vil Appeal Nos 395 and 1346 N of 1973 From the Judgment and Order dated 13121971 of the Andhra Pradesh High Court in AAO No 279 and 2 16 of 1970
Vepa P Sarthy B Parthasarthi and GN Rao for the Appellant
VS Desai Naunit Lal and Kailash Vasdev for the Respond ent
The Judgment of the Court was delivered by THAKKAR J
Believe it or not the most incongruous arguments can sometimes find a suiter
Were it not so the High Court of Andhra Pradesh could not have taken the view that occupation or user of lands and buildings for the purpose of running horse races and for training the horses etc
constitutes occupation or user of the property for a charitable  purpose
The High Court has taken the said view an impossible view in our opinion in the context of the exemption from levy of municipal taxes claimed by the Race Course Club respondent herein in respect of 127 acres 14 goonthas and 95 sq
yards of land alongwith structures 197 standing thereon which were sought to be assessed to gener al tax under Section 202 of the Hyderabad Municipal Corpora tion Act Act in short
The respondent boldly contended and strangely enough succeeded in convincing the High Court that Section 2021b of the Act was attracted as occupa tion and user of the property for running horse races and training of horses etc
constituted occupation and user of the property for a charitable purpose  within the meaning of the said provision
Now Section 2021b of the Act is in these terms 2021 The general tax shall be levied in respect of all buildings and lands in the city except a xxxx b buildings and lands or portions thereof solely occupied and used for public worship or for a charitable or educational purpose c xxxx d xxxx The High Court launched upon an exercise to ascertain whether the income of the Race Club was used for a charita ble purpose
And on perceiving that some of the purposes for which the income was to be employed were charitable purposes concluded that the exemption under Section 2021b was available
The test to apply is to seek an answer to the question to what use is the property put or for what pur pose is the property put
And to ascertain whether such occupation or user is for a charitable  purpose
In the present case the occupation and user is to conduct horse races and to train horses for racing
Unless it can be posited that conducting of horse races is a charitable purpose it cannot be concluded that the exemption envi sioned by Section 2021b is attracted
And even if one were to take the most charitable  view as regards the meaning and content of the expression charitable  conduct ing of horse races or training of horses for the races cannot be said to be a charitable activity
The expression charitable in the context of Section 2021b means a benevolent activity calculated to benefit the poor or the deprived
Surely horse racing is not such a benevolent activity however charitable a view one takes
It has also to be emphasized that it must be the very activity which is carried on on 198 the property which must be charitable and not the applica tion of the income of such activity
What the High Court has completely failed to realize is that the occupation  of the land and buildings or the user  of the land and buildings must be for a charitable purpose  and that it is altogether irrelevant as to the manner in which the income of the club is utilised
Section 2021b makes no reference to the question as regards the employment of the income of the club or the purpose for which the income is so employed
Exemption is granted only in respect of buildings which are solely  used meaning thereby exclusively used for charitable purpose
For in stance if the premises are occupied for the purposes of benevolent activities such as the running of a free dispen sary or clinic or for running of a free school for the children such user of the building would constitute a user for a charitable purpose and entitle the owner of the build ing to claim exemption
It is impossible to subscribe to the view that occupation or user for any  purpose would consti tute a user for a charitable purpose provided the income is used for a charitable purpose
Clutching at the tail of this reasoning one would be induced to the conclusion that user of a building for running a common gaming house or for any immoral or illegal purpose would be user for a charitable  purpose provided the income of the common gaming house is utilised for a charitable purpose
The argument deserves no further scrutiny and must be rejected outright
No further exercise need be undertaken in order to find out whether or not Section 2021b is attracted in the facts of the present matter
The judgment of the High Court in so far as the High Court holds that Section 2021b is attracted must therefore be reversed and set aside
We are of the opinion that the user of the premises for the Race Course Club will not constitute occupation or user for a charitable purpose within the meaning of Section 2021b and the Race Course Club will not be entitled to claim exemption from levy of general tax
Two other questions have been agitated by the Appellant Municipal Corporation
First whether the general tax could have been lawfully levied for the assessment year 1966 67
The High Court has rightly taken a view adverse to the appellant on an appreciation of evidence
We do not see any fallacy in the reasoning of the High Court
We therefore do not propose to disturb the finding recorded by the High Court in so far as this question is concerned
Secondly as regards the valuation of the property
The learned Judge of the Small Causes Court has valued the property at Rs4 lakhs
The valuation made by the Small Causes Court has been confirmed by the High 199 Court
We see no reason to interfere with the valuation as made by the Small Causes Court and confirmed by the High Court
Accordingly in so far as these two points are con cerned the decision rendered by the High Court must be confirmed
The appeals are therefore partly allowed to the afore said extent
The order passed by the High Court in so far as it is held that the property is exempt from levy of general tax under Section 2021b is  set aside
The appellant would be entitled to levy general tax from 1967 68 onwards in accordance with law
The appeals are partly allowed to this extent
There will be no order as to costs
APJ Appeals allowed


Summary:
The appellant Corporation sought to assess the land and buildings of the respondent club to genera1 tax under section 202 of the Hyderabad Municipal Corporation Act 1955
The re spondent claimed exemption on the ground that occupation and user of the property for running horse races and training the horses etc
constituted occupation and user of the property for a charitable purpose  within the meaning of section 2021b which was refused
The respondent approached the High Court and succeeded
Partly allowing the appeal by the Corporation HELD 1
For determining whether exemption under section 2021 b of the Hyderabad Municipal Corporation Act 1955 was available the test to apply is to seek answer to the question to what use is the property put or for what pur pose is the property pat and to ascertain whether such occupation or user is for charitable purpose 
197F 2
The expression charitable  in the context of section 2021b means a benevolent activity calculated to benefit the poor or the deprived
Horse racing is surely not such a benevolent activity however charitable a view is taken
It must be the very activity which is carried on the property which must be charitable and not the application of the income of such activity
197H 198A 3
The High Court has completely failed to realize that the occupation  of the land and buildings or the user  must be for charitable purpose  and that it is altogether irrelevant as to the manner in which the income of the club is utilised
Section 2021b makes no reference to the question as regards the employment of the income of the club or the purpose for which the income is so employed
Exemp tion is granted 196 only in respect of buildings which are solely  and exclu sively used for charitable purpose
198B 4
In the instant case the user of the premises for the Race Course Club will not constitute occupation or user for a charitable purpose  within the meaning of section 2021b and of Race Course Club will not be entitled to claim exemp tion from levy of the general tax
198F 5
The High Court has rightly taken a view adverse to the appellant as regards the levy for the assessment year 1966 67 on an appreciation of evidence and there is no warrant to disturb the said finding
There is also no reason to interfere with the valuation of the property as made by the Small Causes Court and confirmed by the High Court
198G H 6
The order passed by the High Court in so far as it is held that the property is exempt from levy of general tax under section 2021b is set aside
The appellant would be entitled to levy general tax from 1967 68 onwards in accord ance with law
199B