Madras High Court
Vetri Vikaas Girls Higher vs State Of Tamil Nadu on 10 August, 2021
WP Nos.14466 & 14467 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 10.08.2021
CORAM:
THE HON'BLE MR. JUSTICE S.M.SUBRAMANIAM
WP Nos.14466 & 14467 of 2015
and MP No.2+2 and 3+3 of 2015
1. Vetri Vikaas Girls Higher
Secondary School, Keeranoor,
Rasipuram Taluk, Namakkal District,
Rep. By its Secretary,
C.Balasubiramanian. ... Petitioner in W.P.No.14466/15
2. Vetri Vikaas Boys Higher
Secondary School, Keeranoor,
Rasipuram Taluk, Namakkal District,
Rep. By its Secretary,
C.Balasubiramanian. ... Petitioner in W.P.No.14467/15
Vs
1. State of Tamil Nadu,
Rep. By its Secretary to Government,
Rural Development Department,
Fort St. George, Chennai – 600 009.
2. The President,
Thottiyavalasu Panchayat,
Rasipuram Taluk,
Namakkal District.
3. The Block Development Officer,
(Village Panchayat),
Vennandhur,
Namakkal District. ... Respondents in both WPs.
https://www.mhc.tn.gov.in/judis/
WP Nos.14466 & 14467 of 2015
PRAYER in WP No.14466 of 2015: This Writ Petition is filed under
Article 226 of the Constitution of India, praying for issuance of Writ of
Certiorari, calling for the records of the 2nd respondent issued in his
proceedings comprised in Na.Ka.No.0001/2015 dated 21.4.2015 and
quash the same.
PRAYER in WP No.14467 of 2015: This Writ Petition is filed under
Article 226 of the Constitution of India, praying for issuance of Writ of
Certiorari, calling for the records of the 2nd respondent issued in his
proceedings comprised in Na.Ka.No.0001/2015 dated 21.4.2015 and
quash the same.
For Petitioners : Mr.Maikandan
in both WPs. for Mr.V.Vedachalam
For Respondents : Mr.V.Veluchamy (for R1)
in both WPs. Government Advocate
Mr.M.Digvijaya Pandian (for R2 & R3)
COMMON ORDER
The assessment of Property Tax and demand notices to pay the
Property Tax, issued by the 2nd respondent in proceedings dated
21.04.2015, in respect of petitioner schools viz., Vetri Vikaas Girls
Higher Secondary School and Vetri Vikaas Boys Higher Secondary
School, are under challenge in these writ petitions.
https://www.mhc.tn.gov.in/judis/
WP Nos.14466 & 14467 of 2015
2. The petitioner institution was formed by Association of persons
in order to impart education to the rural students in and around the area
of Namakkal District. The 2nd respondent served the notices dated
27.01.2012 calling upon the petitioners to pay Property Tax and the said
notices were challenged by the petitioners in WP Nos.12273 & 12274 of
2012 and the said writ petitions were disposed of on 18.03.2015,
directing the 2nd respondent, to provide an opportunity to the writ
petitioners to submit their objections, regarding the demand notices.
Pursuant to the orders passed by this Court, the petitioners submitted
their explanation/objections regarding the demand of property tax in
respect to the buildings used for educational purposes. However, the
objections submitted by the petitioners were not considered and again the
property assessment orders were passed raising the demand. Thus, the
petitioners are constrained to move the present writ petitions.
3. Learned counsel appearing on behalf of the writ petitioners
mainly contended that the educational institutions are exempted under
the provisions of the Tamil Nadu Panchayats Act, 1994. Since, the
educational institutions not being commercial in nature, the authorities
https://www.mhc.tn.gov.in/judis/
WP Nos.14466 & 14467 of 2015
cannot levy Property Tax and therefore, the very assessment of Property
tax and demand made consequently, are untenable.
4. The learned counsel for the petitioners relied on the judgment of
the Hon'ble Divison Bench of this Court dated 13.09.2019 passed in WP
No.18008 of 2018 etc. The learned counsel relied on paragraph No.45,
which reads as follows:
“45. In view of the above, challenge to Act 6 of 2018 i.e.
Tamil Nadu Municipality Laws (Second Amendment) Act, 2018,
cannot be upheld and that the same is rejected. Writ Petitions are
dismissed. No Costs.”
It is contended that as per the said judgment, exemptions are to be
granted in favour of the writ petitioners, from payment of Property Tax.
5. The learned counsel appearing for the petitioners further relied
on the judgment of the Hon'ble Supreme Court in the case of
Government of Kerala & Anr. Vs. Mother Superior Adoration Convent
dated 01.03.2021 passed in Civil Appeal No.202 of 2012. Following
portion of the said judgment is relied upon .
“7.....Therefore, necessarily, the students have to depend on
hostel accommodation to pursue their studies. Colleges will not get
students if they do not provide hostel accommodation to students near
https://www.mhc.tn.gov.in/judis/
WP Nos.14466 & 14467 of 2015
to the College. Therefore, hostel buildings are constructed by
educational institutions to attract students to their institutions. Many
educational institutions provide only basic facilities like building,
electricity and water connections for hostels and in fact, students are
running mess on sharing basis. So much so, the States contention that
hostels attached to educational institutions are commercial ventures
intended to make profit, in our view, is unacceptable. In order to
consider whether hostel provided by an educational institution is for
educational purpose or not, we have to consider the consequences if
such educational institution does not have hostel facility to provide
accommodation to its students.”
Paragraph No.25 of the judgment relied upon reads as under:
“24. This being the case, it is obvious that the beneficial purpose
of the exemption contained in Section 3(1)(b) must be given full effect
to, the line of authority being applicable to the facts of these cases being
the line of authority which deals with beneficial exemptions as opposed
to exemptions generally in tax statutes. This being the case, a literal
formalistic interpretation of the statute at hand is to be eschewed. We
must first ask ourselves what is the object sought to be achieved by the
provision, and construe the statute in accord with such object. And on
the assumption that any ambiguity arises in such construction, such
ambiguity must be in favour of that which is exempted. Consequently,
for the reasons given by us, we agree with the conclusions reached by
the impugned judgments of the Division Bench and the Full Bench.”
6. It is contended that the Hon'ble Supreme Court of India also
ruled that the buildings utilised for educational purposes and for the
purpose of the students studying in institutions, are to be exempted from
https://www.mhc.tn.gov.in/judis/
WP Nos.14466 & 14467 of 2015
payment of Property tax. Thus, the present impugned orders are liable to
be set aside.
7. The learned counsel appearing on behalf of the respondents 2
and 3 disputed the said contentions by stating that the issue raised in the
present writ petitions, is no longer res integra. The Hon'ble Division
Bench of this Court has decided the issue by considering the Amendment
Act and based on the judgment, every educational institution are paying
the Property Tax after the judgment of the Hon'ble Divison Bench. A
learned Single Judge also considered the issue and passed orders in batch
of writ petitions on 01.08.2018 in WP Nos.5816 to 5818 & 5923 to 5925
of 2011 and the relevant paragraphs are extracted hereunder
“2. The prayer sought for in these writ petitions was considered
by the First Bench in Writ Appeal Nos.2152 of 2011 Batch, dated
17.06.2017 [Maharaja College of Arts and Science, Coimbatore v. The
State of Tamil Nadu, Rep. by its Secretary to Govt. Rural Development
and Panchyat Raj Department, Chennai - 9 and others] and all the Writ
Appeals were dismissed. Subsequently, some of the writ petitioners
have filed appeals before the Honb'le Supreme Court wherein an
interim order has been granted and the appeals have been entertained
subject to the petitioners' depositing with the Panchayats concerned the
entire arrears of property tax up-to-date along with an additional
amount of Rs.50,000/- as compensation.
3...
https://www.mhc.tn.gov.in/judis/
WP Nos.14466 & 14467 of 2015
4...
5. Accordingly, the Writ petitioners are directed to clear the
entire arrears of property tax along with Rs.50,000/- as compensation
payable to Panchayat, within eight weeks from the date of receipt of a
copy of this order. If this condition is complied with, the
petitioners/respondents shall await the decision of the Hon'ble Supreme
Court and take appropriate action is accordance with the decision of the
Hon'ble Supreme Court made in S.L.P.No.7672/2012 etc. batch.
However, if the petitioners fail to comply with the above condition
within the time stipulated, the writ petitions would stand dismissed,
following the decision of the Hon'ble Division Bench in
W.A.No.2152/2011 etc. batch, dated 17.06.2017.”
8. The learned counsel appearing for the respondents 2 and 3
reiterated that pursuant to the Amendment, the respondent-Panchayat is
bound to collect Property Tax in order to provide public services. This
being the position, the writ petitions have to be dismissed.
9. Considering the arguments, this Court is of the considered view
that as far as the educational institutions are concerned, the Property Tax
assessment made and the consequential demand notices issued, were
challenged and the claim of the educational institutions were rejected by
the Courts. As of now, the educational institutions are liable to pay
Property Tax as applicable to the Panchayats.
https://www.mhc.tn.gov.in/judis/
WP Nos.14466 & 14467 of 2015
10. As far as the judgment relied on behalf of the petitioners is
concerned, the Hon'ble Division bench in its judgment dated 13.09.2019
held as follows in paragraph Nos.45 and 46.
“45. In view of the above, challenge to Act 6 of 2018 i.e.,
Tamil Nadu Municipality Laws (Second Amendment) Act, 2018
cannot be upheld and that the same is rejected. Writ petitions are
dismissed. No Costs.
46. This Court is not going into the demanded quantum of tax
in the notices issued by various Corporations on various schools.
Competence in demanding tax is upheld. It is open to the institutions
to file appropriate petitions challenging the demand notices, in
accordance with law. Interim order, restraining the municipality
authorities from taking any coercive steps, stands vacated.
Consequently, other connected writ miscellaneous petitions are
closed.”
Paragraph No.45 of the judgment has been erroneously interpreted by the
learned counsel for the petitioners as if the Hon'ble Division Bench held
that the Tamil Nadu Municipality Laws (Second Amendment) Act,
cannot be upheld. That is not the observation made by the Hon'ble
Division Bench. In fact, Paragraph No.45 clarifies that “in view of the
above, challenge to Act 6 of 2018, cannot be upheld”.
https://www.mhc.tn.gov.in/judis/
WP Nos.14466 & 14467 of 2015
11. Therefore, 'the challenge cannot be upheld', is the findings of
the Hon'ble Division Bench and in paragraph No.46, the said decision is
clarified by the Hon'ble Division bench stating that 'Competence in
demanding tax is upheld'. Therefore, the Amendment Act was upheld
by the Hon'ble Division Bench and the competence of Panchayat in
demanding the tax, is also upheld.
12. Based on the said judgment, the Hon'ble Single Judges have
also passed other judgments following the same and the Property Tax
assessment orders are passed in respect of other institutions and the
Panchayats are collecting the tax as applicable.
13. Regarding the judgment of the Hon'ble Supreme Court cited by
the petitioners, is concerned, the case filed before the Hon'ble Supreme
Court of India is related to the Kerala Building Tax Act, 1975. The
question considered in paragraph No.7 of the judgment is that whether
the hostel facility to students provided by other educational institutions,
which are not compulsorily required under the educational regulations
to provide accommodation to students, is an educational purpose
https://www.mhc.tn.gov.in/judis/
WP Nos.14466 & 14467 of 2015
qualifying the hostel buildings for tax exemption?. Therefore, the said
facts and circumstances could not be applied for the present writ
petitions on hand.
14. In view of the fact that the issue regarding assessment of
Property Tax and the demand of Property Tax is upheld, the petitioners
are liable to pay Property Tax as demanded . As far as the competence of
the Panchayat is concerned, it is upheld and the respondents are
empowered to assess the Property Tax and issue demand notices and
collect the property Tax from the educational institutions.
15. The learned counsel for the respondents 2 and 3 brought to the
notice of this Court that the petitioner institution has not paid the
Property Tax for many years and there are huge arrears of tax.
16. In this regard, the petitioners are bound to pay the Property Tax
arrears also, failing which, the respondents are bound to recover the
same by following the procedures, as contemplated under law.
https://www.mhc.tn.gov.in/judis/
WP Nos.14466 & 14467 of 2015
17. With these observations, the writ petitions stand dismissed. No
Costs. Consequently, the connected Miscellaneous Petitions are closed.
10.08.2021
Speaking/Non-speaking order
Index: Yes/No
Internet: Yes
ars
To
1. The Secretary to Government,
State of Tamil Nadu,
Rural Development Department,
Fort St. George, Chennai – 600 009.
2. The President,
Thottiyavalasu Panchayat,
Rasipuram Taluk,
Namakkal District.
3. The Block Development Officer,
(Village Panchayat),
Vennandhur,
Namakkal District.
https://www.mhc.tn.gov.in/judis/
WP Nos.14466 & 14467 of 2015
S.M.SUBRAMANIAM, J.,
ars
WP Nos.14466 & 14467 of 2015
10.08.2021
https://www.mhc.tn.gov.in/judis/
