as a rule, 13l. in other districts. Personal property is not rateable, and stock in trade is expressly excepted by the temporary (English) Poor Rate Exemption Act, 1840, made permanent by the Expiring Laws Act, 1922.

The multiplicity of rates leviable by public bodies for public purposes was simplified by the (English) Rating and Valuation Act, 1925. By this Act one general rate replaces all the rates formerly made by the respective authorities having power to raise money by a public rate, the only exception being a special rate in rural districts for lighting under the (English) Lighting and Watching Act, 1833 (3 & 4 Will. 4, c. 90), the (English) Local Government Act, 1894 (56 & 57 Vict. c. 73), or special expenses specified in the (English) Public Health Act, 1875, s. 229.

The rating areas are either urban or rural. The rating authority in each area is the council of the county borough, burough or urban district having jurisdiction over the area; in rural rating areas the authority is the rural district council. The general rate is raised on so much in the pound on the rateable value of each hereditament in rateable occupation according to the valuation list. Contributions required by bodies such as the county council entitled out of the general rate are obtained by precepts to the rating authority requiring a levy of a specified amount in the pound calculated on the authority's estimate of the produce of a penny rate in its area: see the Rating and Valuation Act, 1925, and Konstam's Modern Law of Rating,' and also QUARTER-RATING. For the valuation of railways, see the Railways Valuation for Rating Act, 1930 (20 & 21 Geo. 5, c. 24); RAILWAYS. See CHURCH RATES.

'Rates' is often used in the sense of a standard or measure. Provided the tax is computable by the application of a prescribed standard or measure, though not directly related to taxable income, it maybe called tax computed at a certain rate, Sundaram Co. (Private) Ltd. v. Commissioner of Income-tax, AIR 1968 SC 124: (1967) 3 SCR 798.

A Municipality cannot impose a tax, but it can impose rate on the annual letting value of the lands or buildings, Century Spinning and Manufacturing Co. Ltd. v. District Municipality of Ulhasnagar, AIR 1968 SC 859: (1968) 2 SCR 211.

Includes any fare, freight or any other charge for the carriage of any passenger or goods. [Railways Act, 1989, s. 2 (35)]

The word 'rate' had not been defined in the Act but it has a well known meaning. In Gordhandas's case, AIR 1963 SC 1742: 1964 (2) SCR 608, Supreme Court examined various statutes bearing on the English Rating Law and held that the word ''rate' was used with respect to a tax which was levied on the net annual value or rateable value of lands and buildings and not on their capital value, but capital value could be adopted as the basis for working out the annual value, Godhara Borough Muncipality v. Godhara Electricity Co. Ltd., AIR 1968 SC 1504: (1968) 3 SCR 481.

The word 'rate' had acquired a special meaning in legislative practice, Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality, AIR 1970 SC 192: (1969) 2 SCC 283: (1970) 1 SCR 388.

The expression 'rate' is generally used in the same sense as the expression 'cess', Sarojini Tea Company (P) Ltd. v. Collector, AIR 1992 SC 1264 (1271).

Rate, includes 'any fare, charge or other payment for the carriage of any passenger, animal or goods, Jagjit Cotton Textile Mills v. Chief Commercial Superintendent, (1998) 5 SCC 126.

Rate, merely means the scale or amount of any other charges, Union of India v. Motilal Sugar Mills Co-op. Pvt. Ltd., AIR 1969 SC 630: (1969) 1 SCC 320.

Rate, must be understood whatever it might in its technical sense mean, to have been used in the statute to describe a tax the basis of which can be capital value, Patel Gordhandas Hargovindas v. Municipality Commissioner, Ahmedabad, AIR 1963 SC 1742; Godhara Borough Municipality Godhara v. Godhara Electricity Co. Ltd., AIR 1968 SC 1504.