Annamalai University vs Commissioner, Corporation of Chennai

A. Raman, J.—Challenging the order dated 27-12-1999, passed by the Commissioner, Corporation of Chennai, rejecting the request for

exemption from payment of property tax for the basement and ground floor of the building at Door No. 18-13, Rukmini Lakshmipathi Road,

Division-106, Chennai. the present writ petition is filed.

The petitioner/University is offering Distance Education Programme with study centres in various cities. They have a study centre in Chennai

City. It is housed in their own building at Door No. 19-A3, Rukmini Lakshmipathi Road, Egmore, Chennai-8. According to the petitioner, the

study centres owned and administered by the petitioner and are used exclusively for the purpose of imparting education to the students enrolled in

the correspondence course. The facilities made available by the petitioner are

(i) Library

(ii) Audio Lecture Cassettes

(iii) Video Lecture Cassettes

(iv) Previous Year Question Papers

(v) Printed Lesson Units

(vi) Spot admission and

(vii) Spot supply of study materials

Those activities do not involve any commercial consideration. The centres are opened to offer academic and administrative guidance to students.

Periodical classes are held in the respective study centres and professors serving in colleges and superannuated members of the faculties are

drafted for the purpose of delivering lectures. In such circumstances, the petitioner submits that the building is one exempted from taxation as

provided in Section 101(c) of Chennai City Municipal Corporation Act and therefore, the writ petition.

The proceedings of the Commissioner, Corporation of Chennai. shows that the first, second and third floor of the building at Door No. 19-A3.

Rukmini Lakshmipathi Street, have been exempted from payment of property tax on the ground that contact classes are conducted in those floors.

But, as regards the basement floor and ground floor, it is stated that the nature of usage and activities are such that they do not attract the

provisions of Section 101(c) of the Act, since they have been occupied for the purpose of office and therefore, those floors viz., basement and

ground floors cannot be exempted from payment of tax.

In other words, the Corporation concedes that contact classes are run in a part of the building and therefore, part of the building is exempted.

But, they contend that since two floors viz., the ground and basement floor are occupied for the purpose of office, they cannot come under the

purview of exemption under Seclion 101 of the Act.

I am unable to accept or appreciate the stand taken by the corporation. It is not in dispute that the Distant Education Centre of the Annamalal

University is located in the said building, where contact classes are held for the benefit of students, who have enrolled themselves for the

correspondence courses. It is not the stand of the corporation that any part of the building is used for any other purpose or commercial activity.

According to the petitioner the ground and basement floors are used as office for the centre, where there is a counter for collection of fees and

where study materials are kept. According to him, there is a rest room for the lecturers and professors, who come to the study centres for the

purpose of delivering lectures and there is a toilet facility provided and thus the ground and basement floors are only used for the purpose of

holding contact classes for the correspondence courses run under Distance Education Scheme by the University.

In fact, in the proceeding, it is admitted that the University has its office in the ground and basement floor. In other words, it is contained in the

very order, which is impugned that the ground and first floor are used as office which in turn is for the purpose of running on the contact classes in

the building as a part of the Distance Education Programme of the petitioner/University. Therefore, the ground and basement floor are only used

with reference to and for the purpose of imparting education to those, who are enrolled in the correspondence courses, run by the University as a

part of its Distance Education Programme. Therefore, the purpose and object forwhich the office is used, is only complementary and subservient to

the main object viz., the imparting of education to those who have enrolled th''em-selves in the correspondence courses, which is but part of the

Distance Education Programme, launched by Annamalai University.

If contact classes are held in three floors, naturally, a number of students would come to participate and have the benefit of lectures. Thus, there

will be a gathering of students for the purpose of persuing their educational career. To impart the education, necessarily, certain number of

lecturers, and professors whether in service or retired have to come there and gather in numbers, for the studies and for the lectures, there is a

necessity to provide some sort of recreation hall with toilet facility. For the students, who are attending the contact classes, reading materials have

to be provided and those reading materials have to be kept in some part of the premises. Where the students gather for the said purposes,

necessarily, there must be a office which has to be located in that building. When contact classes are held, where number of students gather, it

becomes necessary to have an office for the purpose of monitoring the timing, supervising the programmes, collection of fee from the students and

for contacting the University at Chidambaram. Therefore, in such circumstances, necessarily they have an office, which must also be located only in

the same building. Therefore, if a part of the building is used for the purposes of having such an office for providing facility to the staff and the

students and for having a godown for keeping the study materials, such part of the building would only be a part of the larger building and tt cannot

be treated as a separate building, or a different building. It is only for the purposes of running classes for the benefit of students, who have joined in

correspondence courses. The two floors are used only for the purpose of providing facility and convenience to the students and lecturers and for

the ultimate goal of imparting education. They are there to feed the purpose of imparting education and thus essential and integral parts without

which the purpose cannot be achieved.

The Apex Court had an occasion to consider a, similar question though related to a factory in the decision reported in State of Punjab and

Another Vs. British India Corporation Ltd., that building fulfilling the requirements of factory law and building used towards securing welfare of

workmen employed in the factory and all such buildings used for the purpose of a factory and therefore, would be entitled to exemption. There the

building consisted of a set of rooms used for indoor games by the mill employees, one big hall used as the Gurkha Guards Club, a set of rooms

used as officers'' club, a set of rooms used as a residential quarters by workers of the mills and a unit of 200 quarters which had been allotted to

workers of the factory for their occupation. The Apex Court held that these buildings are for the use of workmen and for a purpose which was

necessary for the efficiency of the workmen and thus, the bull dings were being used for the purpose of factory and hence, they were entitled to

exemption.

Here, it is clear that the basement and ground floor are used for the purpose of education and therefore, it would squarely fall within the

exemption under the Act. The ground and the basement floor are parts of the same building and are necessary for the purpose of efficiency and for

effective running of the contact classes and therefore, these two floors have to be held as parts of the building used for the purpose of Distance

Education Programme and therefore, they are entitled to exemption from property tax under the Act.

Hence, in such circumstances, I hold that the order passed by the authority is illegal, void and unreasonable and against the provisions of

Section 101(c) of the Act. The two floors would squarely fall under the general exemption available to the building used for the purpose of

education and hence, the order passed by the authority is liable to be set aside.

In the result, this writ petition is allowed, quashing the order passed by the authorities on 27-12-1999. Consequently, the respondenl is

directed to grant exemption to the entire building situate in Door No. 19-A3, Rukmini Lukshamipathi Street, Egmore, Chennai-8. Including the

ground and basement floor, from payment of property tax u/s 101(c) of the Act. As a consequence, W. M. P. No. 3562 of 2000 will stand

dismissed.