Indian Express 25.10.2010
‘No property tax on pvt schools’
Express News Service Tags : Punjab and Haryana High Court, Justice Vinod Kumar Sharma Posted: Mon Oct 25 2010, 01:36 hrs
Chandigarh: In a major blow to the UT Administration, the Punjab and Haryana High Court has quashed the property tax imposed on all private schools in Chandigarh. In his detailed judgment, Justice Vinod Kumar Sharma has held that “the notification fixing property tax on institutional lands is quashed being beyond the powers of the Administrator, and consequently, the notices issued demanding tax from the petitioners are also ordered to be quashed as the UT Administrator had no jurisdiction to frame by-laws”.HC has further held that “it is the Municipal Corporation, which can impose tax on the lands and buildings” and not the Administrator and that in the “present case there is no tax imposed by the Municipal Corporation, Chandigarh”. The judgment further reads: “Powers to frame by-laws can be exercised by the MC alone and not by the government/Administrator. The government/Administrator can only modify and publish the by-laws so framed, but the notification is required to record that the by-laws are framed by the MC. While fixing the rate of tax it is not open to the government/Administrator to include the properties/lands, which have not been taxed by the Municipal Corporation.”
However, it has been made clear that the resolution passed by the MC on January 29, 2003 as also the fixing of rate of properties covered under the resolution of the MC, Chandigarh, have been upheld by the High Court. The directions have been passed over a bunch of 23 petitions filed by various private schools in Chandigarh challenging the imposition of property tax by the Administrator. The counsel appearing for private schools had submitted that the Administration, by illegally inserting the word “institution” by way of advertisements in newspapers, had imposed the Municipal (Land Building) tax on the private schools since 2004. The petitioners contended that the word “institution” has not been defined in the Municipal Corporation Act and that it was the Corporation only, which was entitled to impose tax and not the Administrator who did so.
On the other hand, senior standing counsel for UT Administration Sanjay Kaushal had submitted that while discussing the word “commercial”, institutions like the petitioners were under consideration by the Municipal Corporation. Finding force in the submissions of the petitioners, Justice Sharma held: “In case the Administrator was not satisfied with the resolution, the procedure was required to be followed, directing the Municipal Corporation, Chandigarh to impose tax on institutions/institution lands. Having not done so, it was not open to impose property tax by framing by-laws as these are not source of imposition of tax. By-laws can be framed to regulate the procedure for imposition of tax, which cannot override the basic resolution passed by the MC.”
