Madras High Court
Rev.Fr.Antony Leo Tagore vs / on 3 December, 2018
Author: C.Saravanan
Bench: C.Saravanan
1
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 03.12.2018
CORAM :
THE HONOURABLE MR.JUSTICE C.SARAVANAN
W.P.(MD)No.5837 of 2014
and
M.P.(MD)No.1 of 2014
Rev.Fr.Antony Leo Tagore,
Correspondent,
De britto Higher Secondary School,
Tirupattur Main Road,
Ramnagar, Devakottai,
Sivagangai District. ... Petitioner
/Vs./
1.The Commissioner,
Devakottai Municipality,
Door No.371 / 156, Tirupattur Road,
Devakottai – 630 302,
Sivagangai District.
2.The Regional Deputy Director of Municipal Administration,
Door No.294, Melakkal Main Road,
Kochadai, Madurai – 625 016. ... Respondents
Prayer: Writ Petition - filed under Article 226 of the Constitution of
India, to issue a Writ of Certiorarified Mandamus, to call for the
records on the files of the 1st respondent pertaining to its order
bearing No.Nil dated 28.03.2014 and quash the same and
consequently direct the 1st respondent to convert the property tax
assessment from commercial tariff to the examination cum prayer
Hall situated at door no.8 and 8-A as public building (School
Category) from the year 2013-2014 onwards by considering the
representation of the petitioner dated 28.03.2013 and the
subsequent reminders dated 1.10.2013 and 18.03.2014.
http://www.judis.nic.in
2
For Petitioner : Mr.S.C.Herold Singh
For R-1 : Mr.Mohammed Imran
For R-2 : Mr.A.Thiyagarajan
Additional Government Pleader
ORDER
The petitioner has challenged the order of the respondent demanding tax for the assessment year 2014. The petitioner submits that the petitioner is an aided School and the petitioner is exempted from payment of tax under Section 83 (c) of the TamilNadu District Municipalities Act, 1920.
2. The learned counsel appearing for the petitioner submits that all through the period, the petitioner was exempted and further submits that even as per the latest amendment to the above said Act, which came into force from January 2018, the petitioner Institution would be exempted from payment of tax.
3. Section 83 Sub-clause (c) of the TamilNadu District Municipalities Act, 1920, has been amended by specifically including the Educational Institution aided by the Government to read as under:-
http://www.judis.nic.in 3 “ (c) buildings used for educational purpose including hostels and libraries, run by the Government and buildings used for charitable purpose 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 institutions run purely on philanthropic lines as are approved by the council;” Provided that the buildings used for educational purpose by the Government aided institutions for conducting self- financing courses shall be subject to levy of property tax;” (2) in the proviso, for the expression “clauses (a), (c) and (e)”, the expression “clauses (a) and (e)” shall be substituted.” The Statement of objects and reasons for the above amendment reads as under:-
“As per rule 15(c) of the Tamil Nadu Village Panchayats (Assessments and Collection of Taxes) Rules, 1999, only the buildings used for educational purposes including hostels and libraries run by the Government or local bodies and institutions aided by the Government are exempted from payment of house tax, whereas, under http://www.judis.nic.in 4 the municipal laws governing the Municipal Corporations, Municipalities and Town Panchayats, all buildings used for educational purposes are exempted from payment of property tax. The Third State Finance Commission has among others, recommended that the provisions exempting all educational institutions from payment of property tax shall be removed. Based on the above recommendations, the Government have decided to do away with the exemption given from payment of property tax for all the buildings used for educational purpose except those which are run by the Government or Corporation or any other Local Authority or Institutions aided by the Government and also to have uniformity in the assessment of property tax.
2. Accordingly, the Government have decided to amend the provisions relating to the payment of property tax in the Chennai City Municipal Corporation Act, 1919 (Tamil Nadu Act IV of 1919), the Madurai City Municipal Corporation Act, 1971 (Tamil Nadu Act 15 of 1971), the Coimbatore City Municipal Corporation Act, 1981 (Tamil Nadu Act 25 of 1981) and the Tamil Nadu District Municipalities Act, 1920 (Tamil Nadu Act V of 1920) suitably on the lines of http://www.judis.nic.in 5 the provisions contained in rule 15(c) of the Tamil Nadu Village Panchayats (Assessments and Collection of Taxes) Rules, 1999.”
4. Controverting the submission, the learned counsel appearing for the respondent would submit that the issue is no longer res integra as a similar issue arising under the Provisions of Tamil Nadu Panchayat Act, 1994 and the Rules made therein have clarified that the exemption from tax is not automatic, but has to be specifically allowed.
5. In this connection, the learned counsel appearing for the respondents drew my attention to the decision of the Full Bench of Principal Bench of this Court in case of the The President, K.Vellakulam Panchayat, Kalliludi Chatram, Madurai District vs. Kamaraj College of Engineering and Technology Managing Board, represented by its Secretary, S.P.G.C.Srimurugan reported in 2009 5 CTC 289, wherein Paragraph No.17, it has been 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 Section 171 (1), 172 and 176. Section 171 (1) mandates the Village Panchayat to levy house tax on all the houses http://www.judis.nic.in 6 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 u/s 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 u/r 15 it is not mandatory to grant exemption from house tax, but is 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 “may” to give effect to the said rule of exemption.”
6. The learned counsel appearing for the respondents further drew my attention to the decision of the Division Bench of the Principal Bench of this Court in W.A.No.14 of 2013 dated 27.06.2017 in the case of The Commissioner, Thiruthuraipoondi Municipality, Thiruthuraipoondi, Tiruvarur District, vs. St.Antony's Matriculation School and another dealing an identical situation arising out of the Tamil Nadu District Municipalities Act, 1920, the Hon'ble Division Bench of the Principal Bench of this Court followed the decision of the Full Bench of the http://www.judis.nic.in 7 Principal Bench of this Court in the case of Kamaraj College of Engineering and Technology Managing Board [referred supra].
7. The Hon'ble Full Bench of this Court was dealing with the Rule 15 of the Tamil Nadu Village Panchayats (Assessment and Collection of Taxes) Rules, 1999. The Rule 15 of the Tamil Nadu Village Panchayats (Assessment and Collection of Taxes) Rules, 1999 reads as under:
“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-
......
(c) buildings used for educational purposes including hotels and libraries which are open to the public and public buildings used for charitable purpose of sheltering the destitutes or animals;”
8. The above said rule has been framed under Sections 171, 172 and 176 of the Tamil Nadu Panchayats Act, 1994. Section 176 of the Tamil Nadu Panchayats Act, 1994 reads as under:
“176. Exemption.- No exemption from the payment of any surcharge or tax specified in Section 168 or 171 shall be granted by the Village Panchayat http://www.judis.nic.in or the Panchayat Union Council except in 8 accordance with such rules as may be prescribed:
Provided that in any particular case, such exemption may be granted with the previous sanction of the Government.”
9. The power to grant exemption is discretionary under the provisions of the Tamil Nadu Panchayats Act, 1994. Therefore, in that context, the Hon'ble Full Bench of Principal Bench of this Court has concluded as above in Paragraph No.17 in the case of Kamaraj College of Engineering and Technology Managing Board [referred supra] holding that unless specific order granting exemptions are given, it cannot be extended to an educational institution.
10. The learned counsel appearing for the petitioner has relied upon the decision of the Principal Bench of this Court reported in 2018 (3) TLNJ 301 (Civil) in the case of Kovai Medical Centre Research & Educational Trust, Represented by its Authorised Signatory, Avinashi Road, Coimbatore District-641014 vs. The Executive Officer, Kalapatti Town Panchayat, Kalapatti, Coimbatore District, wherein, while dealing with an identical issue under the provisions of the Tamil Nadu District Municipalities Act, 1920, the Court held that Section 81 of the Tamil Nadu District Municipalities Act, 1920 deals with description and classes of http://www.judis.nic.in 9 property tax. As per Section 83 (1) (c) of the Tamil Nadu District Municipalities Act, 1920, the buildings used for Educational purpose are exempted. The writ petition was allowed. There, demand was made on office premises of the School. The Court allowed the writ petition following the decision of this Court in Mr.A.Subramanian, Managing Trustee of Merit Educational Charitable Trust-cum-
Principal of Merit Matriculation School, Ambasamudram, Tirunelveli District, Vs. The Executive Officer, III Grade Municipality, Ambasamudram, Tirunelveli District, reported in 2010 (4) CTC 31. The decision of the Principal Bench of this Court in W.A.No.14 of 2013 dated 27.06.2017 in the case of The Commissioner, Thiruthuraipoondi Municipality, Thiruthuraipoondi, Tiruvarur District, vs. St.Antony's Matriculation School and another [referred supra] was not referred.
11. I have gone through the provisions of the Act and Rules and the decisions cited by the learned counsel on either side.
12. Section 83 (c) of the Tamil Nadu District Municipalities Act, 1920 reads as under:
“83.General exemptions-- The following buildings and lands shall be exempt from the http://www.judis.nic.in 10 property tax.
.....
(c) buildings used for educational purpose including hostels and libraries, run by the Government and buildings used for charitable purpose 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 institutions run purely on philanthropic lines as are approved by the council;” Provided that the buildings used for educational purpose by the Government aided institutions for conducting self-financing courses shall be subject to levy of property tax;”
13. Rule 15 of the Tamil Nadu Village Panchayats (Assessment and Collection of Taxes) Rules, 1999, is pari materia with Section 83(1)(C) of the Tamil Nadu District Municipalities Act, 1920, but nevertheless is subject to Section 176 of the Tamil Nadu Panchayat Act, 1994. Therefore, unless specific order of exemption is granted, exemption cannot be claimed as a matter of right, merely because the rules provided for exemption as per proviso to Section 176. It has been interpreted to mean that exemption may be granted with the previous sanction of the Government.
http://www.judis.nic.in 11
14. However, as per Section 81 of the Tamil Nadu District Municipalities Act, 1920, the power to levy tax is vested with the Municipalities in the Municipalities limit. Section 83 of the TamilNadu District Municipalities Act, 1920, provides for general exemption. Section 83(c) of the TamilNadu District Municipalities Act, 1920, specifically exempts an Educational Institutions are approved by the Municipal Council, unless proviso to Section 83(1)(c) of the Tamil Nadu District Municipalities Act, 1920 excluding buildings used for educational purpose by the Government aided institutions for conducting self-financing courses from the proviso of exemption is attracted. In this case, there is no determination as to the basis of demand in the impugned order. The decision in Kamaraj College of Engineering and Technology Managing Board [referred supra] was distinguished by two decisions of the Court in 2018 (3) TLNJ 301 and 2010 (4) CTC 31. In Kanyakumari Medical Mission, C.S.I.Hospital, Neyyoor vs. The Municipal Commissioner, Kuzhithurai Municipality, Kuzhithurai, Kanyakumari District and another, the Court referred to a circular in Roc.No.23698/93/R1, dated 15.7.1994, issued by the office of the Director of Municipal Administration, Chennai, reads as follows:
“The Amendment Act No.42 of 1994 amending Section 83 of the T.N.D.M.Act providing http://www.judis.nic.in 12 for exemption from property tax for “buildings used for charitable purpose” has been published in the T.N.Govt. Gazettee Extraordinary on 30.06.1994. The amendment has been given effect from 18.10.1990. A copy of the Amendment Act is also enclosed for necessary action.” and dropped the demand. Therefore, the petitioner will be entitled to the relief subject to a proper determination by the respondents as to whether the building concerned was used for “educational purpose simpliciter” or for conducting self financing courses.
15. The respondents shall pass a speaking order within a period of four weeks from the date of receipt of a copy of this order. The respondents shall not initiate any recovery proceedings pending orders by the respondents and shall maintain status quo till then.
16. This writ petition is thus allowed by way of remand and disposed with the above observations. No costs. Consequently, connected Miscellaneous Petition is closed.
03.12.2018
Internet : Yes/No
Index : Yes/No
sm
To
The Regional Deputy Director of Municipal Administration, http://www.judis.nic.inDoor No.294, Melakkal Main Road, Kochadai, Madurai – 625 016. 13
C.SARAVANAN, J.
Sm Order made in W.P.(MD)No.5837 of 2014 03.12.2018 http://www.judis.nic.in