Chattisgarh High Court
The Malankara Orthodox Syrian Church vs Municipal Corporation Bhilai on 17 February, 2025
1
2025:CGHC:8138
NAFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
WPT No. 30 of 2025
1 - The Malankara Orthodox Syrian Church, Through Its Authorized Representative
Having Its Office At Catholicate Palace, Kottayam, Kerala, India.
2 - St. Thomas Malankara Orthodox Syrian Church Mission, Through Its Authorized
Representative Having Its Registered Office At St. Thomas Ashram, Kailash Nagar,
Industrial Estate P.O., Bhilai, District Durg, Chhattisgarh.
3 - Christian College of Engineering & Technology, Through Its Authorized
Representative, Dr. Stephanos Mar Theodosius Road, Kailash Nagar, Near Industrial
Estate, Bhilai, District Durg, Chhattisgarh.
--- Petitioners
versus
1 - Municipal Corporation- Bhilai Through Its Commissioner, Bhilai, District Durg,
Chhattisgarh
2 - Office of The Assistant Commissioner of Income Tax, Exemption Circle - TVM,
Income Tax Department of India Having Its Office At Aaykar Bhawan, 1st Floor,
Kawdiar Po, Thiruvananthapuram, Kerala.
--- Respondents
For Petitioners : Mr. Abhishek Sinha, Senior Advocate assisted by Mr.
Pankaj Singh & Ms. Shristi Upadhayay, Advocates.
For Respondent No. 1. : Ms. Fouzia Mirza, Senior Advocate assisted by Mr.
Naveen Shukla, Advocate.
For Respondent No. 2 : Mr. Ajay Kumrani, Advocate.
Hon'ble Shri Justice Deepak Kumar Tiwari
Order On Board
17.02.2025
1. After arguing sometime on I.A. No. 01/2025, which is an application for
interim relief, with the consent of the parties, the matter is heard finally.
2. Learned Senior Counsel would submit that though petitioner No. 3 is an
educational institution and runs the college for higher education in four
branches of engineering, the said institution is run and operated under the
aegis of petitioner Nos. 1 & 2 and petitioner No. 2 is an inseparable part of
petitioner No. 1, which is duly registered and approved under Section 12A and
10 (23C) of the Income Tax Act, 1961 and is eligible for exemption under
Chapter III of the Income Tax Act, 1961. He would further submit that though,
there is a clear statutory provision under Section 136 (c) of Municipal
Corporation Act, 1956 (hereinafter referred to as '1956 Act') has exempted all
the educational institutions run and operated by charitable trusts, educational
institutions, which are registered under Section 12A of the Income Tax Act,
1961 and the said institution is wholly exempted for the payment of property
tax and other educational institutions may be given a rebate of up to fifty per
cent of the property tax. If the petitioner No. 3 runs the institution under the
aegis of petitioner No. 1, which is a registered charitable trust and also
exempted under Section 12A of the Income Tax Act, 1961, so the petitioner
No. 3/ educational institution shall be wholly exempted. For the sake of
brevity, the said provision of Section 136 (c) of Municipal Corporation Act,
1956 reads as under:-
"...136(c) educational institution of Government of India, State
Government, Municipal Corporations, registered Charitable
Trusts, educational institutions registered under Section 12A of
the Income Tax Act, 1961, shall be wholly exempted and other
educational institutions may be given a rebate of upto fifty
percent of the property tax as assessed by the Corporation in
accordance with norms that may be prescribed by the State
Government; ''
3. Learned Senior Counsel would further submit that petitioner No. 3 has also
filed the return in the same PAN number, which was used by petitioner No. 1
and the same is accepted by the Income Tax Authority and meaning thereby,
petitioner No. 3/educational institution is also exempted for the payment of
Income Tax Act, 1961. Learned Senior counsel would further submit that since
2010, even the fact about the exemption of the institution was brought to the
notice of the Municipal Corporation/Respondent No. 1, and from time to time
demand notice has been issued to the institution and an objection has been
raised in terms of Section 147 of Municipal Corporation Act, 1956, but the
authority without following the procedure established under the law, though
there is clear procedure stipulated under Section 148 about deciding the
objection by the Commissioner and the objection shall be decided in the
presence of objector or his authorized agent. No such procedure has been
followed and the Municipal Corporation/Respondent No. 1 acting in an
arbitrary manner issued a further demand notice in terms of Section 174 of the
Municipal Corporation Act, 1956 (hereinafter referred to as '1956 Act') for
the payment of property tax for the period from 2010-11 to 2023-24 to the
tune of Rs. 3,16,45,175/-, so he prays to stay the effect and operation of the
said notices.
4. Learned Senior Counsel for respondent No. 1 would submit that there is a
efficacious alternative remedy available to the petitioner in terms of Section
184 of Municipal Corporation Act, 1956 (hereinafter referred to as '1956
Act'), which provides appeal against any notice of demand issued under sub-
section (1) of section 174, without availing such efficacious alternative
remedy, there is no reasonable justification to the petitioner to directly
approach the High Court. She would further submit that even the demand
notice has not been challenged and for the said proposition, she would rely
upon the judgment of Hon'ble Apex Court in the matter of Varimadugu OBI
Reddy vs. B. Sreenivasulu and Others1, and referred paras 34 & 35 as under:-
" 34.The order of the Tribunal dated 1st August, 2019 was an appealable
order under Section 18 of the SARFAESI Act, 2002 and in the ordinary
course of business, the borrowers/person aggrieved was supposed to
avail the statutory remedy of appeal which the law provides under
Section 18 of the SARFAESI Act, 2002 in the absence of efficacious
alternative remedy being availed, there was no reasonable justification
tendered by the respondent borrowers in approaching the High Court
and filing writ application assailing order of the Tribunal dated 1st
August, 2019 under its jurisdiction under Article 226 of the Constitution
without exhausting the statutory right of appeal available at its
command.
35. This Court in the judgment in United Bank of India vs. Satyawati
Tondon & Others, was concerned with the argument of alternative
remedy provided under the SARFAESI Act, 2002 and dealing with the
argument of alternative remedy, this Court had observed that where an
effective remedy is available to an aggrieved person, the High Court
ordinarily must insist that before availing the remedy under Article 226
of the Constitution, the alternative remedy available under the relevant
statute must be exhausted. Paras 43, 44 and 45 of the said judgment are
relevant for the purpose and are extracted below:
"43. Unfortunately, the High Court overlooked the settled law
that the High Court will ordinarily not entertain a petition
under Article 226 of the Constitution if an effective remedy is
available to the aggrieved person and that this rule applies
with greater rigour in matters involving recovery of taxes, cess,
fees, other types of public money and the dues of banks and
other financial institutions. In our view, while dealing with the
petitions involving challenge to the action taken for recovery of
the public dues, etc. the High Court must keep in mind that the
legislations enacted by Parliament and State Legislatures for
recovery of such dues are a code unto themselves inasmuch as
1 2023(2) SCC 168
they not only contain comprehensive procedure for recovery of
the dues but also envisage constitution of quasi-judicial bodies
for redressal of the grievance of any aggrieved person.
Therefore, in all such cases, the High Court must insist that
before availing remedy under Article 226 of the Constitution, a
person must exhaust the remedies available under the relevant
statute.
44. While expressing the aforesaid view, we are conscious that
the powers conferred upon the High Court under Article 226 of
the Constitution to issue to any person or authority, including
in appropriate cases, any Government, directions, orders or
writs including the five prerogative writs for the enforcement of
any of the rights conferred by Part III or for any other purpose
are very wide and there is no express limitation on exercise of
that power but, at the same time, we cannot be oblivious of the
rules of self-imposed restraint evolved by this Court, which
every High Court is bound to keep in view while exercising
power under Article 226 of the Constitution.
45. It is true that the rule of exhaustion of alternative remedy is
a rule of discretion and not one of compulsion, but it is difficult
to fathom any reason why the High Court should entertain a
petition filed under Article 226 of the Constitution and pass
interim order ignoring the fact that the petitioner can avail
effective alternative remedy by filing application, appeal,
revision, etc. and the particular legislation contains a detailed
mechanism for redressal of his grievance."
5. Learned Senior Counsel for respondent No. 1 would further submit that under
the statutory appellate provision, there is mandatory requirement of pre-
deposit of the notice of the demand amount, the petitioner only with an
intention to not to deposit the aforesaid amount, directly approached this High
Court in a shortcut method, which is not permissible in law. She would further
submit that when the statutory requirement of pre-deposit for availing the
appellate remedy is enacted by the legislature, the same is mandatory in nature
and for this proposition, she would rely upon the judgment of Hon'ble Apex
Court in the matter of Narayan Chandra Ghosh vs. Uco Bank and others2,
and the relevant para is 8, which reads as under:-
"8. It is well settled that when a statute confers a right of appeal,
while granting the right, the legislature can impose conditions
for the exercise of such right, so long as the conditions are not so
onerous as to amount to unreasonable restrictions, rendering the
right almost illusory. Bearing in mind the object of the Act, the
conditions hedged in the said proviso cannot be said to be
onerous. Thus, we hold that the requirement of pre-deposit under
sub-section (1) of Section 18 of the Act is mandatory and there is
no reason whatsoever for not giving full effect to the provisions
contained in Section 18 of the Act. In that view of the matter, no
court, much less the Appellate Tribunal, a creature of the Act
itself, can refuse to give full effect to the provisions of the
statute. We have no hesitation in holding that deposit under the
second proviso to Section 18 (1) of the Act being a condition
precedent for preferring an appeal under the said section, the
Appellate Tribunal had erred in law in entertaining the appeal
without directing the appellant to comply with the said
mandatory requirement."
6. Learned Senior Counsel for respondent No. 1 would further submit that even
under the rules enacted under the Municipal Corporation Act, 1956
(hereinafter referred to as '1956 Act') namely, Chhattisgarh Municipality
(Determination of Taxable Property Value of Buildings/Land) Rules, 2021
( hereinafter referred to as "2021 Rules"). Under Rule 12 of the said Rules, it
is obligatory for the owner to file the return, even the institution which comes
under the exempted category. She would further submit that in the year 2010 a
wrong self- assessment return has been filed, for which a demand notice has
2 2011 (4) SCC 548
also been issued. She would further submit that though the several
communications were made to the petitioners/organisations, but they had not
filed any particular document from the income tax authority to demonstrate
that the petitioner No. 3/educational institution falls under the exempted
category, thus she prays for sans substratum petition is liable to be dismissed.
7. It is well established that mere availability of an alternative remedy of appeal
that the jurisdiction of High Court under Article 226 has not been ousted
where the controversy is purely a legal one and the determinity of the
entertainability is solely within the jurisdiction of the High Court and the said
is well settled in the Judgment of Hon'ble Apex Court in the matter of
Whirlpool Corporation Vs. Registration of Trade Marks, Mumbai and
Others3, carved out the exceptions on the existence, whereof a writ court
would be justified in entertaining a writ petition despite the party approaching
in not having availed the alternative remedy provided by the statue, the same
reads as under:-" (i). where the writ petition seeks enforcement of any of the
fundamental rights; (ii) where there is violation of principal of natural justice
(iii) where the order of the proceedings are wholly without the jurisdiction or
the vires of an act is challenged."
8. Reverting back to the facts of the present case, it is explicit that petitioner No.
3/educational institution continuously raised the objection, the said institution
is under the exempted category under Section under Section 136 (c) of
Municipal Corporation Act, 1956 (hereinafter referred to as '1956 Act') and
there is a specific procedure if any such objection has been raised about the
valuation of the property tax that the Commissioner shall give a notice in
writing to the objector of the time and place at which his objection will be
investigated and after giving the opportunity of personal hearing to the
3 1998 (8) SCC 1
objector, any such objection has been determined, when a query has been put
to the learned Senior Counsel, from the record, it is explicit that no such
procedure has been followed, though the legislature in clear terms mandated to
fix the time and place to hear the objection.
9. The said provision of Section 148 of Municipal Corporation Act, 1956
(hereinafter referred to as '1956 Act') is reproduced hereinbelow for ready
reference as under:-
" 148. Investigation of objections by Commissioner- (1) All such
objections shall be entered in a register to be maintained for the
purpose and, on receipt of any objection, the Commissioner shall give
a notice in writing to the objector of the time and place at which his
objection will be investigated.
(2) At the time and place so fixed the Commissioner shall hear the
objection, in the presence of the objector or his authorized agent if he
appears, or may, for reasonable cause, adjourn the investigation.
(3) when the objection has been determined, the order passed on such
objection shall be recorded in the said register and, if necessary an
amendment made in the assessment list in accordance with the result
of the objection."
10. Having heard the submissions of learned Senior counsel for the parties, this
Court finds appropriate to direct the competent authority/Respondent No. 1/
Commissioner, Municipal Corporation, Bhilai to decide the objection raised
by the petitioner No. 3/educational institution in terms of procedure stipulated
under Section 148 of Municipal Corporation Act, 1956 (hereinafter referred to
as '1956 Act') and it is further expected from the said authority that if any
document is required from the authority of the income tax, reasonable time of
at least eight weeks must be given to the petitioner No. 3/educational
institution to obtain any such certificate from the competent authority. After
applying any such certificate from the authority, if the petitioner No.
3/educational institution fails to produce within the said period before passing
any final order on the objections and if the petitioners had already preferred
application before the authority for obtaining any such document from the
income tax authority. The petitioner No. 3/educational institution shall move
for obtaining such certificate from the competent authority within the period
of 15 days of this order. It is always expected from the taxation authority, if
any objection has been raised about the exempted category, then a speaking
order has to be passed and only because want of producing of certain
certificates, when the authority itself is competent to verify the said fact from
the concerned authority to avoid any hardship to the tax payer. This Court
makes a serious note that though the objection has been raised for more than a
decade, but no proper speaking order has been passed and the matter has not
been finally determined. So, it is expected from the authority to decide the
issue in an expeditious manner and pass a fresh speaking order preferably
within an outer limit of 06 months. Till such adjudication, no coercive steps
shall be taken for the earlier notices and the same shall be kept in abeyance.
11. With the aforesaid observations, the writ petition stands disposed of.
Sd/-
(Deepak Kumar Tiwari)
Date: JUDGE
AMIT PATEL
