Educational institutions are exempt from paying property tax under Section 83(1)(c) of the TNDM Act, 1920, for the period prior to the amendment, and the amendment to the Act is not retrospective in nature.

ORDER :

[Prayer: Writ Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus, to call for the records of the 2nd respondent in proceedings Na.Ka.No.538/2017/A1 dated 14.09.2017 quash the same consequently direct the 2nd respondent to adjust the petitioner's payment of Rs.42,20,505/- which is already paid as Property Tax for building approval charges as per the 2nd respondent's notice dated 07.12.2017, exempt the petitioner from paying Property Tax as per the demand notice dated 18.08.2017 issued by the 2nd respondent to the petitioner.]

The petitioner has challenged the impugned order seeking to demand property tax from the petitioner for the period commencing from 2017-2018. Earlier the petitioner had itself opted to pay property tax and had approached the respondents to assess the property. Payments were made by the petitioner ignoring the exemption that was available to the petitioner under Section 83(1) (c) of the Tamil Nadu District Municipalities Act, 1920 (herein after referred to as the TNDM Act, 1920).

2. In this writ petition, the petitioner has challenged the levy saying that there is no estoppel in law merely because the petitioner opted to pay property tax voluntarily for the earlier period. It is therefore submitted that the petitioner cannot be compelled to pay property tax in view of the exemption under Section 83(1) (c) of the aforesaid act.

3. In this context, the learned counsel for the petitioner placed reliance on the decision of the Division Bench of this Court in a batch of Writ Petitions in W.A.No.2080 of 2003, vide order dated 07.01.2008 in Sriram Educational Trust Vs. The President, Thiruvallur Taluk & District.

4. The learned counsel for the petitioner submits that when the said order was passed, the Court was faced with 2 conflicting view of this Court in Kamaraj College of Engineering and Technology, Managing Board, Rep by its Secretary, Virudhunagar Vs. President, K.Vellakulam Panchayat, Madurai District, (2006) 3 MLJ 1068 and another decision in W.P.No.48068 of 2002 in order dated 30.04.2013. The decision rendered in Kamaraj College of Engineering and Technology, Managing Board, Rep. by its Secretary, Virudhunagar Vs. President, K. Vellakulam Panchayat, Madurai District was preferred. There, the question that fell for consideration was exemption under Rule 15(C) of the Tamil Nadu Village Panchayats (Assessment and Collection of Taxes) Rules, 1999.

5. The Court after considering the law on the subject and after referring to Section 83 of the TNDM Act, 1920 concluded that Educational Institutions were entitled to exempt from payment of property tax if the dominant object or use of the building was for educational purpose alone. It was held that there are no words of restrictions attached to the provision dealing with educational purposes. The Court thus confirmed the view taken by the learned Single Judge of this Court in Kamaraj College of Engineering and Technology, Managing Board, Rep. by its Secretary, Virudhunagar Vs. President, K.Vellakulam Panchayat, Madurai District, (2006) 3 MLJ 1068.

6. Defending the impugned order, seeking to collect tax, the learned counsel for the respondents/revenue submits that the petitioner had voluntarily paid property tax knowfully well that the petitioner was liable to pay property tax and therefore the petitioner was not entitled to exemption.

7. The learned counsel for the respondents/revenue further submits that even as per Section 83(1) (c) read with proviso the explanation, exemption cannot be granted to the petitioner as the petitioner was not a charitable institution and therefore the writ petition was liable to be dismissed. The learned counsel for the respondents/revenue further submitted that Section 83(1) (c) of the TNDM Act, 1920 was amended in the year 2018 and the vires of the amendment came to be chall