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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
RAJIV SHARMA, HARINDER SINGH SIDHU, JJ.
Municipal Corporation UT, Chandigarh - Appellant
Versus
Shri Guru Gobind Singh College of Pharmacy and Others - Respondent
Letters Patent Appeal No. 424, 425, 426, 427, 428, 147, 429, 430, 431, 432, 433, 434, 435, 436, 437, 438, 439, 440, 441, 442, 443, 452, 453 of 2011; Civil Writ Petition No. 13473 of 2010, 1366 of 2008, 20225 of 2013
Decided On : 09-08-2019
(A) Punjab Municipal Corporation Act, 1976--Property Tax--Levy of tax on institutional land and buildings including educational institutions which is duly authorized by the Municipal Corporation is legal and valid. (Para 60)
(B) Chandigarh Municipal Corporation (Tax on Commercial and Industrial Land and Buildings) By Laws and the Self Assessment Scheme, 2002--Property Tax on Educational Institutions--Bye Laws--A mere wrong recital in the notification dated 3.6.2003 that the bye-laws had been made by the Administrator would not invalidate the bye- laws which is clear from the records that it had been framed by the Corporation, published for information of the public after being approved by the Administrator with changes, and thereafter notified. (Para 71)
The Ld. Single Judge relied on this recital to hold that the byelaws had been made by the Administrator. The Ld. Single Judge acknowledged that a perusal of the record produced before the Court showed that in fact the bye-laws were framed by the Municipal Corporation and were approved and thereafter sent to the Administrator for publication and notification in the Official Gazette. But as in the notification dated 3.6.2003 these had been stated to be framed by the Administrator, U.T. Chandigarh they have to be taken to be so framed. It was held that in order to interpret a notification, the necessity to look into the proceedings etc. arises only to clarify the doubt. Otherwise simple interpretation is to be given to the notification. As in terms of the Act the Bye-laws could only be framed by the Corporation and not by the Administrator the same were declared to have been framed without jurisdiction and quashed. With respect we are unable to agree with the Ld. Single Judge. We find that there is no infirmity in the framing and notification of the Bye-laws. The draft bye-laws were framed by the House Tax Assessment Committee of the Corporation. In fact the process of framing had being under way since long. These were approved by the General House of the Corporation in the meeting held on 29.1.2003. Thereafter, they were sent to the Government for approval and notification. The Government/Administrator approved it with amendments. Before final notification the draft bye-laws as approved by the Administrator were published inviting objections. Later they were notified. (Paras 67,68&69)
(C) Punjab Municipal Corporation Act, 1976, S.90 and S.399--Property Tax--Sections 90 (1), 90(3) and 399 of the Act read together provide for the complete machinery for levy, assessment and collection which is the essential requirement of any taxation statute--The tax has to be levied by the Corporation, the rate thereof is to be specified by the Government (Administrator) and the Bye-laws for its assessment and collection have to be framed by the Corporation in the manner as contemplated in Section 401. (Para 35)
(D) Interpretation of Statutes--Taxing Statute--While interpreting a taxing statute the charging and the computation provisions have to be read together homogeneously and both are to be given effect--The computing provision cannot be treated as mere surplusage or of no significance--What necessarily flows therefrom also has to be given effect to. (Para 38)
JUDGMENT :
HARINDER SINGH SIDHU, J.
1. This order shall dispose of Letter Patent Appeal Nos.424 to 443, 147, 452, 453 of 2011 and Civil Writ Petition Nos.13473 of 2010, 1366 of 2008 and 20225 of 2013.
2. The Letters Patent Appeals have been filed by the Municipal Corporation UT Chandigarh challenging the judgment dated 24.09.2010 of the Ld. Single Judge. Vide that judgment the Ld. Single Judge had disposed of a bunch of writ petitions filed by various un-aided private schools challenging the imposition of property tax on them. The writ petitions were allowed. The notification dated 22.11.2004 issued under Section 90(3) of the Punjab Municipal Corporation Act, 1976 which was extended to Chandigarh by the Punjab Municipal Corporation (Extension to Chandigarh) Act 1994 (hereinafter referred to as "the Act") specifying the rate of property tax on 'institutional lands and buildings' was quashed. The Bye-laws and Self-Assessment Scheme as framed were also quashed.
3. The three writ petitions had been ordered to be heard with this bunch of LPAs. Accordingly they are also being disposed of vide this common judgment.
4. For facility of reference the facts are being taken from LPA No.147 of 2011 in CWP No.6651 of 2007.
5. Cwp No.6651 of 2007 was filed by seven private un-aided schools. They challenged the notification dated 22.11.2004 issued by the Chandigarh Administration specifying the tax on Commercial, Industrial and Institutional Lands and Buildings in Chandigarh. They also challenged the bye laws and the self assessment scheme notified on 3.6.2003.
6. It was the case of the petitioners that the petitioner schools were managed by Societies registered under the Societies Registration Act, 1860. The land of the schools was owned by the Central Government. It was allotted to them on lease hold basis as per the 'Chandigarh Lease Hold of Sites and Building Rules, 1973'. It was their case that the petitioners survive financially solely on the fee collected from the students. They have no other source of income as they receive no funds or aid from the Government. The schools serve an essential public purpose. As per the decision of the Hon'ble Supreme Court in TMA Pai Foundation Vs. State of Karnataka, 2002 8 SCC 481 educational institution is a recognized head of charity. It is not a profit making business.
7. The challenge was on a number of grounds. Only two grounds found favour with the Ld. Single Judge :
(ii) As per the resolution dated 29.1.2003 of the General House of the Municipal Corporation, Chandigarh tax was imposed on 'commercial lands and buildings including industrial units, residential houses used for commercial purposes' etc. No tax had been levied on 'Institutional lands and buildings' in that resolution. The word 'institutional' was introduced in the bye-laws by the Administrator of the Union Territory on his own. The Administrator could not in exercise of the power under section 90(3) of the Act while fixing the rates of tax introduce 'institutional lands' for the purpose of taxation.
8. To appreciate the issues it would be necessary to briefly go into the background of the levy which has been detailed in the written statement filed on behalf of the Municipal Corporation.
9. After the coming into being of the Municipal Corporation, Chandigarh, the Secretary, Local Government vide letter dated 26.09.1996 requested the Commissioner, Municipal Corporation to pass a resolution for imposing taxes and buildings under Section 90 (1) of the Act. The Corporation in its meeting held on 22.10.1996 decided that house tax on lands and buildings on all commercial/industrial units will be ch
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