The absence of a specific provision in the statute enabling the levy of surcharge and the need for a substantive provision to support any levy.

JUDGMENT

(Prayer: Writ Petition filed under Article 226 of the Constitution of India, to issue aWrit of Certiorari, calling for the records, pertaining to the impugned resolution, dated 10.04.2018 in resolution No.292/2018, on the file of the 2nd respondent and the assessment order, dated 29.05.2018, in Order No.N/09/111/18-19/2546, and the current demand and arrears demand, dated nil, in No.0911112266000, on the file of the 3rd respondent, insofar as it imposes 60% of educational institution surcharge, in respect of the petitioner school, and quash the same.)

Common Order:

1. Nineteen schools in the city of Chennai and one in the district of Coimbatore are before me in this batch of Writ Petitions.

2. The legal issue that arises for consideration is as to whether the Chennai City Municipal Corporation and Coimbatore City Municipal Corporation have the authority to levy surcharge of 60% of the tax payable on the buildings used by the petitioner schools for educational purposes.

3. The levy of property tax on educational institutions has itself had a checkered career. While educational institutions were exempted from the levy of property tax by virtue of Section 101(c) of the Chennai City Municipal Corporation Act, 1919 (in short 'Act'), an amendment was brought to clause (c) thereof, by virtue of which unaided schools were removed from the purview of exemption that continued only in the cases of Government and aided schools.

4. The exclusion from exemption came to be challenged by unaided city schools in a batch of Writ Petitions, and came to be repelled by a decision of this Court dated 13.09.2019 in W.P.No.18008 of 2019. While rejecting the challenge, the Division Bench preserved the liberty of the petitioners to challenge the demand notices in accordance with law.

5. The demand notices levied general tax, educational tax, library cess and surcharge. The challenge in this batch is restricted to the levy of surcharge alone. W.P.No.34104 of 2019 is referred to for ease and convenience in referring to the supporting documents. The submissions of the learned counsel for the petitioners led by Mr.Father Xavier, learned Senior Counsel are as follows:

(i) All petitioners are unaided educational institutions situated in Chennai and one in Coimbatore and are compliant in the payment of property tax.

(ii) The petitioners draw my attention to an assessment made upon the school, and reiterate their readiness and promptness in remitting the half-yearly tax, as computed, though not surcharge, levied at the rate of 60%.

(iii) The enactment does not provide for the levy of surcharge and hence, there is no statutory authority from which the respondents may draw power to levy the surcharge. In this regard, reference is made to Section 99 of the Act. The proviso to Section 99(2) fixes a ceiling of 25% of the annual value of buildings and lands for the levy of the taxes. In the present case, the totality of the taxes and surcharge which would be as follows, viz., general tax + educational tax + library cess + surcharge, is in excess of 25% of the annual value of buildings.

(iv) However, if the levy were to be restricted to general tax (9%) + educational tax (2.5%) + library cess (0.90%), it will amount to a total of 12.40% for a half year and 24.8% for the entirety of the year, which would be within the ceiling imposed. Thus, the imposition of the surcharge would vitiate the statutory pecuniary ceiling that has been imposed.

(v) Reliance is placed upon the judgements in Zilla Parishad, Muzaffarnagar and Another Vs. Jugal Kishore Ram Swarup and Another [(1968) SCC Online ALL 117] and the State of Kerala and Others Vs. K.P.Govindan, Tapioca Exporter, [(1975) 1 SCC 281] in support of the aforesaid submission.

(vi) The impugned notification is based upon a draft notification which refers to the provisions of Section 172(1) of the Tamil Nadu Panchayats Act, 1994 (in short 'Panchayats Act'). In fact, the statutory provision under the Panch