Allahabad High Court
Shiv Ram Das Gulati Memorial ... vs State Of U.P. And 4 Others on 19 August, 2021
Bench: Naheed Ara Moonis, Saumitra Dayal Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD
?Court No. - 3
Case :- WRIT TAX No. - 571 of 2021
Petitioner :- Shiv Ram Das Gulati Memorial Society
Respondent :- State Of U.P. And 4 Others
Counsel for Petitioner :- Rahul Agarwal
Counsel for Respondent :- C.S.C.,Manoj Kumar Singh
Hon'ble Naheed Ara Moonis,J.
Hon'ble Saumitra Dayal Singh,J.
Heard Shri Rahul Agarwal, learned counsel for the petitioner, Shri B.P.Singh Kachhawah, learned Standing Counsel for the State and Shri S.D. Kautilya, learned counsel for the Municipal Corporation.
Challenge has been raised to the letter/order dated 01.07.2021 and the consequential communication dated 17.07.2021 both issued by the Zonal Officer, Zone-5, Naini, Prayagraj, whereby, the clear opinion has been expressed that the petitioner's establishment comes under the municipal area Prayagraj making it liable to general tax under the Uttar Pradesh Municipal Corporation Act, 1959 (hereinafter referred to as the 'Act').
Relying on a Division Bench judgment of this Court passed in Civil Misc. Writ Petition No. 308 of 1999 (Executive Board of Methodist Church in India and another vs. Municipal Corporation, Bareilly), decided on 17.08.2004, learned counsel for the petitioner has vehemently urged that this Court had clearly recognized and held the meaning of the word 'charitable purpose' bearing in Section 177(b) of the Act to be the same as assigned under the Income Tax Act, 1961. Applying that principle, the Division Bench had clearly held as under:-
"From a reading of the aforesaid provisions it is seen that under clause (b) buildings and land or portions thereof solely occupied and used for a charitable purpose has been excluded from the power of levy of general tax by the Nagar Nigam. The word ''charitable purpose' has not been defined under the Adhiniyam. It is not in dispute that the petitioners are running a 350 bed hospital at Bareilly. The hospital has been recognized by the Government of India as a charitable institution for the purpose of income tax. If an institution has been recognized as a charitable institution for the purpose of income tax, even in the absence of any definition of a charitable institution in the Adhiniyam the same principle would be applicable for determining as to whether the institution is for charitable purpose or not and therefore the hospital would be treated as having been set up for charitable purpose and exemption provided under section 177(b) of the Adhiniyam is fully attracted in the present case."
The decision of the Hon'ble Supreme Court in the case of Municipal Corporation of Delhi vs. Children Book Trust (1992) 3 SCC 390, taking a different view, is clearly distinguishable as held by the earlier Division Bench, in view of the difference of the language/provision of the Delhi Municipal Corporation Act, 1957. Thus, it has been further submitted that the Prayagraj Municipal Corporation has no jurisdiction to assess the petitioner to general tax as it has established and it runs an educational institution, that qualifies as a charitable purpose, under Section 177(b) of the Act.
On the other hand Shri Kautilya, has vehemently contended that at present, no assessment has been made, either of general tax under the Act or of water tax or sewage tax etc. He further contended that the communications impugned in the present petition in so far as they make clear observations to the contrary are without any occasion. The Zonal Officer is not the competent authority to make any assessment order. Those communications do not create any liability of general or other tax, on the petitioner.
Insofar as the proceedings are concerned, it has been submitted that they arose on account of certain areas being notified under the municipal area of the Prayagraj Municipal Corporation. The petitioner's construction being situated in such notified area, under Section 222 of the Act, notice was issued by the Zonal Officer to bring to account the petitioner's constructions, without creating or enforcing any liability of tax, at this stage. As to the exemption claim, Shri Kautilya states that the same may be considered at the stage of assessment, if that arises.
In view of such statement made by Shri Kautilya, no useful purpose would be served in keeping the present petition pending or calling for counter affidavit, at this stage.
The writ petition is accordingly, disposed of with the following directions:-
1. The communication dated 01.07.2021 and 17.07.2021 insofar as they express a view that the petitioner is not engaged in an activity that may fall under the definition of 'charitable purpose' under Section 177(b), are extraneous to the proceedings under Section 222 of the Act. The same may not bind the parties in any proceedings. Therefore, they be treated as expunged.
2. The petitioner may submit the details of all the constructions raised by it for the purpose of bringing the same to account under Section 222 of the Act for the purpose of assessment of water tax and sewage tax, only.
3. Insofar as the issue of imposition of general tax is concerned, the same may not be imposed on the petitioner unless it is first visited with an assessment notice and in any case, only upon a clear consideration of the law laid down of the Division Bench of this Court in (Executive Board of Methodist Church in India and another vs. Municipal Corporation, Bareilly).
Order Date :- 19.8.2021
Saurabh
