CWP No.14463 of 2009 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No.14463 of 2009 Date of decision: 27.07.2010 Bhai Ram Kishan Gurmat Public Senior Secondary School ....Petitioner Versus State of Punjab and others ....Respondents CORAM: HON'BLE MR. JUSTICE VINOD K. SHARMA Present: Mr. N.K. Suneja, Advocate, for the petitioner. Mr. N.S. Virk, Addl. A.G., Punjab, for respondents No.1 and 2. Mr. Pardeep Bajaj, Advocate, for respondents No.3 and 4. ***** VINOD K. SHARMA, J (ORAL) The petitioner has invoked, the writ jurisdiction of this Court to challenge the order of assessment of house tax by the Municipal Corporation, Patiala, being violative of the Government instructions, vide which the educational institutions (aided/unaided) have been exempted from house tax, if they are not running the school with a motive of profit. The brief facts leading to the filing of the writ are, that the petitioner, a charitable institution, is running Bhai Ram Kishan Gurmat Public Senior Secondary School. The school being a charitable institution was granted exemption by the income tax department. The State of Punjab on 15.9.1970, issued notification, exempted educational and religious institutions from payment of house CWP No.14463 of 2009 -2- tax. The notification dated 15.9.1970 reads as under: - “No.8909-GCII-70/22768 Dated: 15.09.1970 It has been brought to the notice of the Government that some Municipal Corporations are issuing notices to the educational and religious Institutions for payment of House Tax. Attention in this behalf is invited to Punjab Government Instructions contained in Punjab Government Letter No.5184-CI/62/283/6 dated 10.07.1962 whereby this institutions are required to be exempted from payment of House Tax. It is therefore requested that instruction issued from time to time should be kept in view while enforcing payment of House Tax with in their respective jurisdiction. The State of Punjab thereafter considered the question of grant of house tax exemption to the private recognised (unaided) affiliated schools vide memo No.2/2899-4-LGIII/1681 dated 14.2.2000. A decision was taken, that in addition to Government colleges, schools and aided schools/colleges enjoying 95% grant-in-aid, the house tax exemption, be also extended to affiliated schools and colleges, which are being run exclusively for the purpose of promoting the cause of education without motive of any monetary gain or commercial angle. In the letter it was clarified, that there would be no blanket exemption but the institutions have to satisfy the municipal authorities, by way of scrutiny of accounts, that the institution is not running with a motive of profit or monetary gain. The instructions issued on 14.2.2000 were further clarified on 14.8.2000, which read as under: - CWP No.14463 of 2009 -3- “In continuation of this office memo No.2/2899-4- LGIII/1681 dated the 14.2.2000, it is hereby clarified that the schools and colleges affiliated with Punjab School Education Board, C.B.S.E., I.C.S.E. and Universities as are being run exclusively for the purpose of promoting the cause of education without motive of any monetary gain or commercial angle shall qualify for exemption.” The case of the petitioner is, that the income tax department's assessment order shows no loss and no profit, therefore, the demand raised by the Municipal Corporation imposing house tax on the petitioner is contrary to the Government instructions and not sustainable in law. On issuance of notice, the petition is contested by the respondents, wherein a preliminary objection has been taken, that the petitioner has a remedy of statutory appeal, therefore, it is not entitled to invoke the extraordinary writ jurisdiction of this Court. This objection is noticed, to be rejected, for the reason that it is not a case where the assessment is being challenged on the ground of legality or illegality, for the appellate Court to decide the validity, but is being challenged to be without jurisdiction, by asserting that the Municipal Corporation has no jurisdiction, to impose any house tax on the unaided recognised school, which is not earning profit. The preliminary objection is liable to be rejected, also for the reason that, before availing the remedy of appeal under the Act, the petitioner will have to deposit the assessed house tax, which otherwise is not payable in view of the Government notification. It is well settled law, that the writ jurisdiction can be invoked, in a given circumstance in the interest of CWP No.14463 of 2009 -4- justice, irrespective of availability of statutory appeal. The learned counsel for the respondents, however, rightly contended, that there can be no blanket exemption. It was for the petitioner to satisfy the municipal authorities by submitting the accounts, that the petitioner is not earning any profit or running its school with profit motive. In view of the notification, before imposing house tax it was obligatory for the Municipal Corporation to issue notice to the petitioner for submitting the accounts, as the school was earlier exempted, from house tax as well as from income tax, being a charitable institution. The learned counsel for the petitioner points out, that objections Annexure P-9/A, were filed with the Municipal Corporation along with statement of accounts showing that the school was not earning any profit and was exempted from tax by Income Tax Department. On consideration, I find force in the contentions raised by the learned counsel for the petitioner. In view of the notifications Annexures P-4 and P-5, the objections filed by the petitioner were required to be adjudicated, and in absence of any finding, that the income tax return, filed by the petitioner was wrong, and that petitioner was running school with profit motive, the Municipal Corporation, could not impose house tax. The writ petition is allowed, the impugned order imposing house tax on the petitioner is quashed. It shall, however, be open to the respondents, to scrutinise the accounts of the petitioner, and in case, it is found, that the school is run CWP No.14463 of 2009 -5- with the motive of profit or monetary gain, then the house tax can be imposed, by passing speaking order. No costs. (Vinod K. Sharma) Judge July 27, 2010 R.S.