In our view, the factual allegations contained in the petition prima facie establish that in obtaining necessary building permits, incurring substantial acquisition and construction costs and then completing and filing the requisite application with the Town Assessor, petitioner acquired a vested right to the business tax exemption before respondents enacted any legislation rescinding their participation therein pursuant to subdivision 7 of section 485-b of the Real Property Tax Law. The statute provides in mandatory language that if an applicant demonstrates eligibility, the local assessor “shall” grant the exemption for the full 10-year period (Real Prop*411erty Tax Law, § 485-b, subd 4). From the Town Assessor’s letter of May 16, 1980, it is quite evident that petitioner had in fact established its eligibility for the benefits of section 485-b. Exemption was granted for purposes of county tax levies, and only denied as to town and school taxes because “it is no longer granted by the Town or School District”. Since the formal requirements of the statute had been complied with and petitioner was otherwise eligible, the right to the exemption was already in “existence” before the repealing legislation and could not thereafter be withdrawn (Real Property Tax Law, § 485-b, subd 7). This was certainly implied in Matter of Fiato v Town of Guilderland (91 AD2d 799, affd 59 NY2d 902), wherein this court, in denying an exemption because application therefor had not been made before repealers were enacted, stated “under the terms of section 485-b of the Real Property Tax Law an exemption does not exist until all procedures for obtaining an exemption set forth in that statute have been completed” {supra, at p 800).
In view of petitioner’s substantial investment in the property and its compliance with existing law on obtaining the exemption, it would be manifestly unfair to permit destruction of the statutory benefits in this case merely because the Town Assessor failed to act upon petitioner’s application or construction had not been 100% completed before the town and the school district rescinded local entitlement to the exemption. Vested rights of investing property owners have been protected from subsequent local legislation in analogous circumstances (Matter of Bayswater Health Related Facility v Karagheuzoff, 37 NY2d 408, 416; Town of Southampton v Todem Homes, 50 AD2d 844, 845). Moreover, once petitioner initially acquired a vested right to the exemption, it was entitled to the appropriate percentage thereof for each of the next ensuing 10 years. Section 485-b provides for the 10-year exemption on a single application; there is no requirement that the property owner reapply annually.
If, as we have concluded, the petition sufficiently alleged that petitioner acquired a vested right to the exemption for the full 10-year period, it follows that it likewise sufficiently alleged petitioner’s entitlement to a reduction in its *4121982 assessment to reflect the appropriate amount of the exemption applicable for that year.
Despite petitioner’s apparent entitlement to an exemption in 1982, the majority holds that it is precluded from seeking that relief because of the failure to make a timely challenge to the initial denial of the exemption in 1980. The majority views petitioner’s claim for the 1982 exemption as being based on the wrongful denial of the 1980 exemption and from this concludes that the current challenge is an impermissible “collateral” attack on the adverse 1980 determination. This would only be so, however, if entitlement to exemption in 1982 were somehow dependent on its having been granted in 1980. The majority’s reasoning totally fails to address the question of whether petitioner had acquired vested rights to the appropriate percentage exemption for each succeeding year of the statutory term of the exemption, in which case its right to an exemption in 1982 would not depend on having been granted the exemption in 1980. The majority’s rationale also overlooks a cardinal principle of assessment review, namely, that each annual assessment constitutes a new proceeding in which any prior assessment determination is not binding upon the parties. As stated in People ex rel. Hilton v Fahrenkopf (279 NY 49, 52-53): “It is of the essence of an assessment that it fixes value as of a certain time. Each annual proceeding is separate and distinct from every other. Year by year an assessor must use his own judgment and must verify the roll * * *. From these considerations it results that a prior judicial determination of value does not legally bind successor assessors.”
The 1980 and 1981 assessments of the subject property do not have any res judicata effect in this proceeding to review petitioner’s 1982 assessment (Matter of Group Health v Tax Comm., 93 AD2d 730, 731; Town of Harrison v County of Westchester, 34 Misc 2d 1020, 1030-1031, affd 18 AD2d 1136, affd 13 NY2d 258). Since the 1980 denial of the exemption was never actually litigated, obviously that ruling has no collateral estoppel effect (Capital Tel. Co. v Pattersonville Tel. Co., 56 NY2d 11, 21). Petitioner’s payment of its 1980 and 1981 property taxes without challenging denial of its right to a partial exemption for those years *413simply does not estop it from instituting the instant challenge to its 1982 assessment (see Matter of St. Luke’s Hosp. v Boyland, 12 NY2d 135, 145). Petitioner is not herein attempting to recoup any overpayments of its 1980 and 1981 taxes, it is availing itself of its statutory right to directly attack its 1982 assessment. Since petitioner is afforded that remedy for review of the assessor’s determination under article 7 of the Real Property Tax Law, the absence of any challenge to the initial denial of the exemption in 1980 does not constitute a bar under the doctrine of failure to exhaust administrative remedies (see Matter of Smith v Hoyt, 59 AD2d 1058, 1059).
On the basis of the foregoing, Special Term’s dismissal of the petition (119 Misc 2d 69) should be reversed.
Yesawich, Jr., J., concurs with Casey, J. P.; Weiss, J., concurs in a separate opinion; Mikoll and Levine, JJ., dissent and vote to reverse in an opinion by Levine, J.