OSHWAL SHIKSHAN & RAHAT SANGH (BHARAT) vs. STATE OF GUJARAT THR' SECRETARY

C/SCA/14756/2006 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 14756 of 2006

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE K.J. THAKER

====================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ====================================== OSHWAL SHIKSHAN & RAHAT SANGH (BHARAT)....Petitioner(s) Versus STATE OF GUJARAT THR' SECRETARY & 1....Respondent(s) ====================================== Appearance: M/S THAKKAR ASSOC., ADVOCATE for the Petitioner(s) No. 1 MR JAIMIN GANDHI, AGP for the Respondent(s) No. 1 MR AR THACKER, ADVOCATE for the Respondent(s) No. 2 ====================================== CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE K.J. THAKER

Date : 04/07/2014

ORAL JUDGMENT Page 1 of 5

C/SCA/14756/2006 JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1. By way of this petition under Article 226 of the Constitution of India the petitioner-Oshwal Shikshan & Rahat Sangh (Bharat) has prayed for an appropriate writ, order or direction quashing and setting aside the order dated 07/08/2004 made by the respondent-Corporation and the order dated 12/06/2006 made by respondent no. 1. 2. It is the case on behalf of the petitioner that the petitioner is a trust registered under the Bombay Public Trust Act and is engaged in providing charitable services in the field of education and relief. It is the case on behalf of the petitioner that the petitioner is a trust running Primary School at Jamnagar, which also has boys and girls boarding / hostel for students. The trust also owns the Oshwal Center and Atithi Gruh at Jamnagar. It is the case on behalf of the petitioner that the petitioner-trust has been granted exemption from tax under the provisions of Section 80G of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). It is the case on behalf of the petitioner that as such in the year 1972 Resolution No.330 was passed and property of the trust was exempted from property tax by the Jamnagar Municipality. Thereafter after conversion of the Jamnagar Municipality into Corporation in the year 1991, the respondent-Corporation also granted the exemption. Thereafter, in the year 2003, the respondent-Corporation issued the demand notice to the petitioner-trust calling upon the petitioner to pay the property tax, education, cess and cleaning tax for the period between 11/04/2000 to 31/03/2003. The petitioner made detailed representation to the respondent-Corporation submitting that the petitioner would not be liable to pay the property tax. It Page 2 of 5

C/SCA/14756/2006 JUDGMENT was submitted on behalf of the petitioner that the petitioner- trust is exempted from payment of tax under Section 132(1) (b) of the Gujarat Provincial Municipal Corporation Act, 1949. By order dated 07/08/2004 the Assistant Commissioner (Tax) passed the impugned order rejecting the representation of the petitioner for grant of exemption. 3. Being aggrieved and dissatisfied with the order passed by the Assistant Commissioner (Tax) rejecting the representation / application of the petitioner for grant of exemption from payment of general property tax etc., the petitioner preferred Revision Application before the State Government and by impugned order dated 18/10/2005 the revisional authority has dismissed the Revision Application by specifically observing that it cannot be said the disputed property in question is exclusively used for charitable purpose. On considering the books of accounts etc., it was found by the revisional authority that the petitioner-trust is a profit making trust. Being aggrieved and dissatisfied with the impugned orders, the petitioner has preferred the present Special Civil Application under Articles 226 and 227 of the Constitution of India. 4. At the outset, it is required to be noted that as such Mrs. Pahwa, learned advocate appearing on behalf of the petitioner is not disputing and/or not in a position to dispute that as such the petitioner-trust is having the income from the disputed property in question by recovering the rent and getting the income out of the same. However, it is submitted by Mrs. Pahwa, learned advocate appearing on behalf of the petitioner that whatever the income, ,which is received by the petitioner, cannot be said to be an income out of rent but it can be said to Page 3 of 5

C/SCA/14756/2006 JUDGMENT be an income as license fees and, therefore, it is submitted that in view of the above and considering Section 132(2)(b) of the Act as the petitioner trust is a religious and charitable trust, the petitioner shall be entitled to exemption from payment of general tax etc. No other submissions have been made. 5. Shri Avinash Thaker, learned advocate appearing on behalf of the respondent-Corporation has pointed out that as such out of the property in question, the petitioner-trust is charging huge sum for the purpose other than religious and/or charitable purpose. It is submitted that the property in question is being given to the public at large for the purpose of marriage parties etc. It is submitted that therefore without further entering into the larger question, whether the aforesaid income can be said to be rent and/or the license fees, looking to the object and purpose of grant of exemption and considering Section 132(2) (b) of the Act, the petitioner is rightly denied exemption from payment of general tax. Making the above submission, it is requested to dismiss the present Special Civil Application. 6. Heard the learned advocates appearing on behalf of the respective parties at length. At the outset, it is required to be noted that as such there are concurrent findings of fact given by both the authorities below that the property in question is being used by the petitioner – trust for the purpose other than religious and charitable purpose and is recovering huge amount by way rent / lease and/or or by any other mode i.e. for the purpose of marriage parties etc. The finding is also recorded by the revisional authority that considering the books Page 4 of 5

C/SCA/14756/2006 JUDGMENT of account of the petitioner-trust it appears that that the petitioner - trust is making huge profit out of the property in question. Considering the aforesaid disputed facts and circumstances of the case and considering the object and purpose of granting exemption, more particularly, considering Section 132(1)(b) of the Bombay Provincial Municipal Corporation Act and now Gujarat Provincial Municipal Corporation Act, the petitioner is rightly denied exemption of payment from general tax. The decision of the Assistant Commissioner (Tax), further confirmed by the revisional authority, is absolutely in consonance with the provisions of the Act, more particularly, Section 132(2) of Act and we see no reason to interfere with the same. In the facts and circumstances of the case and considering the activities of the petitioner of giving the property to other persons for the purpose of marriage parties etc. it cannot be said to be solely for religious and/or chargeable purpose and, therefore, the petitioner is not entitled to any exemption as claimed. 7. In view of the above and for the reasons stated hereinabove, there is no substance in the present petition and the same deserves to be dismissed and is dismissed accordingly. Rule is discharged. No order as to costs. (M.R. SHAH, J.) (K.J. THAKER, J.) Siji Page 5 of 5