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2023 Supreme(P&H) 3386
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
RITU BAHRI, MANISHA BATRA, JJ.
Shri Daulat Ram Khan – Petitioner
Versus
State of Haryana & Ors. – Respondents
CWP NO. 5348 of 2007 (O&M)
Decided On : 13-02-2023
For the Petitioner:Mr. Rajesh Lamba, Advocate.
For the Respondent: Ms. Mamta Singla Talwar, DAG, Haryana.
For the Respondent No.3:Mr. Prateek Mahajan, Advocate.
Headnote:(A) Haryana Municipal Corporation Act, 1994 - Section 128 - Exemption Notification dated 30.09.2003 - Petitioner challenged the auction order for tax recovery on grounds of exemption based on the nature of the property used for community purposes - The Court reiterated that the Dharamshala, registered as a religious institution, qualifies for exemption despite charging nominal fees for community services - The respondents did not provide adequate grounds for denying this exemption. (Paras 6-9)
(B) Charitable Institutions - The characterization of an institution's activities as 'commercial' must consider the nature of services provided to the community - The Court found that charging nominal fees for ceremonies does not equate to commercial activity, as opposed to private profit-oriented establishments. (Paras 9)
Facts of the case:
The petitioner sought to quash an auction order due to non-payment of assessed property tax, claiming exemption under the Haryana Municipal Corporation regulations since the property serves community religious purposes.
Findings of Court:
The petition is allowed, quashing the auction order as the Dharamshala is covered under the exemption notification and its rental practices do not constitute commercial use.
Issues: The critical issues were whether the property qualifies for tax exemption under existing notifications and whether charging fees for community services negates that exemption.
Ratio Decidendi: The court held that the Dharamshala's activities serve community interests and do not constitute commercial exploitation, hence the exemption applies.
Result: Petition allowed.
| Table of Content |
|---|
| 1. petitioner's request and order details. (Para 1 , 2 , 3 , 4) |
| 2. precedent case for tax exemption. (Para 5) |
| 3. notification details for tax exemption. (Para 6) |
| 4. criteria for exemption from house tax. (Para 7 , 8 , 9) |
| 5. order to quash the auction. (Para 10) |
JUDGMENT
Ritu Bahri, J. (Oral)
In the present petition, petitioner is seeking writ of certiorari quashing of order dated 14.03.2007, Annexure P-1 vide which auction has been fixed for 09.04.2007 in Municipal Auditorium, NIT, Faridabad.
2. A perusal of the order dated 14.03.2007, Annexure P-1 reveals that the tax on lands and buildings of the petitioner was assessed @ Rs.225989/- per annum and notice of demand including arrears upto 2005-06 in the prescribed forms were served upon the assesses vide bill No. 56/2417 dated 12.07.2005 for an amount of Rs.1014217/- in accordance with provisions of Section 128 of the Haryana Municipal Corporation Act, 1994.
3. In order to recover this amount, the Joint Commissioner, NIT Zone Faridabad exercising the power of Commissioner 401(2) of HARYANA MUNICIPAL ACT , 1994 ordered the attachment of plot No. Khan Daulat Dharamshala NH-2( Area/Sector) and building constructed thereon and gave further direction to put the property on public auction on 09.04.2007 at 11:00 am in the Municipal Auditorium, NIT, Faridabad for recovery of the tax.
4. In the present case, notice of motion on 05.04.2007 and operation of impugned order Annexure P-1 was stayed. Thereafter, the present writ petition was admitted on 04.11.2008 and interim order was to continue.
5. Learned counsel for the petitioner has referred to a judgment given by co-ordinate Bench of this Court in CWP No.3537 of 2004 decided on 10.01.2006, Digamber Jain Society for Child Welfare (Registered), Faridabad and another v. State of Haryana etc. Perusal of this judgment shows that as per the notification dated 30.07.1975 and 30.09.2003, building eligible for exemption from house tax was referred to and as per para 3 of the notification dated 30.09.2003, all buildings and land or portions thereof used exclusively for educational purposes where fees at rates prescribed by Government or equivalent to Government school are charges were exempted from payment of house tax. The writ petition was allowed. Keeping in view that Digambar Jain Society was an approved institution and the demand notice for house tax could not be issued, the writ petition was allowed by referring to another judgment passed of this Court passed in CWP No. 14138 of 2003, Tagore Bal Niketan Senior Secondary School v. State of Haryana and others decided on 23.08.2004. A perusal of this judgment also shows that even in that also the issue was whether the schools which are covered by the notification for exemption from house tax can be made liable to pay house tax. In that case also, reference was made to Section 69(a) of the HARYANA MUNICIPAL ACT , 1973, where the stand of the respondent is that the education was not being imparted to 4th class society and therefore, it cannot be held that this institute is charitable. The division Bench observed that Clause (v) of the notification was categoric in providing that buildings and lands used exclusively for educational purposes are exempted from house tax and Clause (iv) was not applicable where a building is used for educational purposes but covers the case of either buildings attached to or owned by educational or charitable institutions. The only objection which the court had examined was that if the institute was making profit and was not imparting free education or complying with other conditions mentioned in Clause (iv), could not be a ground to reject the case of exemption from house tax. The writ petition was allowed keeping in view that the case of the petitioner was covered by exemption notification for the relevant period.
6. In the present case, relevant notification for seeking exemption is 30.09.2003, Annexure P-6, issued by the Haryana Urban Development
