THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.3377 OF 2011 DATED 3RD NOVEMEBR, 2011 BETWEEN Dr.P.K. & C.M. Junior College, H.No.14/455, H.B.Street, Kadapa, Kadapa District, Rep. by its Correspondent B.Sivarama Prasad, S/o S.Venkata Krishnaiah, aged 43 years, R/o. Kadapa. … Petitioner And The Kadapa Municipal Corporation, Kadapa, Kadapa District, Rep. by its Commissioner. … Respondent THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.3377 OF 2011 O R D E R (Per Sri Justice Sanjay Kumar) Dr.Pandra Koteswaramma & Chalapathi Memorial Junior College, Kadapa, the petitioner herein, assails the action of the Kadapa Municipal Corporation, Kadapa, the respondent, in demanding property tax to the tune of Rs.10,09,764/- in respect of its College building for the period 1994-95 to 2010-11 under demand notice dated 17.08.2010. Plurality of pleadings in the form of three affidavits on behalf of the petitioner and two counter affidavits from the respondent Corporation reflect the following facts: The premises bearing Door No.15/455, HB Street, Kadapa, was originally owned by one Bandaru Subba Rayudu and assessed to property tax under Assessment No.37503. Proceedings dated 22.12.1995 issued by the Commissioner, Kadapa Municipality, bear out this fact. An aided School by name Sri Sarada Nilayam High School was being run in this premises. The petitioner Junior College started operating in this premises from the year 1981. It is the case of the petitioner College that the School and College were being run in separate portions of the building situated in this premises. After the death of Subba Rayudu, his sons viz., B.Venkata Ramaiah and B.Venkata Krishnaiah partitioned the subject premises along with other properties under registered partition deed No.5366/2004 dated 11.08.2004. Pertinent to note, the Correspondent of the petitioner College is no other than the son of B.Venkata Krishnaiah. It is his case that Sri Sarada Nilayam High School was managed by the Society headed by B.Venkata Ramaiah in the portion of the subject premises that fell to his share in the partition, while the petitioner College was run by a different society in that part of the premises which was apportioned to the share of his father, B.Venkata Krishnaiah. It is also established that B.Venkata Krishnaiah applied for and was granted permission for re-construction of the building situated in the subject premises and pursuant thereto a new building was constructed wherein the petitioner College is presently running. It is also not in dispute that a part of this new building has been let out to M/s.Andhra Bank. According to the respondent Corporation the School is no longer operating from these premises and has been shifted to a different location. It appears that the respondent Corporation issued a demand notice to the School calling upon it to pay property tax. Aggrieved thereby, the School filed W.P.No.4553 of 2007 which was disposed of by a Division Bench of this Court by order dated 06.03.2007 permitting it to file a representation before the respondent Corporation claiming exemption from payment of property tax in terms of the Full Bench Judgment in W.P.No.4214 of 2006 and Batch and the respondent Corporation was directed to consider the same and pass appropriate orders and till then, not to give effect to the impugned demand notice. It is the case of the petitioner College that pursuant to the aforesaid order, B.Venkata Ramaiah, the Correspondent of the School, submitted representation dated 22.03.2007 to the respondent Corporation and no orders have been passed thereon till date. Having failed in its endeavour to extract property tax from the School, the petitioner College alleges that the respondent Corporation turned its attention upon it and issued the impugned demand notice dated 17.08.2010. The details pertaining to the demand under this notice as set out by the respondent Corporation in its letter dated 27.08.2010 demonstrate that property tax was proposed to be collected for entire premises for the period 1994-95 upto 2010-11 (first half). This demand pertained to Assessment No.1013016779 and the owner’s name as shown therein included both the School as well as the petitioner College. It is the case of the petitioner College that this demand notice is illegal on grounds more than one. It is its claim that it is entitled to exemption from payment of property tax under Section 202 of the Greater Hyderabad Municipal Corporation Act, 1955 (for brevity, ‘the Act of 1955’). It also assails the impugned notice on the ground that it is vitiated by the law of limitation as the respondent Corporation was seeking to collect time barred arrears of tax thereunder. On the other hand, the respondent Corporation claims that the School and the petitioner College operated from the same building on a shift system and was assessed under the single Assessment No.1013016779. According to it, after construction of the new building, the petitioner College was operating therefrom without obtaining the requisite occupancy certificate. Alleging that there was a transfer of title in this regard, the respondent Corporation, relying upon the provisions of Sections 207, 209, 210 and 211 of the Act of 1955, sought to justify its demand of property tax from the petitioner College. The respondent Corporation further pointed out that the exemption permitted under Section 202(1)(bb) of the Act of 1955 would not be available to the petitioner College as such exemption was only to be extended to educational institutions serving the cause of primary education. As regards the assessment to property tax under one single number, the respondent Corporation averred that the premises along with the buildings stood jointly in the names of Sri Sarada Nilayam High School and Dr.Pandra Koteswaramma and Chalapathi Memorial Junior College from the year 1994 to 2006-07 and it was only after construction of the new building that the assessment of the petitioner college was taken up under a different number. The facts aforestated reflect that full and complete information is not placed before this Court to undertake a comprehensive adjudication of the dispute basing on the respective stands taken by the parties. Though the succession of title as regards the subject property has been brought out in some detail, it is not clear as to how the societies which are said to be running the two educational institutions came into possession of the subject premises. Under the registered partition deed dated 11.08.2004, the sons of B.Subba Rayudu became the owners of their respective shares in the subject property. If they formed educational societies for the purpose of imparting education and parted with possession of their respective shares in the subject premises, the nature of that transaction would be of relevance and importance. No document in this regard has been placed on record. That apart, the division of the subject premises between the two educational institutions is not established. The petitioner College asserts that the two educational institutions were run in separate portions of the building situated in the premises while the respondent Corporation disputes the same. On the one hand, it admits that there may be two buildings in the subject premises but on the other, it claims that the educational institutions were being run on shift system. With regard to the limitation aspect, it is the case of the petitioner College that in the light of Section 238 of the Act of 1955 read with the Division Bench Judgment of this Court in C.E.COOPER V/s. MUNICIPAL COMMISSIONER OF HYDERABAD[1], the impugned demand notice dated 17.08.2010 is unsustainable on the ground of limitation. The respondent Corporation however did not choose to address this aspect in clear terms. In so far as the applicability of the exemption provisions under the Act of 1955 are concerned, it is the case of the petitioner College that it would be entitled to such exemption under Section 202 of the Act of 1955. The respondent Corporation however sought to deny the petitioner College exemption under Section 202(1)(bb) of the Act of 1955 on the ground that it is not an educational institution serving the cause of primary education. Though Section 202(1)(bb) of the Act of 1955 has no application to the petitioner College, it would still be entitled to claim exemption under the other provisions of the Section. Pertinent to note, Section 202(1)(b) entitles buildings and lands or portions thereof occupied and solely used for a charitable purpose to claim exemption from the levy of general tax in respect of buildings and lands. However, as stated supra, the petitioner College has not placed before this Court any material to show that the subject premises are being used solely for charitable purposes. Relevant to note, imparting of education with a profit motive would not qualify as a charitable purpose [MUNICIPAL CORPORATION OF DELHI V/s. CHILDREN BOOK TRUST[2]]. Further, it is an admitted fact that a portion of the newly constructed building has been let out to M/s.Andhra Bank. In terms of Section 202(2) and (3) of the Act of 1955, such portion which has been let out for rent would have to be excluded and would be deemed to be a separate property for the purpose of municipal taxation. Reference in this regard may also be made to the Judgment of the Supreme Court in INDIAN RED CROSS SOCIETY V/s. NEW DELHI MUNICIPAL COMMITTEE[3], wherein it was observed that statutory exemption from payment of property tax extended to charitable organizations would not be available if the building was not self-occupied but was rented out by such organization. The Court observed that the phrase ‘for a charitable purpose’ only qualifies self-occupation and the same would not be available in respect of any portion of land or building from which rent is derived even if such rent is thereafter used for charitable purposes. It is therefore for the petitioner to establish that its building and land or portions thereof are solely occupied and used for a charitable purpose by adducing necessary evidence before the authority concerned. The authority would be entitled to verify whether a portion of the petitioner College’s land or building is let out for rent and thereafter determine whether the petitioner College is entitled to claim exemption under Section 202 of the Act of 1955 in respect of the remaining land and buildings and if so, to what extent. The Writ Petition is accordingly disposed of permitting the petitioner College to make a detailed representation to the respondent Corporation setting out the grounds whereby it claims exemption under Section 202 of the Act of 1955 and to what extent, along with supporting documentation, within a period of four (4) weeks from the date of receipt of a copy of this order. The petitioner shall set out its objections in the context of the law of limitation. The respondent Corporation shall thereupon consider the petitioner’s representation in accordance with law and pass appropriate orders. The respondent Corporation shall also examine the petitioner College’s claim that the subject premises were separately shared by the two educational institutions and that it cannot be made liable and responsible for payment of property tax for the entire extent of the premises. This exercise shall be completed by the respondent Corporation expeditiously and preferably within two (2) months from the date of receipt of the petitioner College’s representation. Pending this exercise, the respondent Corporation shall not give effect to the impugned demand notice. In the circumstances, there shall be no order as to costs. ______________ V.V.S.RAO, J. ____________________ SANJAY KUMAR, J. 3RD NOVEMBER, 2011. PGS [1] 1997(3) ALD 771 (DB) [2] AIR 1992 SC 1456 [3] (2003) 5 SCC 545