Chitra Venkataraman, J.
1. The appellant/petitioners in these batch of writ appeal/writ petitions are educational institutions. They challenge the correctness of the demand for property tax under Section 172 of the Tamil Nadu Panchayats Act, 1994, on the ground that buildings used for educational purpose are exempt from liability under Rule 15(c) of the Tamil Nadu Village Panchayats (Assessment and Collection of Taxes) Rules, 1999.
2. It is seen that on the issue of exemption, there are two decisions of this Court taking two different views. In the decision reported in (2006) 3 MLJ 1068 (Kamaraj College of Engineering And Technology, Managing Board, rep. by its Secretary, Virudhunagar v. President, K. Vellakulam Panchayat, Madurai District), Justice P.Jyothimani considered the question of exemption on the assessment of house tax on the educational institutions under Rule 15(c) of the Tamil Nadu Village Panchayats (Assessment and Collection of Taxes) Rules, 1999. The learned Judge held that buildings used for educational purposes including hostels recognised by the State and other educational authorities, and irrespective of the fact as to whether they are aided or unaided or run on self-financing pattern are entitled to have the benefit of exemption from the levy of house tax as per Rule 15(c). Learned Judge held 'When once the approval is given by the competent authority or affiliation given by the Universities, then such educational institutions, whether they are aided or not, are deemed to be the educational institutions as in the general terms that, after the law relating to prohibition of capitation fee had been introduced by the legislation, there is no question of any commercial character in the educational institutions at all which are recognised'.
3. In W.P. No. 48068 of 2002, by order dated 30.4.2003, Justice P.K.Misra,J. had an occasion to consider the very same issue of exemption on the levy of house tax under the Tamil Nadu Panchayats Village (Assessment and Collection of Taxes) Rules, 1999 on buildings used for educational purposes. The decision reported in (2006) 3 MLJ 1068 (Kamaraj College of Engineering And Technology, Managing Board, rep. by its Secretary, Virudhunagar v. President, K. Vellakulam Panchayat, Madurai District), however, was not placed before the learned single Judge. Going through Rule 15, the learned single Judge held that charitable organisations running hostels or libraries or shelter for animals alone would be eligible for exemption. The learned Judge held, where the person using the hostels or libraries paid rent, it could not be said that taxes are not leviable. The learned Judge pointed out that 'A reading of the entire provisions make it clear that the intention is to exempt charitable organisations which are running such hostels or libraries or shelters for animals. Where however the persons using the hostels and libraries are paying rent, it cannot be said that tax is not leviable. The intention seems to be for the benefit of the charitable organisation and not for organisations which are collecting money for particular use.' Referring to the saving clause in Rule 15(c) and the old Rule under the 1958 Act, learned single Judge held that in view of the decision reported in : (1990)2MLJ381 (Nepco Schlenk Engineering College, Sivakasi v. The President Keriseri Panchayat and Ors.), the benefit of exemption would apply to institutions in spite of charging rent from the occupants for the period 1985 to 2003. The present provision after 2003, however, restricted the exemption to institutions run on charitable basis. The said order of Justice P.K. Misra is now under challenge in W.A. No. 2080 of 2003. Considering the conflicting views, writ petitions are placed before the Division Bench for considering the claim for exemption along with the writ appeals.
4. In all these writ petitions, the educational institutions are not charitable institutions. The sum and substance of the contentions of the petitioners herein is that buildings used for educational purposes and the hostels attached thereto are entitled to the benefit of tax exemption. The charitable character is not of any relevance to the consideration of the application of the exemption provisions. The respondents however support the order of the learned single Judge holding that charitable educational institutions alone qualify for exemption under the provisions of Rule 15(c).
5. Before going into the individual contentions of the counsel appearing in different writ petitions and writ appeals, the provisions of the Act of 1994 and the Rules need to be adverted to. Section 172 of the Tamil Nadu Panchayats Act, 1994, is the charging provision to levy house tax on all houses in every panchayat, village on the basis on which such tax was levied in the local area concerned immediately before the commencement of this Act or on the basis of classified plinth area at the rates specified in Schedule I, as the village panchayat may adopt subject to the provisions of Sub-section (3). Sub section (3) deals with the manner of levy. It states, by notification, the Government shall, determine in regard to any panchayat, village or any class of panchayat villages, whether the house-tax shall be levied every half-year or year having regard to the classification of the local areas, annual receipts of the village panchayat and as given under the various sub clauses to the Sub Section. Under Sub Section (4), the Government is empowered to make Rules to provide for specifying the persons who shall be liable to pay the tax and the giving of notices of transfer of houses; the circumstances in which, and the conditions subject to which, houses constructed, reconstructed or demolished, or situated in areas included in, or excluded from the panchayat village during any half-year or year, shall be liable or cease to be liable to the whole or any portion of the tax. Section 176 of the Act contemplates grant of exemption under the Act by the panchayat or the panchayat union in accordance with the rules framed. The section also empowers the state to grant exemption in any particular case. In terms of Sub section (3) of Section 173, the Tamil Nadu Village Panchayat (Assessment and Collection of Taxes) Rules, 1999 was formulated under G.O.Ms. No. 255, Rural Development Department dated 13.12.1999. The Rules provided for the procedure for the determination of assessment of tax. Rule 6 gives the basis of levy of house tax. It states that any village panchayat shall have the power to assess the levy and collect the house tax as the basis referred to under Section 172 in accordance with the provisions of the Act.
6. As in any other tax enactment, Rule 15 contains the exemption provision. for the purpose of our consideration, Rule 15(c), along with the provisos on which great reliance was placed by the respondents in understanding the scope of the exemption, is of relevance. Rule 15 (c) reads as follows:
Rule 15 - Exemption of specified classes of houses from house-tax.-- The following buildings shall, if they fall within the meaning of house as defined in the Act, be exempt from the house-tax --
(a) ...
(b) ...
(c) buildings used for educational purposes including hostels and libraries which are open to the public and public buildings used for charitable purpose of sheltering the destitutes or animals.
(d) to (k) ...
Provided that nothing contained in Clauses (a) and (c) shall be deemed to exempt from house-tax, if any building for which rent is payable by the person or persons using the same for the purposes referred to in the said clauses:
Provided further that educational institution (nor commercial in nature) exempted from levy of house-tax, immediately before the commencement of the Act shall continue to be exempted under the said Act. Explanation. -- The exemption granted under this rule shall not extend to residential quarters attached to schools or colleges not being the hostels or residential quarters attached to hospitals, dispensaries and libraries.
7. A reading of the Rule 15 shows that apart from panchayat buildings and Government maintained buildings, the various Sub Rules list out buildings entitled to exemption subject to the qualification as to the character of use and purpose provided for therein. On a reading of the exemption provision, it is clear that wherever the Rule contemplated a qualification to any class of houses as a condition for availing the exemption, it is specific enough to say so. Take for instance Sub clause (a) relating to buildings set apart for public worship actually used so or used for no other purpose; Clause (b) exempting choultries that are rent free and those that charge rent, used the same for charitable purposes; Clause (c) libraries which are open to public, and public buildings used for charitable purpose of sheltering the destitutes or animals are exempt from tax. So too, Charitable hospitals, dispensaries and other buildings exclusively used for charitable purposes (Sub Rule (e)). As for buildings used for educational purposes are concerned, the Sub Rule 15(c) stops by referring to the use of the building as for educational purposes including hostels. There are no other qualifying words to attend on to the phrase 'buildings used for educational purposes including hostels'. There are two provisios which carve out the exceptions to the claim for the exemption -- rented buildings used for purposes referred to under Sub rule (a) and (c) are not entitled to claim the benefit of exemption. Under the second proviso, educational institutions not commercial in nature exempted from house tax immediately before the commencement of the Act shall continue to be exempted under the said Act.
8. Mr.R. Muthukumaraswamy, learned senior counsel appearing in W.P. Nos. 41399 of 2005, 12049, 12696 and 17030 of 2006 and W.P. Nos. 1314 and 6112 of 2007, submitted that Rule 15(c) contemplated exemption of buildings used for educational purposes and the hostels thereto are entitled to exemption. In considering the claim, the question of the charitable character or charging of fee by the educational institutions does not enter into consideration. He referred to the decision reported in : AIR2003SC3724 (Islamic Academy of Education v. State of Karnataka) paragraph 7 at page 700 to impress on the fact that Apex Court recognised the need for the educational institution to fix the fee structure taking into consideration the need to generate funds to run the institution and to provide facilities necessary for the benefit of the students. Hence, it is not open to the authorities concerned to create an artificial distinction among institutions run on charitable basis and those charging the fee; as such classification is not contemplated under the Rules to deny the benefit of the exemption.
9. Mr.R. Muthukumaraswamy, learned senior counsel, also referred to the decision reported in AIR 1931 Mad 55 (Municipal Council Trichinopoly v. S.Venkatarama Aiyar) to explain the phrase 'open to public', apart from : [1979]2SCR357 (TELCO v. STO) and : 1989CriLJ1 (Kehar Singh v. State Delhi Admn.) to impress on the meaning of the term 'Public' and further submitted that the said phrase qualified only a library. Referring to the need for going by the language of the provisos on the aspect of interpretation, he referred to the decision reported in : [1991]2SCR802 (Tribhovandas Haribhai Tamboli v. Gujarat Revenue Tribunal and Ors.) to impress on the submission that when the main provision is unambiguous, proviso cannot be read into the main provision to understand the same.
10. Mr.T.V.Ramanujun, learned senior counsel appearing for the appellant in W.A. No. 2080 of 2003, filed against the judgment of Justice P.K.Misra, referred to the recovery proceedings originally made and contended that a civil suit was filed in O.S. Nos. 85 of 2001 and 270 of 2001 against the Tahsildar and Commissioner seeking injunction to restrain the Panchayat from collecting the property tax. The said suits were filed contending that as educational institutions, they are entitled to be exempted vide Section 49(1)(c) of the Manual of Panchayat Administration Volume I and Section 83 of the Tamil Nadu District Municipalities Act (Amended Act 42 of 1994). The appellant also quoted instances where the Government had exempted institutions from payment of property tax. The appellant pointed out to the representation made as early as 17.3.1997 that on the direction from the Government, they had also made a request before the Panchayat. It is stated that both the suits are dismissed for default. The appellant was served with a notice dated 9.12.2002 and was called upon to remit a sum of Rs. 72,16,920/- being the house tax for the period 1985-2003. The appellant challenged the same contending that the levy of tax on buildings used for educational purposes and libraries open to public is contrary to the Rules which does not impose any qualification on the usage.
11. Mr. T.V.Ramanujun, learned senior counsel, pointed out that the educational institutions run by the petitioner were exempt from property tax even under the old Act. He submitted that no rent was payable by the students in the hostel. He pointed out that the language of the Section does not give any room for an interpretation that exemption was available only to charitable institutions. He also pointed out that the learned single Judge erred in reading the latter part of the Section relating to charitable institutions run for destitutes and animals into the provision relating to educational institutions. He submitted that for the purposes of Rule 15, charitable nature of the institution is not the touchstone to decide on the issue. Supporting the stand of the other writ petitioners, he further submitted that the students are licensees and as such, no tenancy could be attributed to the stay in the hostel. He pointed out that the stay in the hostel is an incidence of education; therefore, part of the service.
12. Mr.G.Masilamani, learned senior counsel appearing for the petitioner in W.P. Nos. 12681 of 2003, 22509 and 22510 of 2006, submitted that under Rule 15(c), once the property is used for educational purposes, there could be no levy of property tax under the provisions of the Act. Referring to the concept of rent, learned Counsel submitted that it denotes a payment in respect of amenities and services provided by the landlord under the terms of tenancy. In an educational institution, there is hardly any room even for suggesting the relationship of a landlord and tenant. Educational institutions not being commercial in their character and status, the denial of the exemption by making a distinction between those aided and unaided, or between institutions run by charitable institutions and Ors. is not warranted by the language of the Rule. He further submitted that the charitable character of the institution is not a rider for buildings housing educational institutions to earn an exemption. Hence, for the purpose of considering the exemption under Rule 15, charitable or commercial nature does not enter into the consideration at all. He submitted that when the language of the provision is couched in clear, unambiguous terms and the object to exempt buildings used for educational purpose is easily discernible from the language of the Section, the same cannot be strained to read anything more than what is written there. Mr.G.Masilamani, learned senior counsel, pointed out to Rule 15(c) and 15(e) that whenever the legislature intended charitable character as a deciding factor for grant of exemption, it expressly said so. The phrase 'open to public' has its relevance to libraries and charity cannot be read into the first part of the provision to deny the exemption. Answering the submission of the learned Advocate General that the amount charged and included as part of the fee amounted to rent as far-fetched, he submitted that the term 'rent' cannot be given a liberal meaning. He pointed out to Section 2(a) relating to definition of 'Capitation Fee' under the Tamil Nadu Educational and Prohibition of Capitation Fee Act and pointed out that the concept of rent has no place in the fee charged. Elaborating on the term 'public', he submitted that the same has to be read as applicable to cases where there is no restriction to the entry. It meant in fact an extensiveness of the entry available, meaning thereby 'open to all' in contradistinction to a restricted entry as in the case of private charity. He further pointed out that, for understanding the width of the provision, the provisos cannot be telescoped into the main provision. He also referred to the meaning of 'public' as given under the Law lexicon to emphasize the fact that the exemption granted to the buildings having educational institutions where the entry is not restricted to a particular section alone would answer the description of public to have the benefit of exemption. Learned Counsel referred to the decision reported in : (1995)2SCC689 (Babua Ram v. State of U.P.) to state that when the language of the statute is clear and unambiguous, it must be given effect to, even though it may be absurd.
13. Mr.V.Raghavachari, learned Counsel appearing for the petitioner in W.P.(MD) No. 9071 of 2005, apart from reiterating the contentions of other Counsel, referred to the decision reported in : AIR1999Ker343 (Principal, St.Thomas College v. State of Kerala and Anr.) and the order dated 26.10.2006 in O.P. No. 9694 of 2003 and submitted that the exempted provision cannot be given a restricted meaning keeping the proviso in the forefront.
14. Mr.R.Viduthalai, learned Advocate General, appearing for the State in all these writ petitions, drawing his inspiration from the judgment of P.K.Misra,J., referred to the decision reported in : (1990)2MLJ381 (Nepco Schlenk Engineering College v. The President, Keriseri Panchayat and Ors.) to point out the difference in the language of the provision as they stand now and as it stood prior to the amendment that, under the original provision, even if the institution charged rent from the occupants for the occupation of the hostels, the buildings were exempt from property tax, which is not so under the present provision. Learned Advocate General referred to the decisions reported in : AIR2003SC3724 (Islamic Academy of Education v. State of Karnataka), and (2005) 6 SCC 537 (P.A. Inamdar v. State of Maharashtra), the decisions of the Apex Court on the issue of institutions running educational institution only to contend that institutions charging fee cannot have the benefit of exemption. He referred to the decisions in : [2003]3SCR987 (Indian Red Cross Society v. New Delhi Municipal Committee), : [1957]1SCR20 (Karnani Properties Ltd. v. Augustine), : [1990]2SCR564 (Puspa Sen Gupta v. Susma Ghose) 2007 (3) CTC 273 (Southern Petrochemicals Industries Co. Ltd. v. Electricity Inspector, E.T.I.O. and Ors.), : AIR2007SC797 (A.P. Steel Re-Rolling Mill Ltd. v. State of Kerala) and : 2005(99)ECC689 (Tata Iron & Steel Co. Ltd. v. State of Jharkhand to impress on the legal proposition that exemption provision must be strictly construed and unless and until the petitioners show that they fall within the purview of the provision, exemption could not be granted. He emphasized that if rent is charged in the institutions which are not open to public, even though used for educational purpose, the buildings will not have the benefit of exemption. He submitted that the avowed object of the granting of exemption to educational institutions must be kept in mind. by exempting, institutions which are charitable in character, are not made to suffer financially by taxation and hence institutions charging fee are not eligible to gain an unintended benefit. Learned Advocate General submitted that the power to levy tax is referable to Section 171 of the Tamil Nadu Panchayats Act, 1994. Section 176 and Rule 15(c) touch on exemption from payment of tax on buildings used for purposes as stated in the provisions. He submitted that Rule 15(c) granted exemption to three classes (i) buildings used for education and hostel (ii) buildings used for library for public and (iii) public buildings for charitable purposes. As per the first proviso, if rent is charged on the buildings used for educational purposes, then the exemption for the building stands inapplicable. Hence, if rent is charged for the hostels, irrespective of it being shown separately as rented out and included in the fee as an integral part of it, then the exemption provision fails in these cases. Therefore, the exemption under Rule 15(c) is not an absolute one, but a qualified one. In short, the payment on the facility provided activates the deeming fiction for the purpose of the proviso. In the circumstances, supporting the order of P.K.Misra,J, he prayed for dismissal of the writ appeal and the writ petitions.
15. Mr. Gomathinayagam, appearing for respondents-1 and 2 in W.P. No. 35138 of 2003, referred to the decisions reported in : [1979]2SCR357 (TELCO v. STO) at paragraph 10 AIR 1968 SC 1638 at paragraph 23, (Tilkayal Shri Govindlalji Maharaja v. State of Rajasthan) and : [1988]1SCR948 (State of U.P. v. Malik Zarid Khalid) to explain what could be the interpretation of the word 'public' in the context of the exemption provision. He submitted that the intention in granting exemption to buildings running educational institutions is clear enough to show that institutions offering free education are not over-burdened by taxation and hence, those alone would qualify for exemption. He submitted that even though the word 'charitable purpose' is not used, yet, read with the proviso, the intention of Section 15(3) is clear that exemption is available only to those organisations run without commercial character. He referred to : [1975]101ITR234(SC) (The Sole Trustee Loka Shikshana Trust v. The Commissioner of Income Tax, Mysore) and : [1964]1SCR561 (Shri Govindlalji v. State of Rajasthan) and submitted that the word 'public' has to be understood as institutions open for all not restricted by any aspect by reason of it being run as a commercial institution. In the circumstances, the counsel for respondents pleaded that the order of the learned single Judge, Justice P.K.Misra, gives the correct approach to the exemption provision, and hence called for no interference.
16. Heard counsel for the parties.
17. Before going into the various contentions, we need to advert to few principles on the construction of statutes, particularly with reference to the taxing enactment and on the scope of the exemption provision.
18. The cardinal rule of construction of any statute is that the statute must be understood according to its plain language. Unless there are adequate grounds to justify the inference of what the legislature clearly so intended, nothing be added or subtracted therefrom. Dealing with the interpretation of the provisions of the statute in the decision reported in : 2004CriLJ3362 (Prakash Nath Khanna v. CIT), the Apex Court held, the choice between a strict construction and a liberal construction arises only in case of doubt as regards the intention of the legislature manifest on the statutory language. The need to resort to any interpretative process arises only where the meaning is not manifest on the plain words of the statute. If the words are clear to convey the meaning, there is no need for any interpretation.
19. Touching on the various aspects on the construction of statutes, in the decision reported in : 2004CriLJ3362 (Prakash Nath Khanna v. CIT), the Apex Court held:
It is a well settled principle in law that the court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the Legislature. The language employed in a statute is the determinative factor of legislative intent. The first and primary rule of construction is that the intention of the legislation must be found in the words used by the Legislature itself. The question is not what may be supposed and has been intended but what has been said. 'Statutes should be construed, not as theorems of Euclid'. Judge Learned Hand said, 'but words must be construed with some imagination of the purposes which lie behind them'. (see Lenigh Valley Coal Co. v. Yensavage 218 FR 547. The view was reiterated in Union of India v. Filip Tiago De Gama of Vedem Vasco De Gama AIR 1990 SC 981 and Padma Sundara Rao v. State of Tamil Nadu : [2002]255ITR147(SC) ).
In D.R. Venkatachalam v. Deputy Transport Commissioner : [1977]2SCR392 it was observed that courts must avoid the danger of a priori determination of the meaning of a provision based on their own preconceived notions of ideological structure or scheme into which the provision to be interpreted is somewhat fitted. They are not entitled to usurp legislative function under the disguise of interpretation.
20. There are sound principles which underlie the interpretative process on the exemption provision vide the decision reported in : [1957]32ITR466(SC) (Commissioner of Income-Tax v. Raja Benoy Kumar Sahas Roy (SC)) at 475 : [1989]177ITR431(SC) (Commissioner of Income-Tax v. Strawboard Mfg. Co. Ltd. : [1988]170ITR137(SC) (Central Board of Direct Taxes v. Aditya V. Birla (SC)). These decisions give us the guiding principle on the understanding of an exemption provision to declare that exemption from tax is an exception to the general chargeability to tax under the provisions of the taxing enactment. Hence, those who claim an exception from liability must bring themselves within the terms of the exemption provision. Secondly, tax being the source by which the State gets its revenue, any claim of exemption from payment of tax must be clearly defined and founded on plain language. Where one is concerned with the interpretation of an exemption claim in a taxing statute, once the assessee proves that his case falls within the ambit of the proviso for exemption, then, that claim must, as far as possible, be liberally construed provided no violence is done to the language used.
21. In the decision reported in : 1991ECR235(SC) (Union of India v. Wood Papers Ltd.), the Apex Court held that liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it. The Supreme Court held:
4. ...Literally exemption is freedom from liability, tax or duty. Fiscally it may assume varying shapes, specially, in a growing economy. for instance tax holiday to new units, concessional rate of tax to goods or persons for limited period or with the specific objective etc. That is why its construction, unlike charging provision, has to be tested on different touchstone. In fact an exemption provision is like an exception and on normal principle of construction or interpretation of statutes it is construed strictly either because of legislative intention or on economic justification of inequitable burden or progressive approach of fiscal provisions intended to augment State revenue. But once exception or exemption becomes applicable no rule or principle requires it to be construed strictly. Truly speaking liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction. Therefore, the first exercise that has to be undertaken is if the production of packing and wrapping material in the factory as it existed prior to 1964 is covered in the notification.
5. From the Table extracted above it is clear that it is in two parts and exemption is allowable in the first part to the factory commencing production on or after March 31, 1964, and in the second part to the existing factory to extent of enlarged capacity. If the first part is read in isolation it is susceptible of construction as was adopted by the High Court.
22. The aforesaid principles are emphasized in a number of decisions of the Apex Court that if the wording of the Section is clear, then benefits which are not available cannot be denied or conferred as the case may be ignoring or misinterpreting the words in the Section, haunted by a supposed intention of the provision.
23. we have already seen Rule 15 on exemption on specified classes of houses for house tax. We are concerned with Clause (c) of Rule 15 and the proviso to Section 15. A reading of the Rule indicates the plain language as to the intention that the exemption on buildings used for educational purposes including hostels rests on the user aspect of the building simpliciter. There are no conditions annexed to the user or the dominant purpose to exempt from tax. So long as the provision is plain and makes the reference to usage as 'for educational purposes' as without any qualification to suggest that the exemption as conditioned as in other instances to say that it is available only to those charitable institutions or those which are imparting free education, we do not find any ground to go for any interpretative process to strain the language of the Rule to accept the submission of the respondents as suggested by the learned Advocate General or by the Counsel appearing for the respondents. The scope of the exemption contemplated has to be understood by the plain language of the Rule rather than by what is believed as its implied meaning or the supposed intention. The language in the Rule carries no uncertainty to search for an implied meaning. The generality of the purpose stated as 'for the purpose of education ' clearly supports the case of the petitioner that irrespective of the character of the institution as aided or unaided, free or restricted, recognised or otherwise, the purpose for which the building is used alone qualifies the claim for exemption. In understanding the provision it is totally unnecessary for us to get into the proviso As had been held in many a decision , normally a proviso is enacted to carve out something special out of the general or to qualify what is in the enactment. Comparing this provision with the one that existed in 1988, it is seen that under the old provision, originally, buildings used for educational purposes including hostels and libraries open to public were exempted from house tax. The old provision also contained 2nd proviso. It read that even if the educational institutions charged rent for the occupation of the buildings used for educational purpose and hostels from the occupants, the buildings are exempt from property tax. Reading these provisions, the respondents pointed out that the intention on grant of exemption remaining the same, institutions which charged fee are outside the scope of Rule 15. We do not agree with this submission. The scope of the provision has to be understood as they appear at the point of time relevant to the year under consideration and not by process of comparison with the old provision. Considering the marked difference in the language of the provision, in the face of the clear language, we do not find any support to the respondents getting into the old enactment to understand the scope of the present provisions.
24. Much arguments were placed before us on the question of the availability of exemption to educational institutions, particularly in the context of the phrase 'open to the public'. Mr.R.Muthukumaraswamy, learned senior counsel, submitted that the said phrase has no relevance to the educational institutions; in any event as held in the decision reported in : AIR2003SC3724 (Islamic Academy of Education v. State of Karnataka) with the prohibition on charging capitation fee, the phrase 'open to the public' has to be understood as institutions without any restriction as to admission. Per contra, the argument of the respondents is that an institution which has a restricted admission and not free for all is not an institution open to public.
25. Mr.Gomathinayagam, appearing for respondents-1 & 2 in W.P. No. 35138 of 2003, referred to the decisions reported in : [1979]2SCR357 (TELCO v. STO) AIR 1968 SC 1638 Paragraph 23 (Tilkayal Shri Govindlalji Maharaja v. State of Rajasthan) and : [1988]1SCR948 (State of U.P. v. Malik Zarid Khalid) for the purpose of understanding the scope of the phrase 'public'. It may be seen that all these decisions rest on the particular provisions of the Act concerned and the definition contained therein and we do not find any assistance to support the contention of the respondent that 'open to public' has to be read as referring to institutions not charging fee or a charitable institution. As the well-known dictum of Rowlatt,J. in cape brandy syndicate v. Inland Revenue Commission (1921) 1 KB 64 held 'in a taxing Act, one has to look merely at what is clearly said.... One can only look fairly at the language used. '
26. He referred to the decision reported in : [1975]101ITR234(SC) (Sole Trustee, Lok Shikshana Trust v. CIT) to draw our attention as to what 'education' meant. This relates to a case of exemption under the Income Tax Act, 1961. Dealing with the issue as to whether the Trust, engaged in the business of printing and publishing newspapers and journals, is entitled to exemption as not one carrying on any activity of profit to fall under the definition of 'charitable purpose' as given under Section 2(15), the Apex Court referred to the deed to hold that mere publication of news or views could not be said to serve a purely or even a predominately educational purpose in its ordinary sense and that the Trust's object did not satisfy the requirement of 'not involving the carrying on of any activity of profit'. We do not find anything in the decision to advance the case of the respondents.
27. Mr.R.Muthukumaraswamy, learned senior counsel, referred to the decision reported in AIR 1931 Mad 55 : 60 MLJ 456, (Municipal Council Trichinopoly v. S. venkatarama aiyar) wherein, the phrase 'public purpose' with reference to the exemption from assessment to property tax under the Madras District Municipalities Act came up for consideration. The question whether secondary schools open to public run by a proprietary concern which was entitled to appropriate all the profit to itself qualify for exemption under Section 63(1)(a) of the Old Municipal Act (IV of 1884) and 83(a) of the Municipal Act (V of 1920), came up for consideration. It was noted by this Court therein that the phrase 'public purpose' had not been defined in the Act and held:
It does not seem to me that the Legislature, when it intended to exempt from rateability buildings used for imparting education which is admitted to be a public purpose, intended to exclude only those institutions from which the headmaster derived no profits for himself. If that was the intention of the Legislature that would have been explicitly so stated. Under the present Act, Act V of 1920, as I shall presently show, when I deal with Section 83 of that Act, it is clear to my mind that the Legislature exempts from rateability all educational institutions irrespective of the question whether the proprietor makes out of those institutions any private profit for himself or not. In the same way, I think all buildings used for educational purposes were intended to be exempted from payment of the Municipal tax under Section 63 (1) (a) also.
28. The learned Judge pointed out to the language used in Section 83(a) as follows:
Places set apart for public worship and either actually so used or used for no other purpose, choultries, buildings used for educational purposes and libraries and playgrounds which are open to the public and from which no income is derived.
29. Learned Judge held that all exemptions were grouped together in a separate Section negativing the construction put on the clause that educational institutions 'which are open to public' and for which the income is derived to mean earning income would not qualify for exemption. Learned Judge held:
In my opinion the words in Sub-section (a) 'which are open to the public and from which no income is derived' are referable according to the natural construction of the words only to 'libraries and playgrounds' and not to buildings used for educational purposes.
30. We find that the reliance placed on by the petitioner on this decision is fully justified and answers the question in favour of the petitioners. As stated already, the Rule does not put any condition on the educational institutions to avail the benefit of exemption. Considering the unqualified terms in which the exemption provision is couched and in contradistinction to those clauses which qualifies the grant of exemption, all buildings run for educational purposes are entitled to have the benefit of exemption. As already stated, the decision of this Court reported in AIR 1931 Mad 55 : 60 MLJ 456, (Municipal Council Trichinopoly v. S. Venkatarama Aiyar) fully covers the issue in the matter of understanding of the scope of the provision.
31. Mr.V.Raghavachari referred to the decision reported in : AIR1999Ker343 (Principal, St.Thomas College v. State of Kerala and Anr.). This relates to the Kerala Building Tax Act, 1975 where, under Section 3(1)(b), buildings used principally for educational purpose are entitled for exemption. The scheme is more or less similar to the present provisions. Pointing out to the fact that the Section granting exemption does not restrict recognised educational institution or regular colleges collecting fees or run with a profit motive, the Kerala High Court held that absence of recognition is not a ground for rejecting exemption. Mr.V.Raghavachari also referred to the order in O.P. No. 9694 of 2003 dated 26.10.2006 reported in : 2006(4)KLT1008 (Sree Gokulam Educational And Medical Trust v. Tahsildar). This related to a case of Students Hostel. Referring to the decisions reported in 1981 KLT 80 (S.R. Mariatta v. State of Kerala) 1984 KLT 310 (M. Mathew v. Executive Officer) and 1995 (2) KLT 588 (Chackravarthy Hostel v. Municipal Commissioner), the Kerala High Court held that the hostels where the students stay and study is essentially used for educational purposes entitled to exemption under Section 3(1)(b) of the Act. The decision of the Karnataka High Court go on similar lines as that of the Madras High Court referred to above.
32. for the purpose of understanding the term 'public' references were also made to the dictionary meaning, from Ramanatha Iyer - The Advanced Law Lexicon. The reading of the Rule does not contain according to us, any such requirement as 'open to public' as in the case of library. After the word 'hostels' in Rule 15(c), there is a conjunction to refer to libraries which are open to public, as an independent item of exemption. We hold that the requirement as open to public relates only to a library and not with reference to an educational institution. Hence 'open to public' is not a qualification or an eligibility to confer a benefit of exemption on the educational institutions.
33. In any view of the matter, even assuming for a moment 'open to public' is attached to an educational institution, yet, in the absence of any definition of 'public' under the Act, going by the definition of the term under Section 3(26) of the Tamil Nadu General Clauses Act, 1891, which reads as under:
Public includes any class of the public or any community ', we hold that the educational institutions, even if they are open to a section of the public, would nevertheless be treated as institutions eligible for exemption. It may be noted that in the decision reported in AIR (37) 1950 TC 103 (Alleppey Municipality v. Bombay Co.), dealing with Travancore District Municipalities Act XXIII of 1116, the Kerala High Court interpreted the word 'public' in Section 326(13) of the Act in the sense in which it was defined in Section 2(28) of the Travancore General Clauses Act and held that this would include a section of the public. Dealing with the question as to whether a canteen run by a company for the benefit of the workmen employed, not open to public would be required to take a licence from the Municipality, applying the provisions of the Travancore General Clauses Act, the Court held, the word 'public' meant as open to a section of the public and that the provisions of the Travancore General Clauses Act applied to the Travancore District Municipalities Act. In that context, the company was required to get the licence from the municipal authorities.
34. It is no doubt true that in the decision reported in : [1979]2SCR357 (TELCO v. STO), while considering the liability under the Bombay Motor Vehicles (Taxation of Passengers) Act (67 of 1958), the Apex Court held that where a nominal charge is realised from the employees of a company as regards the transport facilities, that would not make the transport a public service vehicle carrying passengers so as to attract the provisions of Section 3. The Apex Court held that the word 'public' has got well-known connotation and means a carriage to which any member of the public can have free access on payment of the usual charges. The employees for whom the bus service was run form a separate class and could not be said to be 'public' as contemplated under Section 2(i) of the Bombay Motor Vehicles (Taxation of Passengers) Act. The difference in the approach between the two aforesaid decisions need to be noted. While in the latter case, the decision rested on the definition of 'private service vehicle' under the Bombay Motor Vehicles Rules, 1959, and having regard to the preamble of the Act, the Apex Court held that the tax could be levied only in the case of a public service vehicle in contradistinction to a private service vehicle., the decision relied on under the Travancore General Clauses Act rested on the meaning of the word 'public' as drawn from the General Clauses Act, when there was no meaning assigned to the said term under the Travancore District Municipalities Act. As already seen, even in the Tamil Nadu enactment with which we are concerned and going by the definition of 'public' under the Tamil Nadu General Clauses Act, we express our inability to go by the submission made by the respondents placing reliance on the decision of the Apex Court in the decision reported in : [1979]2SCR357 (TELCO v. STO). As already noted, the decision cited by the respondents rested on the definitions contained in those enactments. In the circumstances, we hold that for the purpose of understanding the exemption as regards educational institutions, the term 'public' is not attached to the educational institutions as a qualification for claiming exemption. In any event, 'open to public' cannot be construed as referring to an institution imparting free education to all without restriction. for the reasons already stated above in the preceding paragraphs, the word 'public' cannot be construed as has been contended by the respondents. The inclusion of the said phrase to the understanding of the clause, in any event, does not advance the cause of the respondents. The availability or otherwise of an exemption rests purely on the usage of the building as for educational purpose and hostels attached thereto and not restricted to charitable institutions only.
35. In the light of the discussions referred to above, following the decision of this Court reported in AIR 1931 Mad 55 (Municipal Council Trichinopoly v. S. Venkatarama Aiyar), we have no hesitation in accepting the plea of the petitioners herein. As far as the decision of P.K.Misra,J. is concerned, it is seen that the reasoning of the learned Judge proceeds on the footing that educational institutions which are charitable alone would qualify for exemption. We do not find any ground to read such a requirement as a condition to qualify the granting of an exemption. As already seen, when the language of the Rule is simple and does not contain any doubtful phrase for understanding, it is not possible for us to introduce a requirement even as an exercise of interpretative process. for the purpose of understanding, the main part of the Rule relating to educational institutions, it is not necessary for us to look at the provisos which merely carves out an exception in the main part. Consequently, reading the Rule as it is, we hold buildings used for educational purposes and the hostels thereto are entitled to the claim for exemption.
36. As far as the decision of Jyothimani,J. in the decision reported in (2006) 3 MLJ 1068 (Kamaraj College of Engineering And Technology, Managing Board, rep. by its Secretary, Virudhunagar v. President, K. Vellakulam Panchayat, Madurai District), is concerned, while we agree with the conclusion of the learned Judge in paragraph 15 of the judgment, we however, do not share the view of the learned Judge that the benefit of exemption goes for affiliated institutions only. Recognition or affiliation of an institution has nothing to do with tax exemption under Rule 15(c). The claim for exemption to educational institutions is not to be decided by inference or support drawn from requirements of the statutes which are regulatory in character. Unless the exemption provision contemplates such a condition or makes a reference to those enactments, we do not find any reason to read such restrictions into the Rule.
37. Mr. G.Masilamani, learned senior counsel, referred to the concept of rent as not applicable to the students paying the fee. However, Mr.R.Viduthalai, learned Advocate General however, submitted that the rent aspect is an in-built one in the fee structure. Hence, the institutions which collect fee are to be treated as collecting rent for the stay in the hostel. It is not denied by the respondents that the facilities of the hostel given to the students are an incidence of the schooling in the particular educational institutions. As Mr.G.Masilamani rightly submitted, in the students availing of the facility therein for continuing their education in the institutions, there does not arise a relationship of landlord and tenant to bring the case under the proviso. The overall fee charged for the facilities offered as part of undergoing the schooling therein does not make a student a tenant as in the normal meaning of the term. In the circumstances, it is not possible for us to accept the plea of the respondents that the charges for the stay in the hostel availing a facility therein must be treated as rent. The submission made to bring the case under the first proviso which carves out an exception to the main Rule only needs to be noted for rejection, in the light of the provisions contained in the main part of the Rules. Consequently, we reject the case of the respondents.
In the above circumstances we allow the writ appeals and the writ petitions holding that on a plain reading of Rule 15(c), the dominant object or the use of the building for educational purposes alone decides the claim for exemption and nothing more or less is required. Rule 15(c) is in an unqualified term. There are no words of restriction attached to the portion dealing with educational purposes. In the above circumstances, we do not agree with the view expressed by Justice P.K.Misra and affirm the view of Justice P.Jyothimani in the decision reported in (2006) 3 MLJ 1068 (Kamaraj College of Engineering And Technology, Managing Board, rep. by its Secretary, Virudhunagar v. President, K.Vellakulam Panchayat, Madurai District), as stated in the preceding paragraph. Hence, we set aside the orders impugned herein dated 30.4.2003 thereby allow the writ appeal and the writ petitions. Connected Miscellaneous Petitions are also dismissed. No costs.