Madhya Pradesh High Court
Manodeep Higher Education Society vs Municipal Corporation on 20 March, 2018
THE HIGH COURT OF MADHYA PRADESH
1
WP.1587.16
(Daya Devi Education Committee Vs. Municipal Corpn. Gwalior & Anr.)
WP.2023.16
(Venus Public School & Anr. Vs. Municipal Corpn. Gwalior & Anr.)
WP.2049.16
(Venus Public Education Society & Anr. Vs. Municipal Corpn. Gwalior & Anr.)
WP.2050.16
(Venus Public School & Ors. Vs. Municipal Corpn. Gwalior & Anr.)
WP.2397.16
(Omprakash Kukreja Vs. Municipal Corpn. Gwalior & Anr.)
WP.7728.16
(Madhav Institute of Technology Science Vs. State of M.P. and others)
WP.1575.17
(Bal Keshanand Ji Shiksha Prasar Samiti Vs. Municipal Corpn. Gwalior & Anr.)
WP.2115.17
(Shri Ramnath Singh Shiksha Prasar Samiti Vs. State of M.P. and another)
WP.2906.17
(Manodeep Higher Education Society Vs. Municipal Corpn, Gwalior & Anr.)
Gwalior, Dated : 20.03.2018
Shri D.K. Agrawal, Shri Vikas Saxena, Shri
Naval Kumar Gupta and Shri Amit Bansal,
learned counsel for the petitioners.
Shri Raghvendra Dixit, learned Government
Advocate, for the respondent/State.
Shri Ankur Maheshwari, learned counsel for the respondent/Municipal Corporation, Gwalior.
Common issue arises for consideration in this batch of writ petitions as to whether being an educational institution the petitioners would be liable to pay Property Tax, Urban Development Cess and the Educational Cess imposed by the respondent-Municipal Corporation Gwalior, under Section 132 and 135 of the M.P. Municipal Corporation Act, 1956 (for brevity "1956 Act"). The petitions are analogously heard and decided by this common order.
Issue as regard to imposition of Property THE HIGH COURT OF MADHYA PRADESH 2 WP.1587.16 (Daya Devi Education Committee Vs. Municipal Corpn. Gwalior & Anr.) WP.2023.16 (Venus Public School & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2049.16 (Venus Public Education Society & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2050.16 (Venus Public School & Ors. Vs. Municipal Corpn. Gwalior & Anr.) WP.2397.16 (Omprakash Kukreja Vs. Municipal Corpn. Gwalior & Anr.) WP.7728.16 (Madhav Institute of Technology Science Vs. State of M.P. and others) WP.1575.17 (Bal Keshanand Ji Shiksha Prasar Samiti Vs. Municipal Corpn. Gwalior & Anr.) WP.2115.17 (Shri Ramnath Singh Shiksha Prasar Samiti Vs. State of M.P. and another) WP.2906.17 (Manodeep Higher Education Society Vs. Municipal Corpn, Gwalior & Anr.) Tax under Section 135 of 1956 Act, in respect of educational institutions being exempted under Section 136 of the 1956 Act from payment of property tax in respect of building and land is no more res integra and has been decided by the Division Bench in WP.No.3881/2010 (Shri Agrawal Educational & Welfare Society Vs. The Municipal Corporation, Bhopal and others) wherein it is held:-
"8. A bare reading of the above referred provisions clearly establishes that property tax is one of the taxes which the Corporation must impose but the imposition of this tax is subject to the provisions of sections 135 and
136. Clause (c) of section 136 also clearly states that exemption from levy of property tax applies to all the buildings and lands or portions thereof used exclusively for educational purposes. The only restriction is that buildings and lands should be owned by the educational institutions concerned or placed at the disposal of such educational institutions without THE HIGH COURT OF MADHYA PRADESH 3 WP.1587.16 (Daya Devi Education Committee Vs. Municipal Corpn. Gwalior & Anr.) WP.2023.16 (Venus Public School & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2049.16 (Venus Public Education Society & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2050.16 (Venus Public School & Ors. Vs. Municipal Corpn. Gwalior & Anr.) WP.2397.16 (Omprakash Kukreja Vs. Municipal Corpn. Gwalior & Anr.) WP.7728.16 (Madhav Institute of Technology Science Vs. State of M.P. and others) WP.1575.17 (Bal Keshanand Ji Shiksha Prasar Samiti Vs. Municipal Corpn. Gwalior & Anr.) WP.2115.17 (Shri Ramnath Singh Shiksha Prasar Samiti Vs. State of M.P. and another) WP.2906.17 (Manodeep Higher Education Society Vs. Municipal Corpn, Gwalior & Anr.) payment of any rent. There is no express provision in the clause that exemption will not apply to private and autonomous educational institutions which are imparting professional and vocational education and while doing so such educational institutions are making profit. It is also not possible to read such an implied provision in the exemption clause. The expression used "exclusively for educational purposes"
is wide enough to cover use for professional and vocational education by private and autonomous colleges. The expression "including schools"
does not limit the scope of
"educational purposes" in the
exemption clause. It is well settled that where word "include" is used, the intention of the legislature is to make the scope of expression extensive and not restrictive. For these reasons, I have no hesitation in holding that the petitioners' educational institutions are exempted from the imposition of property tax in respect of buildings and lands used by them exclusively for THE HIGH COURT OF MADHYA PRADESH 4 WP.1587.16 (Daya Devi Education Committee Vs. Municipal Corpn. Gwalior & Anr.) WP.2023.16 (Venus Public School & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2049.16 (Venus Public Education Society & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2050.16 (Venus Public School & Ors. Vs. Municipal Corpn. Gwalior & Anr.) WP.2397.16 (Omprakash Kukreja Vs. Municipal Corpn. Gwalior & Anr.) WP.7728.16 (Madhav Institute of Technology Science Vs. State of M.P. and others) WP.1575.17 (Bal Keshanand Ji Shiksha Prasar Samiti Vs. Municipal Corpn. Gwalior & Anr.) WP.2115.17 (Shri Ramnath Singh Shiksha Prasar Samiti Vs. State of M.P. and another) WP.2906.17 (Manodeep Higher Education Society Vs. Municipal Corpn, Gwalior & Anr.) educational purposes.
In view whereof, in respect of the institutions covered under Section 136 of 1956 Act and exempted from payment of property tax on building and land, it is beyond competence of the Municipal Corporation to levy such taxes. However, with a caveat that it will be within the competence of the Municipal Corporation to cause an enquiry to determine the ownership of the building property in possession of the educational institution and if it is found that such building and land are not used exclusively for educational purposes including schools, boarding houses, hostels and libraries and that the building/land is on a lease rent, the Municipal Corporation would be at liberty to charge property tax under Section 135 of 1956 Act.
As regard to the imposition of urban development cess, the issue is also no more res integra and has been decided by a Division Bench of this High Court in "Essarjee Education Society Vs. State of M.P. and THE HIGH COURT OF MADHYA PRADESH 5 WP.1587.16 (Daya Devi Education Committee Vs. Municipal Corpn. Gwalior & Anr.) WP.2023.16 (Venus Public School & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2049.16 (Venus Public Education Society & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2050.16 (Venus Public School & Ors. Vs. Municipal Corpn. Gwalior & Anr.) WP.2397.16 (Omprakash Kukreja Vs. Municipal Corpn. Gwalior & Anr.) WP.7728.16 (Madhav Institute of Technology Science Vs. State of M.P. and others) WP.1575.17 (Bal Keshanand Ji Shiksha Prasar Samiti Vs. Municipal Corpn. Gwalior & Anr.) WP.2115.17 (Shri Ramnath Singh Shiksha Prasar Samiti Vs. State of M.P. and another) WP.2906.17 (Manodeep Higher Education Society Vs. Municipal Corpn, Gwalior & Anr.) others 2016(4) MPLJ 118" wherein it is held:
"13. The Rules which are adverted to in this paragraph are M.P. Urban Development Cess (Collection) Rules, 2007, framed by the State Govt. in exercise of the power conferred by sub- section (1) of Section 13 read with sub- section (2) of Section 7 of the Madhya Pradesh Upkar Adhiniyam, 1981; whereunder i.e. under the Act of 1981, the urban development cess under Part II is levied under Section 6 which provides for -
6. Levy of cess on lands and buildings.- (1) there shall be charged, levied and paid for each year an urban development cess on all lands or buildings or both situated in municipal area or urban area at the rate of 2 per centum of the annual letting value or annual value :
Provided that where the lands or buildings or both are in occupation of the owner himself, the rate of cess shall be one half of the rate aforesaid :
Provided further that no cess shall be charged, levied and paid in respect of lands or buildings or both, for which property tax is not leviable THE HIGH COURT OF MADHYA PRADESH 6 WP.1587.16 (Daya Devi Education Committee Vs. Municipal Corpn. Gwalior & Anr.) WP.2023.16 (Venus Public School & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2049.16 (Venus Public Education Society & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2050.16 (Venus Public School & Ors. Vs. Municipal Corpn. Gwalior & Anr.) WP.2397.16 (Omprakash Kukreja Vs. Municipal Corpn. Gwalior & Anr.) WP.7728.16 (Madhav Institute of Technology Science Vs. State of M.P. and others) WP.1575.17 (Bal Keshanand Ji Shiksha Prasar Samiti Vs. Municipal Corpn. Gwalior & Anr.) WP.2115.17 (Shri Ramnath Singh Shiksha Prasar Samiti Vs. State of M.P. and another) WP.2906.17 (Manodeep Higher Education Society Vs. Municipal Corpn, Gwalior & Anr.) under the provisions of the law relating to local authority or the Sampatti Kar Adhiniyam, as the case may be.
(2) The cess charged and levied under sub- section (1) shall be in addition to tax charged and levied on lands or buildings or both in respect of annual letting value or annual value thereof under the law relating to local authority or the Sampatti Kar Adhiniyam, as the case may be, and shall be payable by the owner in the same manner as that tax.
(3) Subject to the provisions of this part, the provisions of the law relating to local authority or the Sampatti Kar Adhiniyam, as the case may be, and the rules made thereunder shall apply to the cess as if the cess were a tax levied under the said law or the Sampatti Kar Adhiniyam, as the case may be.
14. The second proviso to Section 6 has been substituted by M.P. Act No.11 of 2007 w.e.f. 21.5.2007.
15. Since the legislature has exempted the lands or buildings or both, for which property tax is not leviable from cess, in our considered opinion, the respondent- Corporation have no authority even THE HIGH COURT OF MADHYA PRADESH 7 WP.1587.16 (Daya Devi Education Committee Vs. Municipal Corpn. Gwalior & Anr.) WP.2023.16 (Venus Public School & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2049.16 (Venus Public Education Society & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2050.16 (Venus Public School & Ors. Vs. Municipal Corpn. Gwalior & Anr.) WP.2397.16 (Omprakash Kukreja Vs. Municipal Corpn. Gwalior & Anr.) WP.7728.16 (Madhav Institute of Technology Science Vs. State of M.P. and others) WP.1575.17 (Bal Keshanand Ji Shiksha Prasar Samiti Vs. Municipal Corpn. Gwalior & Anr.) WP.2115.17 (Shri Ramnath Singh Shiksha Prasar Samiti Vs. State of M.P. and another) WP.2906.17 (Manodeep Higher Education Society Vs. Municipal Corpn, Gwalior & Anr.) under Section 132(6)(o) to impose urban development cess. The imposition of urban development cess and its recovery, therefore, cannot be upheld. The decision in M.P. Cooperative Housing Society (supra) so far it upheld the Corporation's power to recover the urban development cess is of no help to the respondents because of insertion of second proviso in sub-section (1) of Section 6 of the M.P. Upkar Adhiniyam, 1981 w.e.f. 21.5.2007.
Thus, with effect from 21.05.2007, the educational institutions which are exempted from the property tax are also exempted from paying the urban development cess.
As regard to exemption from educational cess though the same was turned down in Essarjee Education Society (supra) by concurring with the decision in "M.P. Co- operative Housing Society and another Vs. State of M.P. and others 2002(4) MPHT 252". It is now informed that the State Government vide Notification No.231/18-3/2000, dated 25.01.2000 issued in exercise of powers conferred under Section 132(6)(o) of 1956 Act THE HIGH COURT OF MADHYA PRADESH 8 WP.1587.16 (Daya Devi Education Committee Vs. Municipal Corpn. Gwalior & Anr.) WP.2023.16 (Venus Public School & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2049.16 (Venus Public Education Society & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2050.16 (Venus Public School & Ors. Vs. Municipal Corpn. Gwalior & Anr.) WP.2397.16 (Omprakash Kukreja Vs. Municipal Corpn. Gwalior & Anr.) WP.7728.16 (Madhav Institute of Technology Science Vs. State of M.P. and others) WP.1575.17 (Bal Keshanand Ji Shiksha Prasar Samiti Vs. Municipal Corpn. Gwalior & Anr.) WP.2115.17 (Shri Ramnath Singh Shiksha Prasar Samiti Vs. State of M.P. and another) WP.2906.17 (Manodeep Higher Education Society Vs. Municipal Corpn, Gwalior & Anr.) and Section 127(6)(o) of M.P. Municipalities Act 1961 has exempted the building/land which is exempted from property tax from the educational cess. The notification is in the following term:
^^Kkiu dzekad 231@18&3@2000 fnukad 25@01@2000 }kjk e-iz- uxj ikfydk fuxe vf/kfu;e 1956 dh /kkjk 132 dh mi/kkjk ¼6½ ds [k.M ¼vks½ rFkk e-iz- uxj ikfydk vf/kfu;e] 1961 dh /kkjk 127 dh mi/kkjk ¼6½ ds [k.M ¼vks½ ds vuqlkj f'k{kk migj fu/kkZfjr djus ds vkns'k fuEufyf[kr 'krksZa ds v/khu tkjh fd;s x;s gS%& Þ,sls Hkou o Hkwfe tks lEifRr dj ls eqDr gS dks NksM+dj vU; Hkou@Hkwfe ij muds okf"kZd HkkM+k ewY; ij ml nj ls vkjksfir fd;k tk;s tks nj uxjh; fudk; fu/kkZfjr djsa ijUrq ;g nj okf"kZd HkkM+k ewY; ds 5 izfr'kr ls vf/kd ugh gksxhß In view whereof w.e.f. 25.01.2000, the building and land exempted from the property tax are exempted from paying the educational cess.
In view of above, the levy of taxes under Section 132(1)(c)(d) & (e) and Water Cess under Section 132A of 1956 Act is upheld. Whereas, the property tax under Section 132(1), Urban Development Cess under Section 132(1)(o) w.e.f. 21.05.2007 and education cess w.e.f. 25.01.2000 THE HIGH COURT OF MADHYA PRADESH 9 WP.1587.16 (Daya Devi Education Committee Vs. Municipal Corpn. Gwalior & Anr.) WP.2023.16 (Venus Public School & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2049.16 (Venus Public Education Society & Anr. Vs. Municipal Corpn. Gwalior & Anr.) WP.2050.16 (Venus Public School & Ors. Vs. Municipal Corpn. Gwalior & Anr.) WP.2397.16 (Omprakash Kukreja Vs. Municipal Corpn. Gwalior & Anr.) WP.7728.16 (Madhav Institute of Technology Science Vs. State of M.P. and others) WP.1575.17 (Bal Keshanand Ji Shiksha Prasar Samiti Vs. Municipal Corpn. Gwalior & Anr.) WP.2115.17 (Shri Ramnath Singh Shiksha Prasar Samiti Vs. State of M.P. and another) WP.2906.17 (Manodeep Higher Education Society Vs. Municipal Corpn, Gwalior & Anr.) being exempted in respect of building/land of educational institutions are set aside.
The petitions are disposed finally in above terms. No costs.
(Sanjay Yadav) Judge pd Digitally signed by PAWAN DHARKAR Date: 2018.03.23 19:09:19 -07'00'