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2022 Supreme(Mad) 740
IN THE HIGH COURT OF JUDICATURE AT MADRAS
ANITA SUMANTH, J.
Arulmigu Marundeeswarar Thirukoil, Rep. by its Executive Officer, Chennai – Appellant
Versus
The Commissioner of Land Reforms, Chennai & Another – Respondents
W.P.No. 12780 of 2019 & WMP. No. 12992 of 2019
Decided on : 15-07-2022
For the Appellant :Wilson Topaz, M/S. A.S. Kailasam Associates, Advocates.
For the Respondents:R. Neelakandan, Addl. Advocate General Assisted by C. Sangamithirai, Special Government Pleader.
The main legal point established in the judgment is the presumption of undue hardship to religious institutions in the grant of exemption from Urban Land Tax, as recognized in the relevant Government Orders and the provisions of the Tamil Nadu Urban Land Tax Act, 1966.
Headnote:
Urban Land Tax - Exemption for Religious Institution - Tamil Nadu Urban Land Tax Act, 1966, Section 27(1)(a), Section 29 - The court discussed the provisions of Section 27 and Section 29 of the Tamil Nadu Urban Land Tax Act, 1966, and the relevant Government Orders pertaining to the grant of exemption to religious institutions from the levy of Urban Land Tax. The court emphasized the presumption of undue hardship to religious institutions and set aside the order rejecting the exemption, directing the authority to reconsider the petitioner's entitlement for exemption in line with the prescribed criteria.
Fact of the Case:
The petitioner, a public religious temple, sought exemption from the payment of Urban Land Tax under Section 27(1)(a) of the Urban Land Tax Act, 1966. The Commissioner of Land Reforms rejected the exemption claim, citing that the tax amount was insignificant and would not cause undue hardship to the petitioner.
Finding of the Court:
The court found that the rejection of the exemption claim was based on an erroneous premise and set aside the order, directing the authority to reconsider the petitioner's entitlement for exemption in line with the prescribed criteria.
Issues: The main issue was the rejection of the petitioner's claim for exemption from Urban Land Tax under Section 27(1)(a) of the Act, and the failure to consider the relevant Government Orders pertaining to the grant of exemption to religious institutions.
Ratio Decidendi: The court emphasized the presumption of undue hardship to religious institutions and held that the authority erred in re-visiting the aspect of undue hardship, as it had been accepted by the State in the Government Orders. The court directed the authority to reconsider the petitioner's entitlement for exemption in line with the prescribed criteria.
Final Decision: The Writ Petition was disposed, and the order rejecting the exemption claim was set aside. The petitioner was permitted to appear before the Authority to establish its entitlement for exemption, and the Authority was directed to pass an order within a specified period in line with the parameters set out under the relevant Government Orders.
JUDGMENT :
(Prayer: Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorarified Mandamus, calling for the records which culminated in the impugned order of the 1st respondent bearing Rc.No.8024/2018/B3, dated 11.03.2019, quash the same and consequently direct the 1st respondent to pass an order exempting the lands of the petitioner from payment of the Urban Land Tax under Section 27(1)(a) of the Urban Land Tax Act, 1966.)
1. The petitioner is the Arulmigu Marundeeswarar Thirukoil at Thiruvanmiyur (referred to hereinafter as ‘temple’) and the challenge is to proceedings of the Commissioner of Land Reforms, dated 11.03.2019. The petitioner is a public religious temple of great antiquity. The deity, Marundeeswarar owns several properties at Thiruvanmiyur, Pallavakkam, Neelankarai and North Chennai that have been endowed unto the temple over the centuries.
2. The petitioner claims that the income derived from the letting out of the lands has been utilized fully for the purposes of the temple. There is no dispute in regard to the ownership of the lands insofar as they form part of the Statutory Property Register that has been maintained by the Hindu Religious and Charitable Endowments Department which oversees the administration and management of the temple.
3. The management of the temple is as per the scheme that was formulated on 22.09.1969. The petitioner, in the belief that it is entitled to an exemption in terms of the provisions of the Tamil Nadu Urban Land Tax Act, 1966 (referred to hereinafter as ‘Act’) from remittance of Urban Land Tax (in short ‘ULT’) made a representation to the 1st respondent/the Commissioner of Land Reforms (R1/CLR) on 09.02.2005 seeking such exemption.
4. On 18.07.2018, proceedings came to be passed confirming the levy of the Urban Land Tax as against which W.P.No.25200 of 2018 was filed by the petitioner. The Writ Petition was disposed permitting the petitioner to re-submit a copy of the representation insofar as it had been the stand of the respondent that the representation has not been received by him. A direction was issued to the respondent to dispose the same after hearing the petitioner and to maintain status quo in terms of enforcing the demand, till such time, an order was passed.
5. The petitioner was thereafter heard and called upon to furnish its financial records including Audited Income and Expenditure Statement for the faslies 1423, 1424 & 1425 corresponding to 2014, 2015 & 2016 of the Gregorian Calendar. The impugned order has come to be passed by the first respondent recording categorically that he has taken note of the Audited Income and Expenditure Statement and other financial records.
6. A specific finding of fact is recorded to the effect that the rental income earned by the petitioner from the lands let out, are being utilized only for the purposes of the temple. The officer computes average net income, average net expenditure, average percentage of ULT to the total net income and average percentage of Urban Land Tax to total net expenditure, as follows:
| Average Net Income | Rs.11,66,27,347/- |
| Average Net Expenditure | Rs.11,63,63,275/- |
| Average % of ULT of the total Net Income | 0.013% |
| Average % of ULT of the total Net Expenditure | 0.013% |
7. Thus, while accepting the position that there was no diversion of funds and the rental income was being deployed towards temple premises only, the respondent rejects the exemption on the ground that the ULT computed as payable was an insignificant component of the total net expenditure, barely 0.013% of a sum of Rs.11,63,63,275/- which would not cause any undue hardship to the petitioner.
8. This finding has been inspired by the language under Section 27 of the Act, extracted below:
“27. Power of Government to exempt or reduce urban land tax -
(1) The Government, if satisfi
