Kasturba Health Society vs State Of Maharashtra And Ors.
2004 Latest Caselaw 1274 Bom

JUDGMENT

S. U. KAMDAR, J

1. In the present petition, the petitioner is challenging the notice dated 30th October, 2003 claiming property tax from the petitioner. Petitioner is also seeking declaration that the petitioner is entitled to the exemption under the provisions of Rule 7(l)(c) of the Maharashtra Village Panchayat Taxes and Fees Rules, 1960.

2. These two petitions are filed by Kasturba Health Society, a society registered Under the provisions of the Societies Registration Act, 1860 and also a public trust registered under the Bombay Public Trusts Act, 1950. This Trust is running a medical education institute in the name and style of Mahatma Gandhi Institute of Medical Education which is imparting education to the students all over the country. In the said institute petitioner has established a hospital i.e. Kasturba Hospital, Sewagram which is treating the patients from all over Vidarbha and the adjoining States of Madhya Pradesh and Andhra Pradesh. For the purpose of running the said medical education institute, the petitioner has a medical college building and hospital and administrative building.

3. The respondents are claiming the property tax from the petitioners in respect of the aforesaid properties belonging to the petitioners. In respect of said claim, the petitioners contend that they are entitled to exemption under the provisions of Rule 7 of the Maharashtra Village Panchayats Taxes and Fees Rules, 1960. Under the said Rule 7, lands and buildings for religious, educational or charitable purposes are exempted from the levy of the property tax. Ignoring the said provision, the respondent No. 4 issued bills for payment of tax on 17-12-2003 for Rs. 2,69,1107- and claimed property taxes from the petitioners.

4. The learned Counsel for the petitioners contended before us that the petitioner is a public charitable trust and was running an institution for educational and charitable purposes and hence they are entitled for exemption Under Rule 7, sub-rule 2(c) of the Maharashtra Village Panchayats Taxes and Fees Rules, 1960. It has been further contended that the petitioner-institute is a charitable institute and cannot be deprived of exemption under the said Rule. It is, therefore, contended by the petitioners that the demand raised by respondent No. 4 of the property tax in respect of the said property is unsustainable in law and is liable to be quashed and set aside.

5. On the other hand, learned Counsel appearing for the respondents contends that some part of the property is used for other than educational/charitable purpose i.e. hostel and administrative office building, and thus the petitioner is not entitled to said exemption benefit.

6. The issue raised herein is already concluded by the judgment of the Division Bench of this Court in the case of Sir Jamshetjee Jeejeebhoy Baronet and Ors. v. State of Maharashtra and Ors., 2004(4) Mh. L. J. 208 in which the Division Bench has held as Under :

Mr. Saraf also drew our attention to a decision of the Apex Court in P. C. Raja Ratnam Institution vs. Municipal Corporation of Delhi and Ors., 1990 (Supp) SCC 97 where the Court categorically held that the test of 'charitable purpose' is satisfied by the proof of any of the three conditions namely relief of the students is also not decisive inasmuch as the expenditure incurred in running the society may be supported either wholly or in part by voluntary contributions. In that case, a non profit making registered society which was running a school in Delhi was denied exemption Under Section 115(4)(a) of the Delhi Municipal Corporation Act, 1957. The learned Single Judge of the Delhi High Court held that though the school was imparting education but in order to qualify for exemption it had to give education and medical relief.

Admittedly, fees are charged from students and mere imparting of education cannot be called giving relief. This view of the Delhi High Court was expressly overruled by the Apex Court.

In the present case, the petitioner trust is a charitable trust and carrying on activity of a Goshala (Panjarpol). There cannot be no doubt that running a Goshala is a charitable activity. We may quote the words of Chagla, C. J., in D. R. Pradhan Charity Commissioner, Bombay, v. The Bombay State of Federation of Goshala and Panjarpoles, 1957 ILR 140 ;

"........ that any society which seeks to advance the object ofsaving cows from destruction and improving the standard of cattle would be working for an object of general public utility."

"We are satisfied that the petitioner trust whose sole object is running and maintaining Goshala is entitled to exemption from levy of house tax Under Rule 7(2)(c). The main object of the petitioner Trust is to run Goshala and even if the petitioner is earning some profit by selling cattle or milk for meeting the expenses of Goshala it cannot be said that the petitioner-trust ceased to be a charitable trust. In this connection, it is relevant to note, that the authorities have not recorded a finding that any surplus arising from the operation of the petitioner is not utilised for the trusts or distributed to any individuals. Merely because the trust is also conducting incidental activity of selling milk and cattle to needy farmers does not mean that it is not a charitable trust within the meaning of rule 7(2)(c)."

7. In our view, what is required to be seen is whether the dominant purpose for which the property is used for is charitable or educational purpose or not. In the present case, the said property is used for charitable and educational purposes. Use of the property for hostel and/or administrative office is incidental user to the running of educational institution and hospital. In view thereof, we find that rejection of the benefit to the petitioner is without any merits. In the aforesaid circumstances, we allow the present petition in terms of prayer Clauses (a) and (b) of the petition. Petition disposed of accordingly. There shall be no Order to costs.