IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 30.07.2010 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.No.4474 of 2009 and M.P.Nos.1 and 2 of 2009 Marudhar Kesari Jain College for Women, rep. By its Secretary, Marudhar Nagar Vaniyambadi 635 751 Vellore District. ... Petitioner Vs. 1.Government of Tamilnadu, Rep. By its Secretary to the Government, Special Commissioner, Rural Development and Panchayat Raj Department, Secretariat, Chennai – 600 009. 2.The President, Chinnakallupalli Panchayat, Jolarpettai Union, Vellore District. ...Respondents Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of a writ of Certiorarified mandamus, calling for the records relating to proceedings/letter dated 02.03.2009 on the file of the second respondent in respect of levy, demand and collection of house tax for the Assessment Years 2007-08 and 2008-09 in respect of the petitioner college and quash the same and forbear the respondents from levying, demanding and collecting house tax in respect of the petitioner college, as hitherto before. For Petitioner : Mr.K.Shakespeare For Respondents : Mr.P.S.Raman, Advocate General Assisted by Mr.M.Dhandapani, Spl.G.P. For R1 O R D E R This writ petition came to be posted before this Court on being specially ordered by the Hon’ble Chief Justice vide order dated 21.07.2010. https://hcservices.ecourts.gov.in/hcservices/ 2. Heard the learned counsel for the petitioner and Mr.P.S.Raman, learned Advocate General assisted by Mr.M.Dhandapani, learned Special Government Pleader for the first respondent. 3. The petitioner is a women's college situated under the second respondent Panchayat viz.,Chinnakallupallai. They have come forward to challenge the demand for house tax from the second respondent Panchayat vide proceedings dated 02.03.2009 for the year 2007-08 and 2008-09. Reliance was placed upon the Government Order issued in G.O.Ms.No.38 Rural Development and Panchayat Raj (PRJ) dated 5th March 2008 and the subsequent circular issued by the Special Commissioner and Secretary to Government dated 25.03.2008. 4. While the Government Order itself is not under challenge, the contention raised by the learned counsel for the petitioner is two-fold. The Government Order itself is under Challenge by an Association of Management of Private Colleges in W.P.No.21539 of 2008 and therefore, the Village Panchayat cannot be allowed to proceed with the demand for taxation. The second contention that the Government Order has been made applicable only from 05.03.2008 and therefore any demand for the previous years is not valid. 5. Further inspiration was also drawn from the judgment of a Division Bench of this Court in Sriram Educational Trust, represented by its Chairman v. The President, 89, Perumalpattu Panchayat Union, Thiruvallur Taluk and District reported in 2008 (1) CTC 449. The contention based upon the Judgment of the Division Bench is no longer available in the light of the decision of the Full Bench of this Court in The President, K.Vellakulam Panchayat, Kallikudi Chatram, Madurai District v. Kamaraj College of Engineering and Technology, Managing Board, rep. By its Secretary, S.P.G.C.Srimurugan reported in 2009 (5) CTC 289. The Full Bench considered the constitutional power of the Panchayat to levy tax. In paragraphs 13, 17 and 18, it was held as follows: "13). From the aforesaid constitutional provisions and State enactments, while it will be evident that Parliament, with a view to empower the Village Panchayat to have its own financial resources, inserted Article 243-H empowering the State Government to legislate authorizing a Panchayat to levy and collect appropriate taxes, duties, tolls and fees in accordance with the procedure prescribed by the State; the State of Tamil Nadu, in terms with Article 243-H empowered the Village Panchayat to levy house tax. Under sub-section (1) of Section 171, the Village Panchayats have been mandated to levy such house tax on all houses in every Panchayat Village. Under Section 176 while it has been mandated not to grant any exemption from payment of surcharge or tax specified under Section 168 or 171, the https://hcservices.ecourts.gov.in/hcservices/ Panchayats have been empowered to grant such exemption only in accordance with the Rules as prescribed by the State. Therefore, it is the Panchayat which has the authority to decide whether it will grant exemption or not and if it so decides to grant exemption from payment of tax under Section 171 it requires to follow the procedure as prescribed under the rules. In view of the aforesaid provision of Article 243- H and Section 171(1) r/w Sections 172 and 176, the State Government cannot force the Panchayat to grant exemption of tax to one or other category of person or building 17). We have already noticed that Rule 15 is a subordinate legislation which cannot override the substantive provisions of the Act such as Sections 171(1), 172 and 176. Section 171(1) mandates the Village Panchayat to levy house tax on all the houses of the Village Panchayat. The mandate is also clear from Section 172, wherein the basis of levy of house tax has been prescribed. There is a prohibition from grant of exemption of surcharge or tax under Section 176 except in accordance with the rules. Therefore, if Rule 15 is read with the aforesaid Sections 171,172 and 176, it is to be held that under Rule 15 it is not mandatory to grant exemption from house tax, but is an enabling provision allowing the Village Panchayat to grant exemption to a class of buildings as specified therein, if it so chooses. Rule 15 cannot be held to be mandatory to exempt class of buildings from payment of house tax, which otherwise will run counter to Sections 171, 172 and 176 of the Act and may render Rule 15 ultra vires. Therefore, the word "shall" used in Rule 15 has to be read as "may" to give effect to the said rule of exemption. 18). We accordingly, hold that the exemption prescribed under Rule 15 is not mandatory and is an enabling provision empowering the Village Panchayat or Panchayat Union to grant exemption to a class of buildings as specified therein. The corollary is that it is open for the Village Panchayat or Panchayat Union not to grant such exemption in favour of one or other class of such buildings. The Court cannot force the Panchayat to exercise its discretionary power to grant exemption to one or other class of buildings in absence of any decision taken by the Village Panchayat or Panchayat Union to grant such exemption. Once a Village Panchayat or Panchayat Union takes a https://hcservices.ecourts.gov.in/hcservices/ decision to grant exemption in favour of one or other class of buildings, only in that case no discrimination can be made between two similarly situated persons and no order can be passed in an arbitrary manner." (Emphasis added) 6. Further reliance is placed upon the writ petition filed by the association to which the petitioner college allegedly has its membership also cannot be countenanced since that writ petition was also dismissed by an order dated 30.07.2010 and all the contentions raised therein have been rejected. The amendment to the Rules have been found to be intra vires of the Tamil Nadu Panchayat Act and the Constitution. Further, the argument that the Government Order has prospective effect has got no meaning as they have always been subjected to taxation by the panchayat. The only relief if at all came to their rescue was the Judgment of the Division Bench in Sriram Educational Trust's case (cited supra) which ratio is no longer in force. 7. In fact an identical question was considered by another learned judge of this Court in Kamalakshi Pandyurangan College of Pharmacy, rep. By its Secretary and Correspondent, R.Parimala Chandran v. The President, Ayyampalayam Village Panchayat reported in 2008 (4) CTC 715. Even though the learned Judge did not have the benefit of the decision of the Full Bench, in paragraphs 26 and 27, arrived at the correct conclusion in respect of the self- financing institutions, which is as follows: "26.In my considered opinion, this is the only interpretation which could advance the object of the Act. The object of exemption is to exempt the buildings which are run by the Government, local bodies, run on Government aid and public buildings used for certain purposes. Though, the conjunction "and" found between words ‘hostels’ and ‘libraries’ in the old Rule 15(c) was interpreted by the Division Bench as a "disjunctive", now in view of the third proviso added to the newly introduced Rule 15(c), the said word "and" cannot be interpreted as a disjunctive and the same should be interpreted as "conjunctive". So, to put it in nutshell, as per the present Rule 15(c), the following buildings alone are exempted from house tax:- (i)Buildings used for educational purposes including hostels and libraries run by the Government; (ii)Buildings used for educational purposes including hostels and libraries run by local bodies; https://hcservices.ecourts.gov.in/hcservices/ (iii)Buildings used for educational purposes including hostels and libraries run by institutions aided by the Government which do not conduct self financing unaided courses. (iv)Buildings used for charitable purposes of sheltering the destitutes or animals. 27.In this case, since the petitioners’ Institutions are not aided institutions and they are conducting self financing unaided courses, though the buildings are used for educational purposes, they do not fall under any of the categories enumerated in Rule 15(c) of the present rule and so, they cannot claim exemption from house tax. I hold that the buildings used by the petitioners’ Institutions are liable for house tax and thus, the impugned notices do not require any interference at the hands of this Court." (Emphasis added) 8. In the light of the above, no case is made out by the petitioner. Accordingly, the writ petition stands dismissed. Consequently, connected miscellaneous petitions will also stand dismissed. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar svki To 1. Special Commissioner, The Secretary to the Government, Government of Tamilnadu, Rural Development and Panchayat Raj Department, Secretariat, Chennai – 600 009. 2.The President, Chinnakallupalli Panchayat, Jolarpettai Union, Vellore District. W.P.No.4474 of 2009 jp(co) pmk.5.8.2010. https://hcservices.ecourts.gov.in/hcservices/