(Prayer: Writ Petition filed under Article 226 of the Constitution of India for the issuance of a Writ of Certiorari to call for the records relating to the impugned demand notice of the respondents 1 and 2 dated 05.01.2016 and the consequential impugned proceedings of the second respondent dated 08.02.2016, quash the same.)
1. Challenging the demand of property tax issued by the respondent Corporation, the petitionerschool is before this Court.
2. The only contention which has been raised by the petitioner is that the respondent Corporation has no jurisdiction to levy property tax for the reason that as per Section 122 of the Madurai City Municipal Corporation Act the petitioner School is totally exempted from the purview of such tax. Further, the petitioner school has got huge buildings which are not assessed to property tax as per Section 122 (c) of the Municipal City Municipal Corporation Act, 1971. They are exempted from payment of property tax and there are no other enabling provision thereby authorizing the respondent municipal corporation to revoke such exemption. Therefore, the demand notice dated 05.01.2016 and the consequential proceedings of the second respondent dated 08.02.2016 are only without jurisdiction. In the absence of any enabling provision under the Madurai City Municipal corporation Act 1971 either under Section 122 or anyother independent provision or rules, the respondents have got no power or authority to levy property tax for the buildings owned by any educational institution within the city limits of Madurai City Municipal Corporation. The sum and substance of the contention of the petitioner in this Writ Petition is that the impugned order dated 08.02.2016 is not sustainable in law as the petitioner school is exempted from paying the urban land tax, which does not apply to the Madurai Corporation. Hence, the petitioner school challenges the impugned order as well as the consequential order issued by the Corporation.
3. Be that as it may, even at the stage of admission stage, when this Court raised a question regarding maintainability of the Writ Petition, the petitioner school relied upon a decision of the reported judgment made in (2003) 3 M.L.J., The R.C.Diocese of Madurai Vs. Madurai City Municipal Corporation, 1997(1) CTC 331, PSG and Sons Charities Vs. City Municipal Corporation, Coimbatore and 2010 (1) CWC 782, Madurai College Vs. The Commissioner, Corporation of Madurai, for the proposition that the property, namely, the petitioner school building and the hostel building are exempted from the purview of the tax.
4. Per contra, the learned Standing Counsel appearing for the Madurai Corporation submitted that first of all, this is only a show cause notice giving 15 days time to state their objections. Secondly, even if the petitioner treats that the order impugned in this Writ Petition is an assessment order, there is an appeal provision. Then, the petitioner school can seek appropriate remedy before the tribunal. To sum up, this Writ Petition is highly premature. It is open to the petitioner to raise all the points canvassed in this Writ Petition including jurisdiction before the appellate authority as well as before the tribunal. Even the petitioner school request for cancellation of assessment notice on the ground that they are exempted from the tax on the strength of the government order relied by them was rejected by the second respondent as the said Government order is not applicable to the petitioner school. In this connection, he would rely upon the Full Bench decision of this Court reported in 2009 (5) CTC 289, The President, K.Vellakulam Panchayat Vs. Kamaraj College of Engineering and Technology for the proposition regarding the levy of property tax to all the schools and colleges in the Village Panchayat. Even when the Schools or Colleges which are situated in the remote villages in the Panchayat are paying the property tax, which has also been upheld by the Full Bench decision of this Court, when admittely the petitioner school situates within the Municipal Corporation, they are liable to pay the property tax without protest. Further, the petitioner school is not philanthropic institution when they charge fee from the students in a different form and therefore, their request that they are exempted from paying property tax cannot be sustained in the eye of law. Hence, he prayed for sustaining the impugned orders.
5. Heard both parties and perused the materials available on record.
6. As rightly pointed out earlier, this Writ Petition is not at all maintainable for the simple reason that it is only a proposed levy or demand, as the case may be, asking the petitioner School to give their objections within 15 days from the date of receipt of the notice issued by the Corporation. Admittedly, the time got over by 23.02.2016. Whereas, the petitioner has preferred this Writ Petition on 29.02.2016. Further, a perusal of the impugned order reveals the fact that the assessment notice or demand notice has been made on the basis of the measurements available in respect of the property. In fact, they have already stated their measurements and therefore, now the proposal has been issued by the Corporation seeking for their objection. In other ground also, this Writ Petition is not maintainable for the reason that the petitioner sent a representation calling upon the Corporation to cancel the very proposal as they are exempted from the provisions of payment of urban land tax. It is to be seen that nonpayment of urban land tax, on the strength of the Government order , will not be a criteria or basis for grant of exemption in respect of the property tax as the said Government order is not applicable to the case on hand. Even assuming for a moment, if it is an assessment order under the City Municipal Corporation Act, when there is a Tribunal constituted, the petitioner School can very well prefer an appeal before the Tribunal. Without taking recourse of alternative remedy, he cannot seek remedy before this Court. On that ground also, this Writ Petition is not maintainable.
6.1. Insofar as the contention of the petitioner that no power is vested with the Corporation, it is always open to the petitioner that even this ground can also be raised before the tribunal. The argument of the petitioner cannot be accepted that there is no power under the Act, when a power to grant exemption has been specifically granted under Section 123 (c) of the Act, which implies there is a power to demand. Only if there is a power to demand, there can be a power to exempt. Admittedly when the petitioner has sought for exemption from levying the tax, definitely, the authority has got ever power to levy tax. No doubt, the petitioner has relied upon the decisions stated supra to state that the jurisdiction is not available with them. Unfortunately, the facts in that case does not pertain to the case on hand. In the case of 2010 (1) CWC 782, Madurai College Vs. The Commissioner, Corporation of Madurai, whether the levy could be made beyond a period of six years in view of amendment into Act 37 of 2008, by substituting 12 years retrospectively. There, this Hon'ble Court, held that even if the amendment is made it cannot be done it in a retrospective manner and it can only be done in a prospective manner. Therefore, the said decision will not rescue the petitioner.
6.2. Similarly, in respect of the decision reported in (2003) 3 M.L.J., The R.C.Diocese of Madurai Vs. Madurai City Municipal Corporation, which case arise out of the exemption granted under Section 122 (c) as amended by Act 42 of 1994, that was the case which is a church as well as seminary where a building which was utilised, whether it was within the purview of 122(c) of the Act. In view of the church being exempted and school attached for preachers, namely, who are also resident of the hostel and whether the building could be exempted was the question, which in no way connected with the present Writ Petition.
6.3. In the case of PSG and Sons Charities Vs. City Municipal Corporation, Coimbatore, reported in 1997 (1) CTC 331, whether the building used for Medical College and Hospitals were entitled for exemption merely on the ground that even payment made by patients for full payment of exemption cannot be a bar from claiming exemption. This case also will not be helpful to the petitioner.
7. Whereas, the Full Bench decision of this Hon'ble Court reported in 2009 (5) CTC 289, The President, K.Vellakulam Panchayat Vs. Kamaraj College of Engineering and Technology which arise when a levy was made in respect of Schools and Colleges has held that the Division Bench ruling reported in 2008 (1) CTC 449, Sriram Educational Trust Vs. The President,89, Perumalpatt Panchayat Union, the Division Bench has categorically held that it has not laid the correct law. In the Full Bench judgment reported in 2009 (5) CTC 289, The President, K.Vellakulam Panchayat Vs. Kamaraj College of Engineering and Technology, in paragraph Nos.17 to 19, it is held as follows:-
17. We have already noticed that Rule 15 is a subordinate legislation which cannot override the substantive provisions of the Act such as Sections 171(1), 172 and 176. Section 171(1) mandates the Village Panchayat to levy house tax on all the houses of the Village Panchayat. The mandate is also clear from Section 172, wherein the basis of levy of house tax has been prescribed. There is a prohibition from grant of exemption of surcharge or tax under Section 176 except in accordance with the rules. Therefore, if Rule 15 is read with the aforesaid Sections 171, 172 and 176, it is to be held that under Rule 15 it is not mandatory to grant exemption from house tax, but it an enabling provision allowing the Village Panchayat to grant exemption to a class of buildings as specified therein, if it so chooses. Rule 15 cannot be held to be mandatory to exempt a class of buildings from payment of house tax, which otherwise will run counter to Sections 171, 172 and 176 of the Act and may render Rule 15 ultra vires. Therefore, the word shall used in Rule 15 has to be read as may to give effect to the said rule of exemption.
18. We, accordingly, hold that the exemption prescribed under Rule 15 is not mandatory and is an enabling provision empowering the Village Panchayat or Panchayat Union to grant exemption to a class of buildings as specified therein. The corollary is that it is open for the Village Panchayat or Panchayat Union not to grant such exemption in favour of one or other class of such buildings. The Court cannot force the Panchayat to exercise its discretionary power to grant exemption to one or other class or buildings in absence of any decision taken by the Village Panchayat or Panchayat Union to grant such exemption. Once a Village Panchayat or Panchayat Union takes a decision to grant exemption in favour of one or other class of buildings, only in that case no discrimination can be made between two similarly situated persons and no order can be passed in an arbitrary manner.
Learned Single Judge, in the present case, and the Division Bench in Sriram Educational Trust (supra) having failed to notice the aforesaid aspect, we hold that the Division Bench in Sriram Educational Trust (supra) has not laid the correct law.
18. In view of our finding in the present case and as we find that the appellant has not decided to grant exemption to any of the educational institutions or other buildings under Rule 15, the respondent college having knowledge of the same and having paid the house tax since 2001-2002, we hold that the respondent-College was not entitled for grant of exemption nor it is entitled for refund of the house tax already paid.
8. The Full Bench has categorically held that the College and Educational institutions which are admittedly in the Panchayat level cannot seek for exemption, as a matter of right, even though there is an enabling provision for granting exemption to a class of buildings as specified therein, if it so chooses. When that being the case at the Panchayat level, can the petitioner school say that there is no specific provision under the Act to enable the respondent corporation to levy tax. The petitioner school heavily relies upon Section 122(c) of the Madurai City Municipal Act. Therefore, it is usefully extracted below:-
122.General exemption from property tax.
(c) (Buildings used for educational purpose including hostels attached thereto and places used for the charitable purposes) of sheltering the destitute or animals, and orphanages, homes and schools for the deaf and dumb, asylum for the aged and fallen women and such similar situations run purely on philanthropic lines as are approved by the council
9. Even when this Court scans through the said Section, the word used in the Section therein is 'philanthropic lines as are approved by the Council'. Admittedly, the petitioner school is not a philanthropic institution and it is not the case of the petitioner school that they are running the school without receiving fees or running the school totally free to the students. Further, in Section 122 (c) it is very clearly stated in respect of educational purpose building, the places used for charitable purpose can be exempted. Therefore, the person seeking for exemption should satisfy it is only for charitable purpose, it is used in philanthropic lines and that should be approved by the council when all these occurs only the exemption can be sought for. Merely because an exemption clause is available by virtue of the same mandatorily they cannot claim exemption as a matter of their right, as stated by the Full Bench cited supra. It is also a ratio decidendi of the Full Bench decision. Hence, they cannot seek it as of right. Therefore, the analogy applied by the Full Bench is to be taken note of. Merely, there is an exemption clause it will not bypass the main provisions of the Act as referred to in the Full Bench decision. Infact, in the notice it is clearly stated that it is a provisional assessment and that could be decided only after the show cause notice is followed by an explanation. If the petitioner school is not satisfied with the result, then there is an appeal tribunal constituted for the said purpose also. Therefore, the petitioner school has not at all made out any ground whatsoever to substantiate their claim. To sum up, when the institutions situate at the Panchayat level pays tax, this Court is really at a loss to understand how the petitioner school can claim that they are exempted from paying property tax as claimed by them. In such view of the matter, without hesitation, this Court has no choice but to dismiss this Writ Petition.
10. Accordingly, for the foregoing reasons and observations, this Writ Petition stands dismissed. No costs. Consequently, the connected miscellaneous petition is closed.