THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE N. RAVI SHANKAR W.P. No. 28695 of 2009 Dated 05-09-2011 Between: Sri Mullapudi Thimma Raju Memorial Library and Cultural Centre, A society Registered under the A.P. Societies Registration Act, 2001 vide Regn.No. 30/2003, Rep., by its Chairman Sri Mullapudi Harischandra Prasad, Tanuku, West Godavari District. …Petitioner Vs. The Tanuku Municipality, rep., by its Commissioner, Tanuku, West Godavari District and another. …Respondents THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE N. RAVI SHANKAR W.P.No. 28695 of 2009 Dated: 05-09-2011 ORAL ORDER: (Per: GR,J) Heard Sri Vedula Srinivas, learned counsel for the petitioner and Sri S. Nageswara Reddy, learned standing counsel for the 1st respondent and the learned Government Pleader for Municipal Administration and Urban Development for respondent No.3. The order of the 2nd respondent, the appellate Commissioner of Municipal Administration, Rajahmundry, East Godavari District, dated 22-12-2008, rejecting the appeal preferred by the petitioner under Sections 22 to 25 of Schedule-II of the Andhra Pradesh Municipalities Act, 1965 (for short ‘the 1965 Act) against a notice of demand of property tax dated 29-05-2006 issued by the 1st respondent for the half year commencing from 01-04- 2006, is assailed in this writ petition. The Secretary and Treasurer of the writ petitioner’s Society filed the writ petition asserting that the petitioner is a registered society under the provisions of the Andhra Pradesh Societies Registration Act, 2001; an extent of Ac.03-00 of land in R.S.No. 74 of Sajjapuram village in Tanuku municipality, Tanuku was bequeathed by late Mullalpudi Thimmaraju, under a will dated 27-02-1972 for construction of a Library building for the benefit of the public at large. Sri Mullapudi Venkatarayudu Memorial Education Trust undertook to construct a suitable building in the land for the library, for the benefit of the general public. The building was constructed by utilizing donations collected from the family of the testator; other firms and companies of members of the family. The library housed therein is open to the public. Sri Mullapudi Venkatarayudu Memorial Education Trust, a public charitable trust established under the Trust Deed dated 12-01-1958 adopted the library constructed in the area of Ac.03-00 in R.S.No. 74 of Sajjapuram Revenue Village, under the name and style of Sree Mullapudi Timma Raju Memorial Library and Cultural Centre. Claiming exemption from property tax under Section 88 (1) (c) of the 1965 Act, the petitioner preferred a revision before the 1st respondent, initially against the earliest demand notice dated 28-03-2002 raising demand for Rs.20,300-00 for the library premises. The revision having been rejected, the petitioner preferred an appeal dated 04-04-2006 to the 2nd respondent and paid Rs.1,62,404-00 under protest towards the disputed tax and arrears. When the 1st respondent issued another demand notice dated 22-06-2006 for property tax for the year ending 31-03-2006, the petitioner questioned the same by way of W.P.No. 16012 of 2006. The writ petition was disposed of granting liberty to prefer a statutory appeal since a disputed question of fact is in issue as to whether the library was open to public or otherwise. Pursuant to the directions in W.P.No. 16012 of 2006, the petitioner preferred an appeal before the 2nd respondent for the assessment period 01-04-2006 to 31-03-2007 while paying the property tax of Rs.44,256-00, under protest. The appeal was dismissed by the impugned order dated 22-12-2008. In rejecting the appeal, the 2nd respondent, concluded that the library was not accessible to the public at large and is therefore not a public building; a place intended for charitable purposes, nor a library open to the public, a condition precedent under Section 88(1)© of the 1965 Act for claiming exemption from the liability to pay property tax. For coming to the conclusion that the premises in question is not a public library, but a private library, the 2nd respondent observed that when the 1st respondent herein (respondent in the appeal preferred by the petitioner before the 2nd respondent) sent certain persons to see whether the library is open to public or not, he learnt that the library is a private library and is open only to private people relating to the institution but not to the general public. This fact was ascertained even by others. There is no clear evidence that the library is meant for the general public. Another reason recorded by the 2nd respondent for rejecting the appeal is that a cultural centre/auditorium annexed to the library was collecting maintenance charges from persons who avail the facilities as seen from Chartered Accountant certificates, certifying that they are collecting some amount for letting out the auditorium, but there is no evidence as to what amount was collected, from which person for letting out the auditorium. Therefore, the charitable nature of its activities was not established, held the 2nd respondent. The 2nd respondent also recorded that from the year of completion of its construction to the current year it was being subjected to property tax, it cannot therefore be exempted from property tax in future as well. All the three substantive reasons recorded by the 2nd respondent for rejecting the appeal are misconceived and unsustainable. Being a quasi-judicial authority, the 2nd respondent could not have relied on any information furnished by the 1st respondent (a respondent in the appeal), behind the back of the petitioner, the appellant; nor could the 2nd respondent have relied upon any material without communicating that information or report to the petitioner and calling for objections thereon. With regard to absence of particulars as to the persons who availed of the facilities of the auditorium and payment of maintenance charges, the 2nd respondent ought in fairness to have directed the petitioner to furnish adequate and fuller particulars as to persons to whom the auditorium was made available on collection of maintenance charges; it could have verified the expenditure incurred and the maintenance charges collected to ascertain whether there is any amount of element of profiteering involved; and only could the 2nd respondent have to come to a conclusion whether activities in the library and the annexed auditorium were charitable or otherwise. The other substantive reason that since hitherto the premises was charged to property tax, it should be charged for all times is an incorrect conclusion. The appeal is preferred against a demand of property tax for a particular year. If on legitimate material available on record and applying the provisions of Section 88 (1) (c) of the 1965 Act, the property in question is liable to be exempted from property tax, for being a charitable institution or a public library, the fact that there was a demand and payment of property tax for earlier years, would not bar the statutory exemption available to the petitioner. For all the aforesaid reasons, the appellate order of the 2nd respondent dated 22-12-2008 is unsustainable and is accordingly quashed. The 2nd respondent is directed to consider the appeal afresh; permit the petitioner to file additional and further particulars to substantiate its claim that the library and annexed auditorium is entitled to the benefits of the provisions of Section 88 (1)© of the 1965 Act and pass a fresh order in accordance with law and by following the due process of law. The writ petition is accordingly allowed. No costs. __________________________ JUSTICE GODA RAGHURAM ____________________________ JUSTICE N. RAVI SHANKAR Dated: 05-09-2011 Pvks/*