Madras High Court
St.Joseph Middle School vs The Government Of Tamil Nadu on 1 September, 2021
W.P. Nos. 8096 and 14308 of 2011
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED :01.09.2021
CORAM
THE HON'BLE MR.JUSTICE S.M.SUBRAMANIAM
W.P. Nos. 8096 and 14308 of 2011
St.Joseph Middle School
Represented by the Superintendent of Schools
Rev.Fr.John Bosco Paul,
Diocesan Educational Commission,
Mary Palace, 63
Thammannan Road, Salem - 9 ... Petitioner in
W.P. No. 8096 of 2011
St.Mary's Middle School,
Represented by the Superintendent of Schools
Rev.Fr.John Bosco Paul,
Diocesan Educational Commission,
Mary Palace, 63
Thammannan Road, Salem - 9 ... Petitioner in
W.P. No. 14308 of 2011
..vs..
1. The Government of Tamil Nadu
Represented by its Secretary,
Rural Development and Panchayat Raj Department,
Fort St.George,
Chennai - 600 009.
1
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W.P. Nos. 8096 and 14308 of 2011
2. The District Collector
Namakkal District,
Namakkal. ... 1st and 2nd Respondents
in both W.Ps'
3. The Block Development Officer (Village Panchayat)
Block Development Office,
Kabilar Malai, Paramathi Taluk,
Namakkal District - 637 201.
4. The President / Executive Authority,
Perunkurichi Panchayat,
Paramathi Taluk,
Namakkal District - 637 201. ... 3rd and 4th Respondents
in W.P. No. 8096 of 2011
5. The Block Development Officer (Village Panchayat)
Block Development Office,
Rasipuram Taluk,
Namakkal District - 637 408.
6. The President / Executive Authority,
Kakkaveri Panchayat
Rasipuram Taluk.,
Namakkal District - 637 408. ... 3rd and 4th Respondents
in W.P. No. 14308 of 2011
Prayer in W.P. No. 8096 of 2011: Writ Petition filed under Article 226 of
the Constitution of India praying to issue a Writ of Certiorarified Mandamus
calling for the records pertaining to the impugned Demand Notice dated
23.12.2010, for the payment of Rs.10,073/- as House Tax for Door No.139
in Ward No. IV in Form I, vide Assessment No.905, on the file of the fourth
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W.P. Nos. 8096 and 14308 of 2011
respondent and quash the same, directing the respondents to grant statutory
exemption from the payment of House Tax in respect of the petitioner
Aided School, as per the notification dated 05.03.2008 vide G.O.Ms.No.38,
Rural Development and Panchayat Raj, Amending Rule 15(c) of the Tamil
Nadu Panchayats Act, 1994.
Prayer in W.P. No. 14308 of 2011: Writ Petition filed under Article 226
of the Constitution of India praying to issue a Writ of Certiorarified
Mandamus calling for the records pertaining to the impugned Demand
Notice dated 24.12.2010, for the payment of Rs.8793/- as House Tax for
Door Nos.3F in Ward No.III in Form I, vide Assessment No.2118, on the
file of the fourth respondent and quash the same, directing the respondents
to grant statutory exemption from the payment of House Tax in respect of
the petitioner Aided School, as per the notification dated 05.03.2008 vide
G.O.Ms.No.38, Rural Development and Panchayat Raj, Amending Rule
15(c) of the Tamil Nadu Panchayats Act, 1994.
For Petitioners
in both W.Ps' : Dr.FR.Xavier Arulraj
Senior Counsel
Assisted by Mrs.A.Arulmary
For Respondents
in both W.Ps' : Mr.V.Veluchamy
Government Advocate for R1to R3
Mr.R.Ravichandran for R4
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W.P. Nos. 8096 and 14308 of 2011
COMMON ORDER
The Writ Petitions on hand are filed to quash the demand notice dated
23.12.2010 and 24.12.2010 for payment of Rs.10,073/- and Rs.8793/- as
house tax for the premises owned by the petitioners and further direction is
sought for to grant statutory exemption from payment of house tax in
respect of the petitioners aided Schools as per the notification dated
05.03.2008, vide G.O.Ms.No.38 Rural Development and Panchayat Raj
Department, amending Rule 15(c) of the Tamil Nadu Panchayats Act, 1994.
2. The petitioner in W.P. No. 8096 of 2011 is St.Joseph Middle
School is an aided Tamil Medium Middle School, managed by the Salem
Diocese Society. It is a registered society under the Societies Registration
Act. The petitioner is running the school with an object of rendering
educational service to the people in that locality. The school is situated in a
total extent of 1 acre of land and the School has a two storied pucca
building constructed and has a total built-in area of 2,516.81 sq.ft. in the
ground floor and 2,516.81 sq.ft in the first floor. That apart, there is a tiled
roof building of an extent of built-in area of 1,313.25 sq.ft. Thus, the entire
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W.P. Nos. 8096 and 14308 of 2011
campus located in the fourth respondent / Panchayat has a total built-in area
of 6,346.87 sq.ft in respect of the petitioner's School.
3. The petitioner in W.P. No. 14308 of 2011 is St.Mary's Middle
School is an aided Tamil Medium Middle School, managed by the Salem
Diocese Society. It is a registered society under the Societies Registration
Act. The petitioner is running the school with an object of rendering
educational service to the people in that locality. The school is situated in a
total extent of 0.92 acre of land and the School has a two storied pucca
building constructed and has a total built-in area of 7,353 sq.ft.
4. The learned Senior counsel appearing on behalf of the petitioners
mainly contended that an amendment was brought in by the Government of
Tamil Nadu amending Rule 15(1)(c) of the Tamil Nadu Village Panchayats
(Assessments and Collection of Taxes) Rules, 1999. The amendment was
notified in the Tamil Nadu Government Gazette on 05.03.2008.
Accordingly, the Rule 15 is held as follows:
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W.P. Nos. 8096 and 14308 of 2011
"In the said Rules, in Rule 15:-
(1) for clause (c), the following clause shall be
substituted, namely:-
"(c) buildings used for educational purposes
including hostels and libraries run by the Government or
local bodies and institutions aided by the Government
and public buildings used for charitable purpose of
sheltering the destitutes or animals;";
(2) in the first proviso, for the expression "clauses
(a) and (c)", the expression "clause (a)" shall be
substituted;
3. after the second proviso, the following proviso
shall be inserted, namely:-
"Provided also that the buildings used for
educational purposes by Government - aided institutions,
for conducting self-financing unaided courses shall be
subject to levy of house tax":
5. Relying on the said amendment, the learned Senior counsel
reiterated that the aided Schools are exempted from payment of house tax
and therefore, the petitioners being aided Schools, the impugned demand
notices issued is in violation of the amended Rules 15 of the Tamil Nadu
village Panchayats (Assessment and collection of Taxes) Rules. An
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W.P. Nos. 8096 and 14308 of 2011
exemption is granted for the aided Schools and the general exemption is
contemplated under section 176 of the Tamil Nadu Panchayats Act is also to
be read along with the Rules and accordingly, the petitioners are entitled for
an exemption from payment of house tax and thus, the impugned demand
notices are to be set aside. The petitioners are not conducting any
self-financing unaided courses and they are aided middle Schools and thus,
fall under the exemption class. As per the amended rules, the petitioners are
entitled for an exemption from payment of house tax.
6. The learned Senior Counsel for the petitioners made a submission
that the Hon'ble Full Bench has considered the pre-amended rules.
However, the principles laid down is applicable to the amended rules also as
even in respect of the pre-amended rules. The Hon'ble Full Bench held that
the word " Shall" used in Rule 15 has to be read as "may" to give effect to
the said rule of exemption. However, this Court has also considered the
scope of Section 176 of the Tamil Nadu Village Panchayats Act for grant of
exemption. Thus, the principles laid down by the Hon'ble Full Bench is to
be applied for the purpose of considering the present Writ Petitions.
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W.P. Nos. 8096 and 14308 of 2011
7. The learned counsel for the fourth respondent / Panchayat objected
the said contentions raised on behalf of the writ petitioners by stating that
the issue relating to payment of house tax is no more res integra and the
Hon'ble Full Bench of the Madras High Court elaborately considered the
provisions of the Act and Rules and answered the reference made regarding
the exemption to be granted from payment of house tax. The Hon'ble Full
Bench in the case of The president, K.Vellakulam Panchayat , Kallikudi
Chatram, Madurai District V. Kamaraj College of Engineering and
Technology reported in 2009 (5) CTC 289 considered the scope of
exemption to be granted under Rule 15 of the Tamil Nadu Village
Panchayats (Assessments and Collection of Taxes) Rules as follows:
“17. We have already noticed that Rule 15 is a
subordinate legislation which cannot over ride the
substantive provisions of the Act such as Sections 171(1),
172 and 176. Section 171(1) mandates the Village
Panchayat to levy house tax on all the houses of the
village panchayat. The mandate is also clear from
section 172, wherein the basis of levy of house tax has
been prescribed. There is a prohibition from grant of
exemption of surcharge or tax under section 176 except
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W.P. Nos. 8096 and 14308 of 2011
in accordance with the rules. Therefore, if rule 15 is read
with the aforesaid Sections 171, 172 and 176, it is to be
held that under Rule 15 it is not mandatory to grant
exemption from house tax, but is an enabling provision
allowing the village panchayat to grant exemption to a
class of buildings as specified therein, if it so chooses.
Rule 15 cannot be held to be mandatory to exempt a
class of buildings from payment of house tax, which
otherwise will run counter to sections 171, 172 and 176
of the Act and may render Rule 15 ultra vires. Therefore,
the word "shall" used in Rule 15 has to be read as "may"
to give effect to the said rule of exemption.
18. We, accordingly, hold that the exemption
prescribed under Rule 15 is not mandatory and is an
enabling provision empowering the Village Panchayat or
Panchayat Union to grant exemption to a class of
buildings as specified therein. The corollary is that it is
open for the Village Panchayat or Panchayat union not
to grant such exemption in favour of one or other class of
such buildings. The court cannot force the panchayat to
exercise its discretionary power to grant exemption to
one or other class of buildings in absence of any decision
taken by the village panchayat or Panchayat Union to
grant such exemption. Once a village panchayat or
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W.P. Nos. 8096 and 14308 of 2011
Panchayat Union takes a decision to grant exemption in
favour of one or other class of buildings, only in that
case no discrimination can be made between two
similarly situated persons and no order can be passed in
an arbitrary manner.
Learned single judge, in the present case and the
Division Bench in Sriram Educational Trust (Supra)
having failed to notice the aforesaid aspect, we hold that
the Division Bench in Sriram Educational Trust (Supra)
has not laid the correct law.”
8. In the case of Vikram College of Engineering, the Hon'ble Supreme
Court also directed the College to pay the property tax. The learned Single
Judge of the Madras High Court in a batch of Writ Petitions held as follows:
“8. In the light of the above, the petitioner
institutions are at liberty to challenge the increase of
property tax by availing remedies available under the
provisions of the Act and this can be done by the
petitioners without prejudice to the rights in the pending
writ petitions as well as appeals, therein the larger issue
with regard to levy of property tax is put to challenge. In
the light of the above, the respondents are directed to issue
a revised demand giving break-up details. The above
direction shall be complied with by the respondent-
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W.P. Nos. 8096 and 14308 of 2011
Panchayats, within a period of four weeks from the date of
receipt of a copy of this order. It is needless to say that the
petitioners should be granted reasonable time to comply
with the revised demand of property tax. With the above
direction, these writ petitions stand disposed of. There is
no order as to costs. Consequently, connected
miscellaneous petitions are closed.
In the light of the above, the petitioners are directed
to pay the property tax with effect from 05.03.2008 and
continue to remit the same till the writ petitions are heard
and disposed of. With regard to surcharge passed, the
same shall be paid pursuant to the demand, which shall be
raised by the third respondent in terms of the direction
issued in Kaavery Educational Trust(Supra).”
9. It is brought to the notice of this court that similar Writ Petitions
are pending for hearing either before the learned Single Judge or before the
Hon'ble Division Bench. However, this court is of an opinion that mere
pendency of such Writ Petitions cannot be a bar for deciding the present
Writ Petitions as the Hon'ble Full Bench of this court interpreted the
exemption class under the provisions of the Tamil Nadu Village Panchayats
Act and the relevant rules for the purpose of demand of house tax by the
Panchayat. The judicial Presidents to be followed in the order of hierarchy
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W.P. Nos. 8096 and 14308 of 2011
is now settled by the Constitutional Bench of the Hon'ble Supreme Court of
India in the case of National Insurance Company v. Pranay Sethi and
others reported in 2017 (2) TNMAC 609 (SC). Accordingly, once the
Hon'ble Full Bench of this High Court decided an issue, then the connected
matters need not be kept pending unnecessarily and judicial discipline
requires that the judgment of the Hon'ble Full Bench and the principles laid
down are to be followed for the purpose of deciding the cases.
10. Let us now look into Section 176 of the Tamil Nadu Panchayats
Act, 1994 which enumerates exemption. Accordingly "no exemption from
the payment of any surcharge or tax specified in Section 171 shall be
granted by Village Panchayat except in accordance with such rules as may
be prescribed; provided that in any particular case, such exemption may be
granted with the previous sanction of the Government”. The very exemption
provision itself indicates that exemption may be granted in accordance with
the rules and in any particular case also, such exemption may be granted
with the previous sanction of the Government. It is to be noted that, the
language employed in section 176 is "may" when the legislative intention
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unambiguously clarifies that the Village Panchayat may grant exemption by
the previous sanction of the Government, then a discretion is granted to the
Village Panchayat either to grant exemption or to demand house tax as the
case may be.
11. However, once a decision under section 176 of the Act is taken,
then such decision is to be followed consistently and in an uniform manner
without causing any discrimination amongst the similarly placed persons in
the particular Panchayat. Consistency and uniformity and
non- discrimination is the constitutional principles. Thus, a decision is taken
to collect the tax or to grant exemption must be taken judiciously and
without causing any discrimination amongst the similarly placed persons.
This being the principles to be followed in the matter of grant of exemption
with reference to Section 176 of the Tamil Nadu Panchayats Act, the
respondents are bound to look into the allegations of discrimination as
raised by the petitioners and rectify the discrimination or inconsistency if
any by initiating appropriate action. Generally, exemption can never be
claimed as a matter of right. Exemptions are to be granted strictly in
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W.P. Nos. 8096 and 14308 of 2011
accordance with the provisions of the Act and Rules. The collection of
property tax is a Revenue for the development of the Village Panchayat. The
Village Panchayat are depending on such property tax for the purpose of
providing basic amenities and infrastructure facilities to the people residing
in the Villages. Thus, the importance of property tax in a Village Panchayat
at no circumstances be undermined and such collection of tax is
constitutionally recognized under Article 243 H of the Indian Constitution
which confers power to impose taxes by, and funds of, the Panchayats.
Accordingly, the legislature of a State may, by law, authorise a Panchayat to
levy, collect and appropriate such taxes, duties, tolls and fees in accordance
with such procedure and subject to such limits. Thus, the collection of tax
by Village Panchayat is of constitutional importance, as from and out of
such taxes, basic amenities and facilities including public roads, street
lights, water facilities etc., are provided by the Village Panchayats for the
benefit of the people. All institutions like that of the petitioners in Village
Panchayats are also enjoying such basic amenities and facilities. Thus, the
Village Panchayats are expected to be cautious in granting exemptions and
such exemptions are to be granted for deserving and in a restricted manner
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W.P. Nos. 8096 and 14308 of 2011
so as to ensure that the developmental activities in the Village Panchayats
are not parallelized.
12. The rules are to be read in consonance with section 176 of the
Tamil Nadu Panchayats Act as considered earlier. Exemption contemplated
under section 176 of the Act is discretionary and not mandatory as the
language employed is "may" and in any particular case exemption may be
granted with the previous sanction of the Government. Therefore, the
Village Panchayat has to take a decision in this aspect by exercising its
discretionary power and even if such decision is taken to grant exemption
under Section 176, then previous sanction of the Government is also
required for implementing the benefit of exemption. There is a check and
balance contemplated under Section 176 of the Act in order to avoid any
abuse of power of exemption by any authority of the Village Panchayat.
Under these circumstances, no person can claim exemption as a matter of
legal right.
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W.P. Nos. 8096 and 14308 of 2011
13. In respect of Rule 15, the Hon'ble Full Bench of this court
categorically held that Rule 15 is not mandatory to grant exemption from
house tax, but it is an enabling provision allowing the Village Panchayat to
grant exemption to a class of buildings as specified therein, if it so chooses.
Rule 15 cannot be held to be mandatory to exempt a class of buildings from
payment of house tax, which otherwise will run counter to Sections 171,
172 and 176 of the Act and may render Rule 15 ultra vires. Therefore, the
word "shall" used in Rule 15 has to be read as "may" to give effect to the
said rule for exemption. In this aspect, the Hon'ble Full Bench has taken
note of the fact that section 176 states that the Village Panchayat may grant
exemption that being the tenour of the Act. The rule cannot supersede the
powers of discretion conferred to the Village Panchayat under section 176
of the Act. In other words, the rule cannot be read in consistent with the
main provisions contemplated under the Act. Taking note of these facts, the
Hon'ble Full Bench has interpreted Rule 15 of the said Rules and further
held in Para No.18 that the exemption prescribed under Rule 15 is not
mandatory. The Court cannot force the Panchayat to exercise its
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W.P. Nos. 8096 and 14308 of 2011
discretionary power to grant exemption to one or other class of buildings in
absence of any decision taken by the Village Panchayat or Panchayat Union
to grant such exemption. Importantly, the Hon'ble Full Bench made an
observation that once a Village Panchayat or Panchayat Union takes a
decision to grant exemption in favour of one or other class of buildings,
only in that case no discrimination can be made between two similarly
situated persons and no order can be passed in an arbitrary manner. The
Hon'ble Full Bench is also reiterated that granting exemption is the
discretionary power vested with the Village Panchayat. However, such
decision if any taken must be implemented uniformly and without causing
any discrimination amongst the similarly placed persons.
14. This being the factum established as well as the principles
reiterated with reference to the provisions of the Tamil Nadu Village
Panchayats (Assessments and Collection of Taxes) Rules, 1999, this court is
of an opinion that the petitioners cannot seek any exemption as a matter of
right and there is no infirmity as such in respect of the demand of notice
issued in the case of the petitioners. The petitioners are directed to settle the
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W.P. Nos. 8096 and 14308 of 2011
arrears of property tax within a period of eight weeks from the date of
receipt of a copy of this order.
15. Accordingly, the Writ Petitions stand dismissed. However, there
shall be no order as to costs.
01.09.2021
Index:Yes
Speaking order
vji / nti
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W.P. Nos. 8096 and 14308 of 2011
To
1. The Secretary,
The Government of Tamil Nadu,
Rural Development and Panchayat Raj Department,
Fort St.George,
Chennai - 600 009.
2. The District Collector
Namakkal District,
Namakkal.
3. The Block Development Officer (Village Panchayat)
Block Development Office,
Kabilar Malai, Paramathi Taluk,
Namakkal District - 637 201.
4. The President / Executive Authority,
Perunkurichi Panchayat,
Paramathi Taluk,
Namakkal District - 637 201.
5. The Block Development Officer (Village Panchayat)
Block Development Office,
Rasipuram Taluk,
Namakkal District - 637 408.
6. The President / Executive Authority,
Kakkaveri Panchayat
Rasipuram Taluk.,
Namakkal District - 637 408.
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W.P. Nos. 8096 and 14308 of 2011
S.M.SUBRAMANIAM J.
vji / nti
W.P. Nos. 8096 and 14308 of 2011
01.09.2021
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