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1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ON THE 31ST DAY OF OCTOBER, 2018
BEFORE
THE HON'BLE MR. JUSTICE RAVI MALIMATH
WRIT PETITION NO.14394 OF 2010 (LB-RES)
BETWEEN:
CHANTHARU GRAMA PANCHAYATH P.O. BRAHMAVAR-576213, UDUPI DISTRICT REPRESENTED BY ITS PANCHAYATH DEVELOPMENT OFFICER, SRI SURESH, SON OF J.R.KUMAR, AGED ABOUT 48 YEARS, AS PER ORDER DATED 12.12.2014 ... PETITIONER
(BY SRI MANJUNATH K, ADVOCATE FOR SRI T MOHANDAS SHETTY, ADVOCATE)
AND:
PRIORITY EDUCATIONAL FOUNDATION PRIORITY HIGHLANDS, CHANTHAR VILLAGE, BRAHMAVAR, UDUPI DISTRICT, REPRESENTED BY ITS MANAGING TRUSTEE, MATHEW C NINAN.
THE CHIEF EXECUTIVE OFFICER ZILLA PANCHAYATH UDUPI, UDUPI DISTRICT.
THE STATE OF KARNATAKA BY ITS SECRETARY TO GOVERNMENT REVENUE DEPARTMENT VIDHANA SOUDHA, BENGALURU -560 001. ... RESPONDENTS
(BY SRI K PRASAD HEGDE, ADVOCATE FOR R1, SRI B.P.RADHA, AGA FOR R3 R2 SERVED AND UNREPRESENTED)
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER PASSED BY THE 2ND RESPONDENT IN APPEAL NO.61 OF 2007-08 VIDE DATED 10.12.2009 VIDE ANNEXURE-E ETC.
***** THIS WRIT PETITION COMING ON FOR HEARING THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
The case of the petitioner is that the first respondent is running educational institutions at Chantar Village, Bramhavar, Udupi Taluk and District, which falls within the jurisdiction of the petitioner–Chantharu Grama Panchayath. That the first respondent is an unaided institution. That within the campus of the first respondent building, there are number of buildings such as School
3 building, office building, seminar hall, hospital, watchmen shed, post office, bank building, library building, laboratory building, boys hostel building, girls hostel building, old boys hostel, mess hall, coconut go-down, bus shelter, etc. That the first respondent is also running an unaided English Medium School providing education to the local people.
That the petitioner–Grama Panchayat is collecting taxes as per Karnataka Panchayat (Grama Panchayat Tax and Fees) Rules 1994, for the buildings within their jurisdiction. That the Government of Karnataka has framed Guidelines explaining the method for collecting the taxes for buildings within the jurisdiction of the Grama Panchayat and has issued a Notification dated 24.05.2002, to the said effect. On the basis of the said Notification the petitioner measured the building of the first respondent and assessed them to pay the tax. The tax was calculated and demanded.
4 3. Aggrieved by the same, the first respondent preferred an appeal before the second respondent - Chief Executive Officer Zilla Panchayat, Udupi. The second respondent held that the first respondent is exempt from payment of Building Tax to some of the buildings in its campus, under its ownership. Aggrieved by the said order, the present petition is filed.
Sri.Manjunatha.K, learned counsel for the petitioner contends that the order passed by the second respondent is erroneous. That a number of buildings come within the jurisdiction of the first respondent. Therefore, the exemption claimed by the first respondent is inappropriate. That there are various buildings in the campus of the first respondent such as seminar hall, hospital, watchmen shed, mess hall, coconut go-down, bus shelter, etc. That a part of the building is also let-out to Syndicate Bank. Therefore, the question of exempting the first respondent from payment of Building Tax is inappropriate.
Sri.K.Prasad Hegde, learned counsel for the first respondent disputes the aforesaid contention through the statement of objections. He contends that there is an exemption granted to the first respondent as contemplated under the Karnataka Panchayat Raj (Grama Panchayat Tax and Fees) Rules, 1994. That in terms of Rule-6 of the said Rules, the buildings and lands used solely for charitable or public religious purposes and not let out for rent, shall be exempt from levy of tax under Sections-10(23C)(vi) of the Income tax Act.
In support of the said contention that the first respondent it is a charitable institution, Annexure-R2, which is an approval of the Chief Commissioner of Income tax, that exemption is granted to the first respondent on the basis that it is a charitable institution, has been produced.
It is the further contention of the learned counsel for the petitioner that only a part of the building is
6 used for charitable purpose, has been exempt from levy of tax. However, the remaining building do attract levy of tax, which the first respondent has been paying regularly.
On hearing learned counsels, I’am of the considered view that there is no merit in the writ petition. The exemption sought for by the first respondent is established by the order of approval by the Chief Commissioner of Income tax, vide Annexure-R2. The same would indicate that the first respondent is granted exemption to pay the Income Tax, on the ground that it is a charitable institution. That charitable institutions are exempt from levy of income tax in terms of Rule-6 of the aforesaid Rules.
Furthermore, it is not in dispute that the exemption is not sought for all the buildings in the campus of the first respondent. It is only with regard to part of the property, which are solely used for charitable purpose. The rest of the buildings namely, the part of the building let-
7 out to syndicate bank, etc. would attract regular levy of building tax, which the first respondent has paid tax regularly to the petitioner. Therefore, it is inappropriate to conclude that the exemption granted to a part of the building of the first respondent is erroneous.
The second respondent-Chief Executive Officer Zilla Panchayat, Udupi, having considered these aspects has rightly passed the impugned order. I do not find any error that calls for interference. Consequently, the writ petition being devoid of merit is dismissed.
Rule discharged.
SD/- JUDGE