HIGH COURT OF JUDICATURE AT ALLAHABAD A.F.R. Court No. 10 Civil Misc. Writ Petition No. 1562 of 2010 Moti Lal Nehru National Institute of Technology, Allahabad through its Registrar ..... Petitioner Vs. State of U.P. and others ..... Respondents With Civil Misc. Writ Petition No. 367 of 2011 Moti Lal Nehru National Institute of Technology, Allahabad through its Registrar ..... Petitioner Vs. State of U.P. and others ..... Respondents Hon. Arun Tandon,J.
Hon. Shamsher Bahadur Singh, J.
Heard Sri Prashant Shukla, Advocate on behalf of the petitioner and Sri Rakesh Bahadur Singh, Advocate on behalf of the Jal Kal Vibhag, Allahabad.
These two writ petitions have been filed by Motilal Nehru National Institute of Technology, Allahabad through its Registrar.
By means of the first writ petition (Writ Petition No. 1562 of 2010) petitioner seeks quashing of the notice dated 09.07. 2010 and the order dated 27.09.2010 (Annexure 6 and 7 to the said writ petition), whereby the petitioner has been called upon to deposit the current house tax along with arrears. Reference page 53 and 56 of the writ petition.
It is also prayed that a mandamus be issued by this Court declaring that the petitioner is not liable to pay service charges under the provisions of the U.P. Municipal Corporation Act, 1959 as per the Government of India Notification dated 29.03.1967 and dated 26.04.1994. Petitioner has also prayed for quashing of the order, whereby its bank accounts were attached for recovery of the said house tax.
By means of the second writ petition, the petitioner has questioned the demand of water tax and sewer tax by the Jal Kal Vibhag, Allahabad on the ground that the assessment of the house tax, which is the basis for computation of the water tax and sewerage tax itself is under challenge in Writ Petition No. 1562 of 2010, an interim order is operating in their favour, therefore the impugned demand was unsustainable. Other pleas as raised in the first writ petition have been reiterated.
Petitioner has also prayed for quashing of the order dated 24.02.2011, whereunder the Executive Engineer, Jal Kal Vibhag, Allahabad had intimated to the petitioner that the demand is being raised in respect of water charges and sewer charges and not in respect of service tax. The petitioner was called upon to deposit the money, failing which suitable action shall be taken.
On behalf of the petitioners Sri Prashant Shukla, Advocate submitted before us that up to the year 2007 Motilal Nehru Engineering College was a duly registered society under the Societies Registration Act and was governed by the order of the State Government and the Union of India. It had been making payment of the house tax and water tax to the Nagar Nigam. However, with the enforcement of National Institution of Technology Act, 2007 (hereinafter referred to as 'Act of 2007') it has now become an autonomous statutory body. Therefore, in view of the Government Notification dated 29th March, 1967 and in view of Section 177 of the Municipal Corporation Act, 1959 (hereinafter referred to as 'Act, 1959') the petitioner stands exempted from payment of service charges and therefore the demand of house tax is illegal.
We may first take note of the Government of India Notification dated 29th March, 1967, which has been enclosed as Annexure No. 5 to the Writ Petition No. 1562 of 2010.
From a simple reading of the said notification it is apparently clear that the same only provides a mechanics for calculation of the service charges and the manner of calculation of annual value of the Central Government properties. The said notification has no application in the case of the petitioner, inasmuch as the petitioner, which was originally a registered society, has now been made a statutory body under the provisions of Act of 2007. But this will not make the petitioner institute a Central Government property so as to attract the provisions of the Notification dated 29th March, 1967. We, therefore, reject the first plea raised on behalf of the petitioner.
So far as Section 177 of the Act, 1959 is concerned, we find that it exempts certain buildings from the imposition of general tax. Clause (b) and (c) of Section 177, which would be relevant for our purposes, read as follows:
"177. General tax on what premises to be levied.- The general tax shall be levied in respect of all buildings and lands in the City except-
(a) ....
(b) buildings and lands or portions thereof solely occupied and used for public worship or for a charitable purposes;
(c) building solely used as schools and intermediate colleges whether aided by the State Government or not, fields, farms and gardens of Government aided institutes of research and development, playgrounds of Government aided or unaided recognized educational institutions and sports stadium."
The counsel for the petitioner submitted that his case is covered by clause (b) as it is a charitable institution imparting education to the students of various courses offered by the said institute.
From a reading of clause (b) it shall be seen that it exempts only such buildings or part of the building which is solely occupied for charitable purposes.
We may only record that the petitioner institute has large number of industrial plots, which it has let out to various industries and for which it is charging rent. Therefore, it has to be held that the building or portion thereof, which is not solely occupied for charitable purpose i.e. education, will not stand excluded from payment of general tax under Section 177 (b) of the Act, 1959. It cannot be said in the facts of the case that the entire properties of the petitioner institution stand excluded from the general tax under Section 177 of the Act, 1959.
We may also record that the levy and collection of water charges and sewer charges has been held to be a fee by the Apex Court in the case of Union of India vs. State of U.P.; (2007) 11 SCC 324.
Under Section 53(4) of Water Supply and Sewage Act, 1975 the annual value of the property determined by the Municipal Corporation is the basis for computation of water charges and sewage charges, as no other agency has been appointed for the purpose.
Therefore, the computation of the annual value of the property under the provisions of the Act, 1959 is a must. The petitioner institute cannot avoid such determination of annual value even though a part of its building may be used for charitable purpose and may be excluded from general tax under Section 177 of the Act, 1959.
We may record that determination of the annual rental value of the property is a step prior to the levy of general tax and therefore, even if part of its property is exempt from general tax, determination of the annual rental value of the entire property for the purposes of water tax and sewage tax has to be effected and it cannot be said to be illegal in any manner. This annual value is to be used for other purposes like water charges and sewage charges.
From the records of the present writ petitions we find that repeatedly notices were sent to the petitioner institute to participate in the assessment proceedings for determination of the annual value of its properties and to deposit the charges as demanded. But every time the petitioner responded by saying that it is exempt from payment of tax under the Government Notification dated 29th March, 1967/ under Section 177 of the Act, 1959. Reference in that regard may be had to the letter of the petitioner dated 18.01.2010 and dated 03.11.2010 (Annexure 3 and 10 to Writ Petition No. 1562 of 2010).
In view of the what has been noticed herein above by us, we are of the considered opinion that if the petitioner has any grievance in the matter of quantification of the annual value of its properties and the corresponding quantification of the house tax demand thereon, he has to take recourse to the remedy under Section 472(e) of the Act, 1959 by filing an appeal. It is also at liberty to seek such interim protection in his appeal, as may be advised.
The issue as to what part of the building of the institute is being used for charitable purpose and what part of the property is not being used for said purpose is an issue of fact. It needs to be examined by the statutory authorities at the first instance.
As already noticed above, the petitioner cannot claim exemption from payment of house tax in respect of entire property owned by it. Similarly, the petitioner cannot avoid payment of sewage tax and water tax under the Water Supply and Sewage Act, 1975, as it has been held to be a fee by the Apex Court in the case of Union of India vs. State of U.P. (supra).
The quantification of the sewage tax and water tax is dependent upon the annual assessment of the property as determined by the Municipal Corporation in view of Section 53(4) of the Water Supply and Sewage Act, 1975. Therefore, as on date we find no illegality in the demand so raised.
However, money so demanded shall always be subject to the orders to be passed in respect of the annual rental value of the property by the competent court/authority on the appeal, which may be filed by the petitioner.
In view of the aforesaid, both the writ petitions are dismissed with liberty to the petitioner to file an appeal in the matter of annual assessment of its property in question.
However, in the facts of the case it is provided that if the appeal is filed by the petitioner within two weeks from today along with certified copy of this order, no objection with regard to the delay in filing of the appeal shall be entertained.
In any notice had been issued to the petitioner under Section 209 by the Municipal Corporation and the petitioner has filed objections to the same, we provide that the Corporation shall decide the objections filed by the petitioner, preferably within four weeks from the date a certified copy of this order is filed before it.
Both the writ petitions are dismissed subject to the observations made. Interim orders are discharged.
Date:- 01.05.2015 Pkb/