Karnataka High Court
Veerasaiva Vidyavardhaka Sangha ... vs The State Of Karnataka on 27 June, 2024
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NC: 2024:KHC-D:8791
WP No. 103253 of 2024
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 27TH DAY OF JUNE, 2024
BEFORE
THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM
WRIT PETITION NO. 103253 OF 2024 (LB-TAX)
BETWEEN:
SRI SUGURESHWARA EDUCATIONAL AND
CHARITABLE TRUST, BALLARI,
(REGISTERED TRUST)
4TH MAIN, KUVEMPU NAGAR,
BALLARI-583104,
REPRESENTED BY ITS MANAGING DIRECTOR,
SRI. CHANDRASHEKAR S. PATIL,
S/O. SADASHIVAPPA GOWDA,
AGE: 48 YEARS, OCC: MANAGING DIRECTOR,
R/O. #23, 4TH MAIN, 1ST CROSS,
KUVEMPU NAGAR-583104,
BALLARI-583104.
...PETITIONER
(BY SRI. JAGADISH PATIL, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA,
DEPARTMENT OF URBAN DEVELOPMENT,
BY ITS PRINCIPAL SECRETARY,
YASHAVANT
NARAYANKAR VIDHANA SOUDHA, DR. AMBEDKAR VEEDI,
BENGALURU -560001.
Location: HIGH
COURT OF
KARNATAKA,
DHARWAD 2. THE BALLARI CITY CORPORATION,
BENCH
R/BY ITS COMMISSIONER,
GADAGI CHENNAPPA CIRCLE,
(ROAYAL CIRCLE), BALLARI -583101.
3. THE DIVISIONAL COMMISSIONER,
DIVISIONAL OFFICE -01,
THE BALLARI CITY CORPORATION,
GADAGI CHENNAPPA CIRCLE,
(ROYAL CIRLCE ), BALLARI-583101.
...RESPONDENTS
(BY SRI. ASHOK T. KATTIMANI, AGA FOR R1;
SRI. C.V. ANGADI, ADV. FOR R2 & R3)
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NC: 2024:KHC-D:8791
WP No. 103253 of 2024
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT IN THE
NATURE OF CERTIORARI QUASHING THE IMPUGNED DATED
20.05.2024 AND UNNUMBERED NOTICE ISSUED BY THE 3RD
RESPONDENT VIDE ANNEXURE-K.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING,
THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
This petition is filed assailing the notice dated 20.05.2024 issued by respondent No.3 vide Annexure-K.
2. In the present case, petitioner asserts that the Sangha is established in 1916 and there are totally 46 educational institutions and 12 student hostels maintained by the petitioner-Sangha. The petitioner-Sangha claims that they are rendering yeoman service by imparting quality education and it is one of the reputed educational institution and is entitled for exemption in terms of Section 110(1)(i) of the Karnataka Municipal Corporation Act, 1976 (hereinafter referred to as 'the Act' for short). Feeling aggrieved by the impugned demand notice, the institution is before this court.
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NC: 2024:KHC-D:8791 WP No. 103253 of 2024
3. Learned counsel Sri.C.V.Angadi appearing for the Corporation citing the judgment rendered in the case of Hindustan Aeronautical Limited vs State of Karnataka, Department of Housing and Urban Development reported in (2011) 1 Kar.L.J.564, contends that petitioner-institution have to submit an application and make out a case for grant of exemption. Unless the exemption is granted, the petitioner-institution cannot avoid payment of property tax to the corporation.
4. The said defence set up by the learned counsel Sri.C.V.Angadi is dealt and considered by the Co-ordinate Bench of this court in W.P.No.100921/2024 disposed off on 14.02.2024. Similar defence was set up and the Co- ordinate Bench was not inclined to accede to the arguments advanced by the learned counsel for the respondent-corporation. Paragraph 6 would be relevant and the same is extracted, which reads as under:
"The decision in Hindustan Aeronautics Limited was one which is rendered in terms of the General Exceptions under Section 110 (1) (j) of the Act which related to buildings or lands -4- NC: 2024:KHC-D:8791 WP No. 103253 of 2024 belonging to Central Government or State Government. In terms of the said provision, there is no complete exemption to a Central Government or a State Government. The exemption is qualified in terms of the building being used for the purposes of the Government which would be exempted and if the property is used for residential or commercial purposes, even the Central Government or the State Government would be required to make payment of property tax. It is in those circumstances that this Court has held that an application has to be made for grant of exemption since there has to be an application of mind to determine if the concerned property since the usage of the concerned property would be amenable for exemption or not."
5. In the light of the observations made by the Co- ordinate Bench of this court and having regard to the fact that an educational institution is entitled to seek exemption, this court is not inclined to accede to the arguments advanced by the learned counsel for the respondent-corporation. As rightly held by the Co-ordinate Bench in W.P.No.100921/2024 (supra), the educational institution which is imparting education is entitled for exemption in terms of Section 110(1)(i) of the Act. The Act does not mandate that such educational institution have to seek exemption. If the corporation were to claim that any building used for the purpose other than -5- NC: 2024:KHC-D:8791 WP No. 103253 of 2024 educational purposes or a purpose which is not incidental to educational purposes, can levy tax.
6. On perusal of the demand notice, there is no indication by the authorities that petitioner-institution is using the building for the purpose other than educational purpose. The impugned demand notice is not preceded by any enquiry.
7. In that view of the matter, this court passes the following:
ORDER
i) The writ petition is allowed.
ii) The impugned demand notice dated 20.05.2024 issued by respondent No.3 vide Annexure-K is hereby quashed.
iii) Since the petitioner-institution is running an educational institution, petitioner-institution is accordingly exempted from paying property tax.
iv) Liberty is reserved to the respondent-
corporation to claim such property tax, if in the -6- NC: 2024:KHC-D:8791 WP No. 103253 of 2024 opinion of the respondent-corporation, the petitioner-institution is utilizing the portion of the building for the purpose other than educational purposes.
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JUDGE MBS Ct-mck List No.: 1 Sl No.: 0