Nitin Shiksha Samiti and Ors. v. Jaipur Municipal Corp and Ors.

Rajasthan HC19 Oct 2016CW/9150/2010

Case brief

AI extract

What is this about?

This common order disposed of multiple writ petitions challenging tax demands against educational and charitable institutions. The court held that issues regarding charitable status and income generation require factual findings unavailable in a writ proceeding. The matter was remitted to the appellate authority to determine eligibility for exemption under Section 107 of the Rajasthan Municipaliti

What did the court decide?

Petitions disposed by directing petitioners to prefer an appeal before the appellate authority with pre-deposit relaxation; execution of demands stayed pending appellate decision.

Nitin Shiksha Samiti and Ors. Vs Jaipur Municipal Corp… — Property and Title | Rajasthan HC (2016)

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IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN

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JAIPUR BENCH, JAIPUR

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ORDER

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1.SB Civil Writ Petition No.3656/2005

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1.Roman Catholic Diocesan Education Society through its Secretary, Fr. Aubert Carvalho s/o Mr. A.Z. Carvalho, R/o Bishop's House, Kaiserganj, Ajmer, at present Malviya Nagar, Jaipur.

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2.St. Anselm's Pink City School, Malviya Nagar,Jaipur through its Principal

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.....Petitioners

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Versus

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1.Commissioner, Jaipur Municipal Corporation, Jaipur.

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2.Commissioner, House Tax, Jaipur Municipal Corporation, Jaipur.

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3.House Tax Assessing Authority, Jaipur Municipal Corporation, Moti Dungari Zone, Jaipur.

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4.Revenue Officer, Moti Dungari Zone, Jaipur Municipal

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Corporation, Jaipur.

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5.State of Rajasthan through the Secretary, Department of Local Self Govt., Secretariat, Jaipur.

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6.The Bank of Rajasthan Ltd., Malviya Nagar, Jaipur through its Branch Manager.

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..Non Petitioners

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2.S.B. CIVIL WRIT PETITION NO. 11037/2009

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1.National Engineering Industries Ltd., Khatipura Road, Jaipur, through its authorized signatory, Sh. Suresh Agrawal, S/o Sh. R.S.

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Agrawal, aged about 46 years.

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Rukmani Birla Educational Institute, Shanti Nagar, Gopal Pura Bye Pass, Jaipur, through its finance officer and authorized signatory, Sh. Sajjan Kumar Agarwal, S/o Banrasi Lal Shah, aged about 50 years, resident of A-23A, Shastri Nagar, Main Road, Jaipur

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Petitioners

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Versus

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State of Rajasthan, through its Secretary, Finance Department, Government Secretariat, Jaipur

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Jaipur Municipal Corporation, through its chairman,

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Government of Rajasthan, Jaipur.

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Respondents

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3.S.B. CIVIL WRIT PETITION NO. 7792/2013

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Akling Charity Trust, having its head office at 12/1, Alipore Park Road, Kolkotta, through its authorized representative Shri Sanwarmal Agrwal, S/o Shri Bodulal Agarwal, aged about 50 years, R/o II CF3, Satluj Apartment, Sector 2, Vidhyadhar Nagar, Jaipur-302039

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Petitioner

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Versus

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1.State of Rajasthan, through its Secretary, Finance Department, Secretariat, Jaipur.

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Jaipur Municipal Corporation, through its chairman, having its office at Pandit Deendayal Upadhaya Bhawan, Lal Kothi, Tonk Road, Jaipur.

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Respondents

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4.S.B. CIVIL WRIT PETITION NO. 5061/2013

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National Engineering Industries Ltd., Khatipura Road, Jaipur, through its authorized signatory, Shri. Suresh Agrawal, S/o Shri. R.S. Agrawal, aged about 50 years.

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Rukmani Birla Educational Institute, Shanti Nagar, Gopal pura Bye Pass, Jaipur, through its finance officer and authorized signatory, Shri. Sajjan Kumar Agarwal, S/o Late Shri. Banarsi Lal Shah, aged about 55 years, resident of A-23A, Shastri Nagar Main Road, Near Peetal Factory, Jaipur.

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Petitioners

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Versus

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State of Rajasthan, through its Secretary, Finance Department, Secretariat, Jaipur.

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Jaipur Municipal Corporation, through its Chairman, having its office at Pandit Deendayal Upadhaya Bhawan, Lal Kothi, Tonk Road, Jaipur.

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Respondents

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5.S.B. CIVIL WRIT PETITION NO. 4100/2005

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Angelite Welfare Society, a society registered under the Rajasthan Societies Registration Act, 1958, C/o St. Angela Sophia Sr. Higher Secondary School, Outside Ghat Gate, Jaipur through its Secretary, Sister Jennet.

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St. Angela Sophia Sr. Higher Secondary School, Outside Ghat Gate, Jaipur through its Superior, Sister Jennet.

Petitioners

Versus

The State of Rajasthan through the Secretary, Department of Local Self Government, Govt. of Rajasthan, Secretariat, Jaipur.

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The Director, Local Bodies, Rajasthan, Behind High Court Building, Jaipur.

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Municipal Corporation, Jaipur through its Mayor.

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Assessor (House Tax) Moti Doongri Zone, Municipal

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Corporation, Outside Ghat Gate, Jaipur.

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Commissioner, Moti Doongri Zone, Municipal Corporation, outside Ghat Gate, Jaipur.

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Respondents

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6.S.B. CIVIL WRIT PETITION NO. 11038/2009

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National Engineering Industries Ltd., Khatipura Road, Jaipur, through its authorized signatory, Sh. Suresh Agrawal, S/o Sh. R/S. Agrawal, aged about 46 years.

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Rukmani Birla Hospital & Research Institute, Maliyon Ki Dhani, Gopal Pura Puliya ke Neeche, Jaipur, having its Registered Office at 78, Syyed Amir Ali Avenue, Kolkatta- 700019, through its

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Manager, Research & Development and authorized Signatory, Sh. Rajendra Gupta, S/o Sh. O.P. Gupta, aged about 42 years, resident of G-95, MSS Colony, Shastri Nagar, Jaipur-302016.

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Petitioners

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Versus

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State of Rajasthan, through its Secretary, Finance Department,

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Government Secretariat, Jaipur.

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Jaipur Municipal Corporation, through its Chairman,

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Government of Rajasthan, Jaipur.

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Respondents

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7.S.B. CIVIL WRIT PETITION NO. 9150/2010

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Nitin Shiksha Samiti, Plot No. 970, Barkat Nagar, Jaipur.

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Nitin Senior Secondary School, Plot No. 804, B.C.D., Barkat

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Nagar, Jaipur.

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Nitin Girls Secondary School, Plot No. 996 & 997, Barkat Nagar, Jaipur.

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All through its Secretary, Mr. Kailash Chand Sharma.

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PETITIONERS

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Versus

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Jaipur Municipal Corporation, Jaipur through its Mayor.

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Commissioner, Jaipur Municipal Corporation, Civil Line, Zone-

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20, Ward No. 41, Jaipur.

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State of Rajasthan through the Department of Local Self-

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Government, Government of Rajasthan, Secretrait, Jaipur.

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RESPONDENTS

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8.S.B. CIVIL WRIT PETITION NO 13342/2011

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Shri Hari Ram Saboo Charitable Trust, Jaipur through its trustee S.S. Saboo, S/o Shri Jamna Dhar, aged 85 R/o D-164, Kanti chand road, Banipark, jaipur, Rajasthan.

Petitioner

Versus

The state of Rajasthan through it's Principal Secretary, Urban Development Department, Secretariat Jaipur.

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The Commissioner/ Director, Local Bodies, 22 Godam, jaipur.

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The Commissioner jaipur Municipal Corporation, Lal Kothi, Jaipur.

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The Commissioner Vidyadhar Nagar Zone, Jaipur Municipal Corporation, Science Park, Shastri Nagar, Jaipur.

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The Commissioner, Devasthan Department, Jaipur.

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Respondent

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9.S.B. CIVIL WRIT PETITION NO. 5296/2013

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National Engineering Industries Ltd. Khatipura Road, Jaipur, through its authorized signatory, Shri. Suresh Agrawal, S/o Shri. R.S. Agrawal, aged about 50 years.

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Rukmani Birla Educational Institute, Shanti Nagar, Gopal Pura Bye Pass, Jaipur, through its finance officer and authorized

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signatory, Shri. Sajjan Kumar Agarwal, S/o Late Shri. Banarsi Lal Shah, aged about 55 years, resident of A-23A, Shastri Nagar Main Road, Near Peetal Factory, Jaipur.

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Petitioners

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Versus

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State of Rajasthan, through its Secretary, Finance Department, Secretariat, Jaipur.

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Jaipur Municipal Corporation, through its Chairman, having its office at Pandit Deendayal Upadhaya Bhawan, Lal Kothi, Tonk Road, Jaipur.

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Respondents

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10.S.B. CIVIL WRIT PETITION NO. 3229/2014

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Mahavir Jaipuria Foundation C/o. Jaipuriya Vidyalaya, J.L.N. Marg, through the Principal – Pratima Sharma, W/o. Sh. Pankaj Sharma, Aged 52 Years, Jaipuria Vidhyalaya, J.L.N. Marg, Jaipur.

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PETITIONER

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Versus

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State of Rajasthan, through the Secretary, Department of Local Self Government, Secretariat, Jaipur.

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Municipal Corporation, Tonk Road, Jaipur through its Mayor.

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The Commissioner, Mansarovar Zone, Municipal Corporation, Jaipur.

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RESPONDENTS

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11.S.B. Civil Writ Petition No.: 8218/2014

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BHARTIYA VIDYA BHAWAN VIDYASHRAM SCHOOL, managed by Bhartiya Vidya Bhawan, K. M. Munshi Marg, Opp. Dainik Bhaskar, Jaipur through the Honorary Director cum Member Secretary (Advisory Committee) Sh. R.C. Jain.

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Petitioner

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Versus

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State of Rajasthan, through Secretary Local Self Govt. State Secretariat, Bhagwan Das Road, Jaipur.

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Jaipur Nagar Nigam, through Mayor, Lal Kothi, Jaipur.

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Chief Executive Officer, jaipur Nagar Nigam, Lal Kothi, Jaipur.

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Commissioner (Revenue), Jaipur Nagar Nigam, Lal Kothi,

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Jaipur.

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Commissioner, Moti Doongri Zone, Jaipur Nagar Nigam, Near Sophia Girls School, Ghatgate, Jaipur.

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Respondents

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12.S.B. Civil Writ Petition No.: 8739/2014

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BHARTIYA VIDYA BHAWAN VIDYASHRAM SCHOOL, managed by Bhartiya Vidya Bhawan, K. M. Munshi Marg, situated in NRI Colony, Pratap Nagar, Jaipur through the Honorary Director cum Member Secretary (Advisory Committee) Sh. R.C. Jain.

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Petitioner

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Versus

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State of Rajasthan, through Secretary Local Self Govt., State Secretariat, Bhagwan Das Road, Jaipur.

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Jaipur Nagar Nigam, through Mayor, Lal Kothi, Jaipur.

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Chief Executive Officer, Jaipur Nagar Nigam, Lal Kothi, Jaipur.

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Commissioner (Revenue), Jaipur Nagar Nigam, Lal Kothi, Jaipur.

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Commissioner, Sanganer Zone, Jaipur Nagar Nigam, Near Sanganer Stadium, Sanganer, Jaipur.

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Respondents

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13.S.B.CIVIL WRIT PETITION NO. 10794/2014

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1. SAINT ANSELM NORTH CITY SCHOOL, a School run and managed by GYANDEEP EDUCATION SOCIETY, Bishop's House Ghat Gate, Jaipur through its Principal Fr. Raymond Coelho.

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Fr. Raymond Coelho s/o Salvadore Coelho, r/o Saint Anselm

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North City School Campus, Niwaru Road, Jhotwara, Jaipur

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Petitioners

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Versus

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The State of Rajasthan, through Secretary Local Self Govt, State Secretariat, Bhagwan Das Road, Jaipur.

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Jaipur Nagar Nigam through Mayor, Jaipur Nagar Nigam, Lal Kothi, Jaipur.

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Chief Executive Officer, Jaipur Nagar Nigam, Lal Kothi, Jaipur.

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Commissioner- Revenue, Jaipur Nagar Nigam, Lal Kothi, Jaipur.

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Commissioner, Civil Line Zone, Jaipur Nagar Nigam, Near New Vidhan Sabha, Lal Kothi, Jaipur.

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Revenue Officer, Civil Line Zone, Jaipur Nagar Nigam, Near New Vidhan Sabha, Lal Kothi, Jaipur.

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Assistant Revenue Inspector, Civil Line Zone, Jaipur Nagar Nigam, Near New Vidhan Sabha, Lal Kothi, Jaipur.

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Respondents

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14.S.B. CIVIL WRIT PETITION NO. 10678/2015

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Rukmani Birla Educational Institute, Shanti Nagar, Gopal Pura Bye Pass, Jaipur, through its finance officer and authorized

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signatory, Shri. Rajendra Gupta, S/o Shri O. P. Gupta, aged about 48 years, resident of G-95, Major Shaitan Singh Colony, Shastri Nagar, Jaipur.

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National Engineering Industries Ltd. Khatipura Road, Jaipur, through its authorized signatory, Shri. Suresh Agrawal, S/o Shri.

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R.S. Agrawal, aged about 52 years.

Petitioners

Versus

State of Rajasthan, through its Secretary, Finance, Department,

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Secretariat, Jaipur.

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Jaipur Municipal Corporation, through its Chairman, having its office at Pandit Deendayal Upadhaya Bhawan, Lal Kothi, Tonk Road, Jaipur.

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Respondents

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19.10.2016

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HON'BLE MR. JUSTICE MN BHANDARI

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Mr Anant Kasliwal Mr Vaibhav Kasliwal Mr Mahendra Singh Mr Sunil Nath Mr Manish Priyadarshi Ms Sukriti Singh Mr Archit Bohra Mr Raunak Bapna Mr Naveen Dhuwan for Mr Laxmikant Shandilya Mr RS Mehta Mr JP Gurjar Mr Ajeet Bhandari Mr Prashant Sanghi Mr Prahlad Singh – for petitioners

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Mrs Naina Saraf – for Municipal Corporation, Jaipur Mr Manoj Sharma with Mr Ram Niwas Meena Mr PS Naruka for Mr Manu Bhargava – for respondents

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BY THE COURT:

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By these writ petitions, a challenge is made to demand of tax of land and building. All the writ petitions were taken up for hearing together and are decided by this common order.

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Learned counsel submit that petitioners are exempted from tax in pursuance of section 107 of the Rajasthan Municipalities Act, 1959 (for short 'the Act of 1959'). They are using land and building for 'charitable purposes' as defined under section 107 of the Act of 1959. Ignoring the aforesaid, respondents have issued demand notice, imposing tax on land and building. Before issuing the demand, they did not even apply the procedure for assessment of tax. A complete go-bye has been given to it. The action of the respondents is thus contrary to the provisions of law hence not sustainable in the eye of law. The demand has been raised without even specifying the basis for it thus is a non-speaking order has been passed. The petitioners were not even called before assessment of tax to provide opportunity of hearing.

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Learned counsel further submit that in pursuance of section 107(5) of the Act of 1959, respondents have issued a notification on 29.8.2007. It is to exempt those governed by section 107 of the Act of 1959 and also the charitable trust even if using its property for commercial purposes. Before issuing demand notices, notification dated 29.8.2007 was also ignored. It is more so when said notification still operate after repeal of the Act of 1959. As per the Rajasthan Municipalities Act, 2009 and, more specifically, section 344 of repeal and savings, notification dated 29.8.2007, subsist.

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A further reference of another clarificatory notification

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issued by the respondents on 31.8.2015 by invoking provisions of the Act of 2009 has been given. The notification has been issued in reference to the earlier notification dated 29.8.2007 thus, by implication, State Government has taken earlier notification dated 29.8.2007 to be alive thus whatever benefit accrues from the said notification, would still survive. In view of aforesaid also, respondents were under an obligation to grant exemption to those who are covered by section 107 of the Act of 1959 and also charitable trust even if they are using its property for commercial purposes. For the reasons aforesaid also, impugned demand notices deserve to be set aside.

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Reference of judgment of this court in the bunch of writ petitions led by “Saint Patrick S Vidhya Bhawan & anr versus State of Rajasthan & ors”, SB Civil Writ Petition No.12517/2015, decided on 23.4.2016 at Principal Seat, Jodhpur has been given. In the said case, the issue has been considered in the light of the Act of 2009. The earlier notification dated 29.8.2007 as well as section 344 of the Act of 2009 were not brought to the notice of the court so as the subsequent notification dated 31.8.2015, which shows continued effect of the earlier notification dated 29.8.2007. The said judgment is otherwise per incuriam.

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Learned counsel for petitioners further submitted that alternative remedy of appeal exist but cannot be said to be

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efficacious. The petitioners fall under section 107 of the Act of 1959 and covered by the notification dated 29.8.2007 thus imposition of tax itself becomes illegal as the petitioners are exempted from tax. In view of the aforesaid, they were not required to exhaust alternative remedy.

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It is also submitted that out of many writ petitions, few have already been admitted and once the writ petition is admitted, it should not be dismissed on the ground of alternative remedy.

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The prayer is made to set aside demand notices issued by the respondents. Reference of the judgment of the Apex Court about availability of alternative remedy has also been given. In a case where the demand has been raised without applying the procedure, one cannot be non-suited on account of alternative remedy of appeal and otherwise, availability of alternative remedy does not cast absolute bar to maintain writ petition under Article 226 of the Constitution of India.

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It is lastly contended that impugned demand even suffers from violation of principles of natural justice as no opportunity of hearing was given to the petitioners thus for that reason also, impugned demand becomes illegal.

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Learned counsel for respondent-Municipal Corporation

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has vehemently opposed the arguments raised by learned counsel for petitioners. It is submitted that alternative remedy of appeal has been provided under section 139 of the Act of 1959 and now even under section 121 of the Act of 2009. The petitioners have failed to avail efficacious alternative remedy in a case where there are issues which need finding of fact. The objection regarding alternative remedy has not been raised for the sake of it but taking into consideration the controversy involved in the present petitions. In view of above, writ petitions deserve to be dismissed on the aforesaid ground.

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Reference of few judgments in regard to alternative remedy has been given. It is in the case of “Food Corporation of India versus State of Rajasthan & ors”, DB Special Appeal (Writ) No.1019/2011, decided on 21.2.2013 by the Division Bench and “Sharma East India Hospitals & Medical Research Ltd versus State of Rajasthan & ors”, SB Civil Writ Petition No.20155/2012, decided on 7.1.2013 by the Single Bench of this court.

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Learned counsel for Municipal Corporation submits that a reference of section 107 of the Act of 1959 has been given without proper interpretation. The proviso to sub-section (4) of section 107 of the Act of 1959 exclude those land and buildings, if are used for trade or business or in respect thereof rent or other income is derived. In view of the proviso to sub-section (4) of section 107 of the Act of 1959, none of the petitioners are entitled to seek exemption as they

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are earning income out of education and thereby not using the institution for charitable purposes. The charitable purpose needs advancement of poor or for their benefit thus if any of the institutions, working in the field of education or medical, can seek exemption only if when they are extending benefit to the poor person and not otherwise. The charity should not be for the sake of it but need to be in real terms. In view of aforesaid, prayer made by the petitioners deserves to be rejected.

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Learned counsel has further given reference to section 107 of the Act of 2009 to show that none of the petitioners are entitled to get benefit of exemption after the new Act. The reference of the judgment of this court in the case of Saint Patricks Vidhya Bhawan (supra) has been given where the issue raised by the petitioners has already been decided though partly against the Municipal Corporation. An appeal against the said judgment has been filed and is pending. After the Act of 2009, none of the petitioners are exempted from liability of tax towards land and building, thereby, argument in reference to the notification dated 29.8.2007 and clarificatory notification issued on 31.8.2015 are of no relevance. The earlier notification dated 29.8.2007 is not saved by section 344 of the Act of 2009, thereby, even a charitable trust is not exempted from the tax liability.

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Coming on the issue of procedure, reference of the

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notification dated 29.8.2007 has been given. It is stated that three notifications were issued by the State Government on the same date and out of those, one pertains to the procedure for determination of tax. It is to avoid confusion and discrimination for assessment of value of the property for calculation of tax. As per the procedure given therein, an assessee need to make self assessment and submit it to the Municipal Corporation. If the self assessment is found in order, demand is raised accordingly, however, if it is not assessed based on procedure given in the notification dated 29.8.2007, assessment order is passed by the Municipal Corporation. The determination of value of the property is on DLC rate, which has been taken to avoid any controversy about valuation of land and building. In case of default in making self assessment, the Municipal Corporation initiate assessment at its own and accordingly raise demand. The demand in question has been assessed by adopting the procedure given in the notification dated 29.8.2007 thus argument about violation of the procedure in the hands of the Municipal Corporation is not correct. The petitioners have not come with the case that the valuation of the land and building has not been taken on the DLC rate.

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It is submitted that argument about procedural irregularities or violation of principles of natural justice has been taken for the sake of raising objection against the demand and not for justified reasons. In view of aforesaid, impugned demands may not be interfered as has been calculated by the procedure given in the

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notification dated 29.8.2007.

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I have considered rival submissions of the parties and perused the record.

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The challenge to the notices for demand of tax is mainly in reference to section 107 of the Act of 1959 and, in few cases, even in reference to the notification dated 29.8.2007. The petitioners said to be covered by the said provision thus prayer is made to set aside demands by holding all the petitioners covered by section 107 of the Act of 1959 or the notification dated 29.8.2007.

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To appreciate the argument aforesaid, it would be relevant to quote section 107 of the Act of 1959 and the notification dated 29.8.2007 thus -

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“107. Exemptions from taxation.--(1) None of the taxes specified in Sections 104 , 105 and 106 shall be leviable by a board in respect of any property belonging to or vested in it.

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(2) None of the taxes specified in Clauses (1) and (2) of Section 104 and in Clauses (i), (iii), (iv) and (v) of Sub-section (1) of Section 105 shall be leviable in respect of any lands, buildings, goods, vehicles, conveyances, boats or animals belonging to or vested in the Central Government or the State Government:

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Provided that, so long as any such tax continues to be levied by the board on like properties of other persons, nothing in this

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Sub-section shall prevent the board from levying that tax to which, immediately before the 26th day of January, 1950, any lands, buildings, goods, vehicles, conveyances, boats or animals of the Central Government were liable, or treated as liable:

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Provided further that any land, building, goods, vehicle, conveyance, boat or animal belonging to or vested in the State Government shall be so exempt from payment of any such tax if the same is used or intended to be used solely for public purposes of profit.

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(3) XXX

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(4) The tax specified in Clause (1) of Section 104 shall not be leviable in respect of lands and buildings used solely as places of public worship or for religious or charitable purposes;

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Provided that such lands or buildings shall not be exempt from payment of the said tax if any trade or business is carried on therein or if in respect thereof rent or other income is derived, whether such rent or other income is or is not applied exclusively towards such places of public worship or towards such religious or charitable purposes.

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Explanation I: "Charitable purpose" includes relief of the poor, education and medical relief.

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Explanation II. When any portion of any land or building is exempt from payment of tax under this Sub-section such portion shall be deemed to be a separate property for the purposes of the said tax.

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(5) The State Government may, if in its opinion reasonable grounds exist for so doing, grant and define, by notification in the Official Gazette, such exemptions in exceptional cases from payment of a tax leviable under Section 104 or imposed under Section 105 or under Section 106 as it may consider necessary."

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¶227

A further reference of section 107 of the Act of 2009 has also been given and is relevant for the purpose of appreciation of arguments of both the parties, thus is quoted hereunder -

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“Section 107 - Exemption from taxation

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(1) None of the taxes specified in sections 102 and 103 shall be leviable by a Municipality in respect of any property belonging to or vested in it.

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(2) None of the taxes specified in clause (a) of sub-section (1) of section 102 and clauses (i) and (ii) of sub-section (1) of section 103 shall be leviable in respect of any lands, buildings, vehicles, conveyance and boats belonging to or vested in the Central Government or the State Government:

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Provided that, so long as any such tax continues to be levied by the Municipality on like properties of other persons, nothing in this sub-section shall prevent the Municipality from levying that tax to which, immediately before the 26th day of January, 1950, any lands, buildings, vehicles, conveyances and boats of the Central Government were liable or treated as liable;

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Provided further that any land, building, vehicle, conveyance or boat belonging to or vested in the State Government shall be so exempted from payment of any such tax, if the same is used or intended to be used solely for public purposes and not for purposes of profit.

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(3) The tax specified in clause (a) of subsection (1) of section 102 shall not be leviable in respect of lands and buildings used solely as places of public worship and duly recognized as such by the Municipality.

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(4) The State Government may, if in its opinion reasonable ground exists for doing so, grant and define by general or specific order published in the Official Gazette such exemptions from payment of a tax leviable under this Act as it may consider necessary.”

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The perusal of section 107 of the Act of 1959 reveals that exemption from tax for a land and buildings used solely as place of public worship or for religious or charitable purposes. The proviso to sub-section 4 of section 107 of the Act of 1959, however, qualifies exemptions as it is not for a land and building used for trade and business or in respect thereof rent or other income is derived even if such rent or income is not applied exclusively towards such places of public worship or religious or charitable purposes. The Explanation I defines 'charitable purpose' which includes relief to the poor, education and medical relief. It shows that if the land and building is used for poor, education or medical relief, then it would be exempted from tax but subject to the condition given in the proviso.

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All the petitioners are claiming use of land and buildings for charitable purposes i.e. either for education or medical relief. It is also stated that they are not earning out of the land and building used

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for those purposes though learned counsel for respondents have contested the issue. The perusal of the order does not show it and in the reply to the writ petitions, it is alleged that education is not provided for charitable purposes i.e. to support the poor.

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In any case, this court needs to consider the issue in reference to the provisions quoted above. The notification dated 29.8.2007 maintains the benefit given under section 107 of the Act of 1959 and further extend the benefit to other categories. It includes property owned by charitable trust even if used for commercial purposes.

¶241

It is a fact that the Act of 1959 has been repealed by the Act of 2009 but there exist a provision of repeal and savings and, in pursuance of the Act of 2009, a clarificatory notification has been issued on 31.8.2015, in reference to earlier notification dated 29.8.2007.

¶242

The fact which remains for consideration is as to whether properties involved in the present writ petitions belong to charitable trust because notification dated 29.8.2007 exempts property of charitable trust and not of a company or other organisation. It is apart from other categories. It is also whether the cases of the petitioners are covered under section 107 of the Act of 1959 because as per proviso to section 107(4) of the Act of 1959, rent or income should

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not be driven and aforesaid issue needs a finding of fact.

¶245

If a property does not belongs to a charitable trust or is not covered by section 107(4) of the Act of 1959 then it would not be entitled to exemption. In the same manner, if imposition of tax is only on the ground that education is not imparted to the poor, then also, order passed by the Municipal Corporation cannot be accepted. The Municipal Corporation was required to consider section 107 (4) in its entirety before passing the order. It is after considering the meaning of 'charitable purposes' along with the proviso. If the petitioners are falling under the proviso i.e. they are using land and building for trade or business purpose or rent and income is derived then, obviously, liable to tax, however, it is subject to the notification dated 29.8.2007 which provides additional benefit to the charitable trust using their property for commercial purposes. The issue aforesaid has not been determined by the Municipal Corporation, Jaipur.

¶246

In the same manner, it should not have other income or rental thus a proper consideration of the issue in reference to the proviso and the Explanation I read with notification dated 29.8.2007 needs to be given. If any of the petitioners satisfies the conditions given under section 107(4) of the Act or the notification dated 29.8.2007 then would be entitled for exemption from tax for the period, it is available to them but not otherwise.

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Learned counsel for Municipal Corporation has submitted that many petitioners are not holding the land and building in the name of the charitable trust. It is again a question of fact to be determined after calling the documents because the order of assessment and demand notice were issued without calling the petitioners. It may be for the reason that before issuing demands, procedure for assessment was provided by the notification dated 29.8.2007. It is to simplify the procedure where the assessment of tax has to be made based on valuation of the property on DLC rate. The simplification of procedure is to avoid dispute about assessment of the value of the property.

¶249

The assessment of tax on DLC rate can be made if the land and building is not exempted under section 107 or the notification dated 29.8.2007 but the issue to be determined is as to whether the petitioners are entitled to the exemption. The aforesaid issue needs finding of fact and while exercising powers under Article 226 of the Constitution of India, it cannot be recorded. I am thus of the opinion that while the writ petitions cannot be dismissed on the ground of alternative remedy but looking to the facts of this case where certain issues raised by the parties need finding of fact, the matter can be sent back to the Municipal Corporation or, in the alternatively, to the appellate authority. If the matter is sent back to the Municipal Corporation, the issues and the grievance raised by the

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petitioners may again subsist on the ground of pre-determination of the Municipal Corporation to justify their earlier action.

¶252

In view of above and as agreed by the Advocates appearing for petitioners to refer the matter to the appellate authority but with a clarification that till the matters are decided on all the issues by the appellate authority, demands in question may not be executed. A further prayer is to grant relaxation in the condition of pre-deposit of amount. It is looking to the fact that the matter should have been remanded back to the Municipal Corporation for a decision afresh but to avoid the issue of pre-determination, it is sent to the appellate authority. The prayer is made to allow them reasonable period of three weeks to prefer appeal/s.

¶253

The aforesaid proposition has not been accepted by learned counsel for National Engineering Industries Ltd.

¶254

I find that documents have not been produced to show allotment of land in the name of charitable trust. In view of above, it cannot be said that land belongs to the charitable trust though it is stated that the building was constructed by the charitable trust. In my opinion, the property needs to be of charitable trust because even if notification dated 29.8.2007 is applied, exemption is not given to the charitable trust but it is to a 'property' of charitable trust thus to seek exemption under the said notification, it needs to be established that

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the property in question belongs to a charitable trust and not to a company.

¶257

In view of above, learned counsel for National Engineering Industries Ltd. also accepted the similar directions. Learned counsel for respondents prayed for time bound directions.

¶258

In the result, these writ petitions are disposed of by following directions -

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1.The petitioners would prefer an appeal within a period of three weeks. On an appeal, the appellate authority would consider as to whether petitioners are entitled to get exemption of tax under section 107 of the Act of 1959 and the notification dated 29.8.2007. The appellant authority would take note of definition of 'charitable purpose' given in the Explanation-I to sub-section (4) of section 107 of the Act of 1959 apart from the proviso appended thereto. The appellate authority would determine as to whether any of the institutions, seeking exemption under section 107, is confirming the conditions of the proviso and if it is using the land and building for business or trade or earning rent or derive other income then would not be entitled to exemption of tax unless property exists in the name of a charitable trust, if notification dated 29.8.2007 applies.

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2.If the first issue is determined against the petitioners, then further issue would be determined in respect of the tax liability. The assessment of the tax liability would obviously be on the basis given under the notification dated 29.8.2007. The petitioners would, however, be at liberty to take all the issues in regard to determination of tax liability and if they point out any illegality in determination of

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tax, then would be considered by the appellate authority in accordance with provisions of law.

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3.The further issue remains in reference to the Act of 2009 because provisions of section 107 of the Act of 2009 is different than what it was under section 107 of the Act of 1959. The exemption is not provided in the manner existing earlier. Section 107 of the Act of 2009 does not provide exemption of tax other than to the places of worship. The issue, however, needs consideration in reference to notification dated 29.8.2007 and subsequent clarificatory notification dated 31.8.2015. The determination of the issue would be after considering the effect of section 344 of the Act of 2009. The appellate authority would accordingly consider the aforesaid issue also apart from the issue of liability after the Act of 2009.

¶264

Learned counsel for the parties have referred several judgments on the issue of alternative remedy and all related issues, however, those judgments are not required to be dealt with because the writ petitions are not dismissed on the ground of availability of alternative remedy, rather, cases have been sent to the appellate authority, as agreed by the parties. The matter could have been remanded to the Municipal Corporation for determination of all the issues after taking into consideration the facts of the case. It has been sent to the appellate authority so that controversy can be considered to the satisfaction of the parties after proper opportunity of hearing. It is even to avoid further litigation in the hands of the petitioners.

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4.The appeals would be preferred within three weeks from today with advance copy to the Municipal Corporation. They would submit reply thereupon within three weeks. The hearing of the appeals would finally be made by the appellate authority within three months thereupon, for which, date would be informed by the appellate authority. Till the appeal/s is decided within the time given above, Municipal Corporation would not effect demands under challenge,

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rather, demand notices are made subject to final outcome of the order passed by the appellate authority.

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5.It is also made clear that if any other issue remains, then parties would be at liberty to raise it before the appellate authority.

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6.The condition of pre-deposit for maintaining the appeal is relaxed as it is taken as substitute of remand of the case to the respondents.

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7.If any of the petitioners fails to prefer appeal, respondents would be at liberty to execute the demand.

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A copy of this order be placed in each connected file.

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