R. K. ABICHANDANI, J.

( 1 ) THE petitioner, Gujarat Agricultural University, incorporated under the provisions of the Gujarat Agricultural University Act, 1969, seeks a direction for setting aside the levy of property tax on its campus by the respondent-Municipality pursuant to its decision dated 29th June, 1994 and 28th September, 1994, and quashing the bills for levy of property tax.

( 2 ) THE petitioners case is that the campus of the University consists of 900 Acres of land, wherein there are a college, hostels and teachers quarters, besides the agricultural farm. According to the petitioner, its properties are exempt from payment of property tax under the provisions of the Gujarat Municipalities Act, 1963. Earlier, in 1947, the respondent-Municipality attempted to levy and impose property tax on the properties belonging to the Institute of Agriculture, which was taken over by the Gujarat Agricultural University under the provisions of the Act. However, by judgment and order dated 28th April, 1953, passed in Second Appeal No. 590 of 1951 at Annexure "a" to the petition, the High Court of Bombay held that the buildings of the Institute of Agriculture were exempt from payment of house tax. According to the petitioner, even Proviso to Section 99 of the Gujarat Municipalities Act, 1963 exempted the property tax in respect of any building belonging to the government. The petitioner has relied upon the provisions of Section 39 of the Gujarat Agricultural University Act to point out that, it is a University funded by the State Government, and has stated that under the resolution of 14th September,1976, rules were framed by the State Government, governing the grant of financial assistance to the University. Any income received by the University was required to be credited to the State Government. The University is an Agricultural Research Organisation which carries out research through the State of Gujarat and is not a private institution. It is responsible for the agricultural extension education activities in the State necessary to communicate and demonstrate to the cultivators the findings and development of agricultural research essential to improve rural living and to increase agricultural production with special emphasis on food production and utilization. According to the petitioner, having regard to the fact that the University has taken over the Institute of Agriculture, Anand, which was originally a government institution and was exempt from payment of property tax, it was just and proper to continue the exemption in respect of the property of the University.

( 3 ) THE respondent-Municipality has raised the contention that in view of statutory remedy of appeal provided by Section 138 of the Gujarat Municipalities Act, 1963, the petition ought not to be entertained. In its affidavit-in-reply, it is emphasized that the University avails of all the amenities provided by the Municipality within its area and, therefore, it was liable to pay the property tax. It is pointed out that the properties which are vested in the University, are no more properties of the government and, therefore, the exemption contemplated by Section 99 of the Gujarat Municipalities Act was not attracted in case of this property. It is also contended that the University charges rent for staff quarters, hostels, shops which are within its campus and, therefore, the property tax is recoverable from the University which houses the premises for commercial and other purposes.

( 4 ) THE learned counsel for the petitioner-University argued that since the property of the Institute of Agriculture which belonged to the University became the property of the University, on the Institute of Agriculture being handed over to the University, the exemption which was earlier granted and recognized by the decision by the Bombay High Court, a copy of which is at Annexure:a to the petition, continued to operate and it was not open for the Municipality to recover the propert

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