Vignan Educational Society vs Khammam Municipality, Khammam,

Mr. Koushik Kanduri, learned counsel represents Mr. N. Sreedhar Reddy, learned counsel for the petitioner.

Mr. P. Sridhar Rao, learned Standing Counsel for the respondent-Khammam Municipality.

In this writ petition, the petitioner has assailed the validity of the demand notice dated 17.12.2007 by which a sum of Rs.1,72,734/- has been demanded from the petitioner on account of arrears of property tax and the impugned order dated 04.12.2007 rejecting the representation dated 20.11.2007 of the petitioner.

Facts giving rise to filing of this writ petition briefly stated are that the petitioner is an Educational Society registered under the provisions of the Societies Registration Act, 1860. The petitioner Society has established a Degree College in the name and style of “D.R.S. Degree College” in Mamillagudem, Khammam. The said college is recognized by the Government of Andhra Pradesh and is affiliated to Kakatiya University. The college is run by the petitioner Society in a building owned by it situated in Mamillagudem, Khammam.

The respondent, namely, Khammam Municipality issued a demand notice dated 25.10.2006 by which a sum of Rs.90,674/- was demanded from the petitioner on account of property tax. The petitioner submitted a representation seeking exemption of payment of property tax. However, the representation submitted by the petitioner failed to evoke any response. Thereupon, the petitioner filed W.P.No.25042 of 2007 to set aside the demand notice dated 25.10.2006 issued by the respondent Municipality. The said writ petition was disposed of by a Division Bench of this Court by order dated 27.11.2007 directing the respondent therein to consider the representation dated 20.11.2007 submitted by the petitioner within a period of two weeks and till such time, the respondent is restrained from taking any coercive action against the petitioner. Thereafter, by the impugned order dated 04.12.2007, the representation submitted by the petitioner had been rejected. In the aforesaid factual background, this writ petition is filed. A Division Bench of this Court by order dated 04.04.2008 had entertained the writ petition and granted interim order.

We have heard the learned counsel for the parties at length and perused the record.

Section 88 of the Andhra Pradesh Municipalities Act, 1965 (hereinafter referred to as “the Act”) deals with general exemption. Section 88(1)(c) of the Act prior to its substitution reads as follows:

“88. General exemptions:- (1) The following buildings and lands shall be exempt from the property tax:-

(c) recognized educational institutions including hostels, public buildings and places used for the charitable purpose of sheltering destitute or animals and libraries and play-grounds which are open to the public;”

Thus, from a perusal of Section 88(1)(c) of the Act, it is evident that the buildings and lands of recognized educational institutions, including hostels, public buildings and places used for charitable purpose of sheltering destitute or animals and libraries and play grounds which are open to the public, shall be exempted from payment of property tax.

Thus, the buildings owned by recognized educational institutions are exempted from payment of property tax. However, the representation submitted by the petitioner Society has been rejected on the ground that the buildings owned by the petitioner Society are not meant for charitable purpose of sheltering destitute or animals and libraries and play grounds which are open to the public. The representation of the petitioner has been rejected on an erroneous interpretation of Section 88(1)(c) of the Act. The places which are used for charitable purpose of sheltering destitute or animals are also exempted from payment of property tax. However, as stated supra, the buildings and lands owned by recognized educational institution are also exempted from payment of property tax. The impugned order dated 04.12.2007 has been passed on the basis of Section 88(1)(c) of the Act and the same therefore cannot be sustained in the eye of law and is accordingly quashed.

In the result, the writ petition is allowed.

As a sequel, miscellaneous petitions, pending if any, stand closed.