1994 Supreme(Bom) 131

IN THE HIGH COURT OF BOMBAY
(AURANGABAD BENCH)
A.D. Mane, J.
The Municipal Council, Ahmednagar.... Appellant.
Versus
Bhaskar Pandurang Hivale.... Respondent.
First Appeal No. 818 of 1989, decided on 17-3-1994.
Advocates appeared :
V.S. Bedre, for the appellant.
S.B. Pallod with R.T. Sharma, for the respondent.

Headnote:Section 2 (13)-Maharashtra Education and Employment Guarantee (Cess) Act. 1962, Section 7 (1) (c)-Scope of general public utility.

       Held, the expression "charitable purposes" as used in Clause (e) of sub-section (1) of Section 7 of the Act assumes importance. The Counsel for the appellant is right in his submission that the admissibility of a claim to exemption from education cess must be determined by the language of the special provisions made by the Act in that b.4alf. The object both of the Trust and the Society undoubtedly is to promote educational activities and the properties referred to in the suit are prima facie held under the trust wholly for advancement of an object of general public utility. The question whether an object is of general public utility like the question whether a particular object is chartiable is a question of law as held by Privy Council in the case of Trustees of Tribune Press, Labour v. Commissioner of Income Tax, Punjab, AIR 1939 PC 208. In the present case, the competent Authority has granted the certificate of registration of the plaintiff trust under the Bombay Public Trust Act, 1950. The certificate of registration of is itself is a best piece of evidence to show that the Trust can be deemed to be a charitable trust. It is true that by the terms of trust it is clear that it is not to be carried for profit to any individual. There is, however, absolutely no material to show that any of the buildings owned by the plaintiff trust was used for profit to any individual. It is to be observed that under the Act, the test of general public utility is applicable not only to the trust registered under the Bombay Public Trusts Act, 1950 or a Waqf Board under the Waqf Act but is also to be applied to the property held under the trust or other legal obligations. Even if the object of the plaintiff society is taken into account there could not be any doubt that the plaintiff society can be called charitable trust for a charitable purpose. In the present case also the plaintiff society has been registered under the Societies Registration Act and also under the Bombay Public Trusts Act and its dominant object is charitable purpose to advance education. The meaning of the word "institution" will cover every use of it depends on. the context in which it is found. It may by emphasiss that it is well settled by now that an object beneficial to a section of the people is an object of general public utility to serve of charitable purpose. It is not necessary that the object should be an object to the whole of mankind or all persons in particular country or State. It is sufficient if the intention was to benefit a section of the public as distinguished from a specified individual is present. Moreover, Section 2 (13) of the Bombay Public Trusts Act provides that unless there is anything repugnant to the context of the public trust, public trust means an express or constructive trust for either public religious or charitable purpose or both. The very fact that the plaintiff society is also registered under the Bombay Public Trusts Act, its object is for a charitable purpose. There is absolutely no merit in the contention that because certain documents which were called from the plaintiff by the defendant were not produced, an adverse inference should have been drawn in regard to the purpose for which the trust was registered. The documents to which Court has made a reference earlier are sufficient to come to the definite conclusion that the plaintiff society is a public trust registered under the Bombay Public Trusts Act with the main object of charitable purpose to run educational institution. Thus, applying the tests of general public utility in the faces and circumstances of the case there is no doubt that the plaintiff trust or the property held by it clearly comes within the purview of Clause (e) of sub-section (1) of Section 7 of the Act. If the plaintiffs case falls under the category as described in Section 7 of the Act, undoubtedly the lands or buildings possessed by the plaintiff are exempted from payment of tax under the express provisions contained in Section 7 of the Act.

       MAHARASHTRA EDUCATION AND EMPLOYMENT GUARANTEE (CESS) ACT, 1962

       Section 7 (1) (e).

       See Bombay Public Trusts Act, 1950-Section 2 (13)].

       Section 7 (1) (e).

       See Maharashtra Municipalities Act, 1955-Sections 169,354.

       Sections 169 and 354-Maharashtra Education & Employment Guarantee (Cess) Act, 1962, Section 7 (1) (e)-Civil Procedure Code, 1908, Section 9-Bar of civil remedy-If in circumstances of case it is barred.

       Held, in view of the finding that the plaintiff society is entitled to the exemption from payment of education cess by virtue of provisions contained in Section 7 (1) (e) of the Act, the demand of education cess was undoubtedly without any authority. The levy of education cess or demand thereof under the bill was beyond the power or jurisdiction of the Municipal Council. The plaintiff was therefore, justified in seeking the declaration to that effect and in such a situation it cannot be said that the suit was not maintainable or there was bar by virtue of the provisions contained in Section 354 of the Maharashtra Municipal alities Act. It is true that in the case of assessment mode according to law, the tax payer has to challenge the assessment in appeal before the Magistrate by virtue of the provisions contained in Section 169 of the Act but it cannot be said that in the present case the assessment made by the Municipal Council was in accordance with law. It is true that the plaintiff has filed appeal before the Magistrate and it is pending. But that cannot be bar to challenge the assessment made by the defendant on the ground that it has no jurisdiction to demand education cess from the plaintiff. For these reasons the decisions upon which reliance is placed are of no assistance.