Madhya Pradesh High Court
Chamelidevi Public School ... vs Indore Municipa Corporation Indore on 29 October, 2025
Author: Pranay Verma
Bench: Pranay Verma
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IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE PRANAY VERMA
ON THE 29th OF OCTOBER, 2025
WRIT PETITION No. 23486 of 2021
CHAMELIDEVI PUBLIC SCHOOL ADMINISTERED BY
AGRAWAL CHARITABLE TRUST
Versus
INDORE MUNICIPA CORPORATION INDORE AND OTHERS
Appearance:
Shri Vishal Baheti - Senior Advocate along with Shri Satyajeet
Mane - Advocate for the petitioner.
Shri Manoj Munshi - Senior Advocate along with Shri Lucky Jain-
Advocate for respondents.
ORDER
By this petition preferred under Article 226 of the Constitution of
India, the petitioner has challenged the impugned notice Annexure P/31
whereby direction has been issued for recovering the amount of property
tax and other taxes including Urban Development Cess and Education
Cess from the petitioner.
2. At the outset, learned counsel for the petitioner has brought to
the notice of this Court order dated 20.03.2018 passed by the Gwalior
Bench of the Court in W.P. No.1587 of 2016 [Daya Devi Education
Committee versus Municipal Corporation] to submit that the issue as
regards levy of property tax, Urban Development cess and Education
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cess in respect of building and land of educational institutions like the
present petitioner has already been decided and it has been held that they
would be exempted from payment of the such taxes. He has also relied
upon the order dated 13.06.2022 passed in W.P. No.6421 of 2020
[Pioneer Society for Professional Studies versus Indore Municipal
Corporation and another] wherein the said order has been followed.
3. In Pioneer Society for Professional Studies (supra) relying upon
the decision of Daya Devi Education Committee (supra) it has been held
by this Court as under:
"08. In Daya Devi Education Committee (supra) co-ordinate Bench of
Gwalior Bench of this Court has already dealt with and has decided the issues
raised in this petition as regards levy of Education Cess and Uraban
Development Cess upon Educational Institutions under Section 132 and 135
of the Act 1956 and has held as under :-
"Common issue arises for consideration in this batch of writ petitions
as to whether being an educational institution the petitioners would
be liable to pay Property Tax, Urban Development Cess and the
Educational Cess imposed by the respondent-Municipal Corporation
Gwalior, under Section 132 and 135 of the M.P. Municipal
Corporation Act, 1956 (for brevity "1956 Act"). The petitions are
analogously heard and decided by this common order.
Issue as regard to imposition of Property Tax under Section 135 of
1956 Act, in respect of educational institutions being exempted under
Section 136 of the 1956 Act from payment of property tax in respect
of building and land is no more res integra and has been decided by
the Division Bench in WP.No.3881/2010 (Shri Agrawal Educational
& Welfare Society Vs. The Municipal Corporation, Bhopal and
others) wherein it is held:-
"8. A bare reading of the above referred provisions clearly
establishes that property tax is one of the taxes which the Corporation
must impose but the imposition of this tax is subject to the provisions
of sections 135 and 136. Clause (c) of section 136 also clearly states
that exemption from levy of property tax applies to all the buildings
and lands or portions thereof used exclusively for educational
purposes. The only restriction is that buildings and lands should be
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owned by the educational institutions concerned or placed at the
disposal of such educational institutions without payment of any rent.
There is no express provision in the clause that exemption will not
apply to private and autonomous educational institutions which are
imparting professional and vocational education and while doing so
such educational institutions are making profit. It is also not possible
to read such an implied provision in the exemption clause. The
expression used "exclusively for educational purposes" is wide
enough to cover use for professional and vocational education by
private and autonomous colleges.
The expression "including schools" does not limit the scope of
"educational purposes" in the exemption clause. It is well settled that
where word "include" is used, the intention of the legislature is to
make the scope of expression extensive and not restrictive. For these
reasons, I have no hesitation in holding that the petitioners'
educational institutions are exempted from the imposition of property
tax in respect of buildings and lands used by them exclusively for
educational purposes.
In view whereof, in respect of the institutions covered under
Section 136 of 1956 Act and exempted from payment of property tax
on building and land, it is beyond competence of the Municipal
Corporation to levy such taxes.
However, with a caveat that it will be within the competence of
the Municipal Corporation to cause an enquiry to determine the
ownership of the building property in
possession of the educational institution and if it is found that such
building and land are not used exclusively for educational purposes
including schools, boarding houses, hostels and libraries and that the
building/land is on a lease rent, the Municipal Corporation would be
at liberty to charge property tax under Section 135 of 1956 Act.
As regard to the imposition of urban development cess, the issue is
also no more resintegra and has been decided by a Division Bench of
this High Court in "Essarjee Education Society Vs. State of M.P. and
others 2016(4) MPLJ 118" wherein it is held:
"13. The Rules which are adverted to in this paragraph are M.P.
Urban Development Cess (Collection) Rules, 2007, framed by the
State Govt. in exercise of the power conferred by sub- section (1) of
Section 13 read with sub- section (2) of Section 7 of the Madhya
Pradesh Upkar Adhiniyam, 1981 whereunder i.e. under the Act of
1981, the urban development cess under Part II is levied under
Section 6 which provides for -
6. Levy of cess on lands and buildings.- (1) there shall be charged, levied and
paid for each year an urban development cess on all lands or buildings or both
situated in municipal area or urban area at the rate of 2 per centum of the
annual letting value or annual value: Provided that wherethe lands or
buildings or both are in occupation of the owner himself, the rate of cess shall
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be one half of the rate aforesaid-
Provided further that no cess shall be charged, levied and paid in
respect of lands or buildings or both, for which property tax is not
leviable under the provisions of the law relating to local authority or
the Sampatti Kar Adhiniyam, as the case may be.
(2) The cess charged and levied under sub- section (1) shall be in
addition to tax charged and levied on lands or buildings or both in
respect of annual letting value or annual value thereof under the law
relating to local authority or the Sampatti Kar Adhiniyam, as the case
may be, and shall be payable by the owner in the same manner as that
tax.
(3) Subject to the provisions of this part, the provisions of the law
relating to local authority or the Sampatti Kar Adhiniyam, as the case
may be, and the rules made thereunder shall apply to the cess as if the
cess were a tax levied under the said law or the Sampatti Kar
Adhiniyam, as the case may be. The second proviso to Section 6 has
been substituted by M.P. Act No.11 of 2007w.e.f.21.5.2007.
15. Since the legislature has exempted the lands or buildings or
both, for which property tax is not leviable from cess, in our
considered opinion, the respondent- Corporation have no
authority even (under Section 132(6)(o) to impose urban
development cess. The imposition of urban development cess
and its recovery, therefore, cannot be upheld. The decision in
M.P. Cooperative Housing Society (supra) so far it upheld the
Corporation's power to recover the urban development cess is of
no help to the respondents because of insertion of second proviso
in sub-section (1) of Section 6 of the M.P. Upkar Adhiniyam,
1981 w.e.f. 21.5.2007 7-
Thus, with effect from 21.05.2007, the educational institutions
which are exempted from the property tax are also exempted
from paying the urban development cess.
As regard to exemption from educational cess though the
same was turned down in Essarjee Education Society (supra) by
concurring with the decision in "M.P. Co- operative Housing
Society and another Vs. State of M.P. and others 2002(4) MPHT
252". It is now informed that the State Government vide
Notification No.231/18-3/2000, dated 25.01.2000 issued in
exercise of powers conferred under Section 132(6)(o) of 1956
Act and Section 127(6)(o) of M.P. Municipalities Act 1961 has
exempted the building/land which is exempted from property tax
from the educational cess. The notification is in the following
term:
" ापन कमांक 231/18-3/2000 दनांक 25/01/2000 ारा म. . नगर
पािलका िनगम अिधिनयम 1956 क धारा 132 क उपधारा (6) के ख ड
(ओ) तथा म. . नगर पािलका अिधिनयम, 1961 क धारा 127 क उपधारा
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(6) के ख ड (ओ) के उपहर अनुसार िश ा िनधा रत आदे श िन निल खत
शत के अधीन जार कये गये है ः-
"ऐसे भवन व भूिम जो स प कर से मु है को छोड़कर अ य
भवन/भूिम पर उनके वा षक भाड़ा मू य पर उस दर से आरो पत कया जाये
जो दर नगर य िनकाय िनधा रत कर पर तु यह दर वा षक भाड़ा मू य के 5
ितशत से अिधक नह होगी"
In view whereof w.e.f. 25.01.2000, the building and land
exempted from the property tax are exempted from paying the
educational cess.
In view of above, the levy of taxes under Section 132(1) (c)(d)
& (e) and Water Cess under Section 132A of 1956 Act is upheld.
Whereas, the property tax under Section 132(1), Urban Development
Cess under Section 132(1)(o) w.e.f. 21.05.2007 and education cess
w.e.f. 25.01.2000being exempted in respect of building/land of
educational institutions are set aside. The petitions are disposed
finally in above terms. No costs."
09. Thus, it has been held that Urban Development Cess with effect from 21-
05-2007 and Education Cess with effect from 25-01-2000 is exempted in
respect of building/land of Educational Institutions like the present petitioner
which are exempted from payment of property tax. The aforesaid judgment
applies in full force to the facts of the present case also and I am in full
agreement with the same.
10. The State Government has by Notification No.231/18-3/2000 dated 25-01-
2000 issued in exercise of powers conferred under Section 132 (6) (o) of the
Act, 1956 and Section 127 (6) (o) of M.P. Municipalities Act, 1961 exempted
the building/land which is exempted from property tax from the Education
Cess. The said notification has been issued by the State Government in
exercise of statutory powers, thus its legality is not open to be looked into by
this Court in this petition where benefit of the said notification is sought to be
availed of. The contention of respondents that the said notification is beyond
the powers conferred by Section 132 (6) (o) of the Act, 1956 is liable to be
ignored and cannot be entertained as the said notification has been issued in
exercise of a statutory provision and has not been challenged by the
respondents. As
long as the said notification is in force, the same is bound to be given effect to
and it is not for this Court to adjudicate at the instance of the respondents the
legality of the said notification particularly when the same has not been
independently challenged by the respondents."
4. Learned counsel for the respondents has submitted that against
the order passed in the case of Pioneer Society for Professional Studies
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(supra) a Writ Appeal has been preferred before the Division Bench of
this Court but he fairly submits that there is no interim order has been
passed. His submission is that the judgment in both the aforesaid cases
are per incuriam since they have failed to take into consideration that the
alleged notification dated 25.01.2000 issued in exercise of powers
conferred Section 132(6)(o) of the Act, 1956 and Section 127 (6) (o) of
MP Municipalities Act, 1961 is in fact not a notification but is merely an
order. No power has been vested upon the State Government under the
Act, 1956 to exempt any educational institution from payment of the
taxes. It is hence submitted that the judgments relied upon by the learned
counsel for the petitioner are not binding upon this Court and the matter
requires fresh consideration.
5. Having gone through the judgments passed in the case of Daya
devi Education Committee (supra) and Pioneer Society for Professional
Studies (supra) I am of the opinion that they do not warrant re-
consideration by this Court. The judgments are considered judgments
and by taking into consideration various provisions of the Act, 1956 and
the notification of the State Government the issue in hand has been
decided. Only for the reason that as per the respondents the provisions
and the notification have not been properly interpreted it cannot be said
that the judgments are per incuriam hence I am not inclined to take a
different view.
6. As a result of discussion as aforesaid, this petition is allowed
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and the demand of Urban Development Cess and Education Cess from
the petitioner is hereby set aside. The respondents shall adjust the
amounts paid by the petitioner against the demands and provide it with
an amended bill/invoice. They shall refund the excess amount paid by
the petitioner for Education Cess and Urban Development Cess to the
petitioner within a period of two months from today.
7. With the aforesaid direction, the petition stands allowed and
disposed off.
(PRANAY VERMA)
JUDGE
jyoti
