Madras School Of Social v. The Chairman

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 07.01.2019

CORAM

THE HONOURABLE MR.JUSTICE T. RAJA W.P.Nos.30726 and 30727 of 2016 and W.M.P.Nos.26624 and 26625 of 2016 Madras School of Social Work Run by the Society for Social Education & Research, Rep. by its Honarary President, No.32 A and 33, Casa Major Road, Egmore, Chennai-600 008.

... Petitioner in both petitions ..Vs..

1. The Chairman Taxation Appeal Tribunal (Greater Corporation of Chennai) Chennai Metropolitan Water Supply & Sewerage Board, Ripon Building, Chennai - 600 003.

2. Corporation of Chennai, Ripon Buildings, Chennai - 600 003.

Rep. by its Commissioner.

3. Chennai Metropolitan Water Supply & Sewerage Board, No.28, Sathiamurthy Road, Chetpet, Chennai - 600 031.

Rep. by its Divisional Engineer.

... Respondents in both petitions Prayer in both petitions: Writ Petitions filed under Article 226 of the Constitution of India to issue a Writ of Certiorari to call for the records connected with M.W.S.T.A.Nos.39 & 40 of 2014 and quash the order dated 21.06.2016 made therein by the first respondent.

For Petitioner in both petitions : Mr.C.Manohar Gupta for M/s.Gupta and Ravi For Respondents in both petitions: R1 - Tribunal Mr.T.C.Gopala Krishnan Standing Counsel for R2

Mr.M.Jothikumar Standing Counsel for R3 C O M M O N O R D E R The writ petitions have been filed by the petitioner challenging the impugned order dated 21.06.2016 passed by the Taxation Appeals Tribunal, Greater Corporation of Chennai in M.W.S.T.A. Nos.39 & 40 of 2014.

2.The learned counsel appearing for the petitioner would submit that the petitioner is an Educational Society registered as a Charitable Institution under the Societies Registration Act and exempted from payment of income tax under the relevant provisions of the Income Tax Act and they are also in respect of substantial grants from the Tamil Nadu Government and the Ministry of Your Affairs and Sports, New Delhi. While so, the petitioner institution owns the properties at No.32-A and 33, Casa Major Road, Egmore, Chennai.

According to the learned counsel for the petitioner, by the Tamil Nadu Act 42 of 1994, Section 101(C) of the Madras City Municipal Act was amended to exempt buildings and lands used for educational purpose and hostels attached to them from payment of property tax and this has been communicated to all local authorities for necessary action by the Director of Municipal Administration in proceedings bearing R.O.C. dated 15.07.1994. The learned counsel for the petitioner further submits that since the Act itself exempts the properties of the petitioner institution which are used for educational purpose, it follows that the property of the petitioner society situated at Nos.32-A and 33, Casa Major Road, Egmore, Chennai is statutorily exempted from the payment of property tax.

Learned counsel for the petitioner would further submit that Section 34 of the Chennai Metropolitan Water Supply and Sewerage Act, 1978 clearly states that the Board has to determine annual value for each year for assessing water and sewerage tax and the said section mandates the Board to assess water and sewerage tax in a particular manner. However, it is not open to the Board to assess the water and sewerage tax on the basis of property tax assessed earlier by the Chennai Corporation. When a statute prescribes to do a particular thing in a particular manner, the same shall not be done in any other manner than prescribed under the law.

Continuing his argument, he would submit that when the third respondent has claimed the Water and Sewerage tax for the first time in the year 2006, he is not entitled to claim surcharge from the year 1992-93. Therefore, the impugned proceeding issued

by the third respondent calling upon the petitioner educational institution to pay the Water and Sewerage Tax from the year 2006 onwards is liable to be quashed.

In support of his submission, he has also pressed into service an order passed by this Court reported in 2009(3) TLNJ 359 (Civil) in the case of the Madras Sanskrit College & S.S.V. Patasala Vs. Chennai Metropolitan Water Supply and Sewerage Board and another to say that the respondents have to determine the annual value and assess the tax and though the Board is making the assessment adopting the annual value made by the local bodies , the Board has a duty under Section 34 of the Act to levy tax.

3.The learned counsel appearing for respondents 2 and 3 would submit that no doubt the petitioner is an educational society registered as a charitable institution under the Societies Registration Act and also exempted from the payment of property tax, whereas the petitioner being the educational institution, is bound by the mandate made in Section 34 of the Chennai Metropolitan Water Supply and Sewerage Act 1978, which makes it clear that every educational institution exempted from the property tax or other tax are legally bound to pay the Water and Sewerage Taxes. By virtue of Section 34 of the said Act, the board has to determine the annual value for each year for assessing water and sewerage tax. The said Section mandates the Board to assess water and Sewerage tax in a particular manner.

Therefore, after assessing the annual value of the petitioner's building, liberty may be given to the third respondent to send a fresh notice or assessment order calling upon the petitioner to pay the water and sewerage taxes. However, the third respondent may be given liberty to levy and calculate only from the year 2006, since for the first time they issued the proceedings, calling upon the petitioner educational institution to pay the water and sewerage taxes in the year 2006. Therefore, the surcharge can be made against the petitioner fully. 4.Admittedly, the petitioner is an educational institution situated at No.32-A and 33, Casa Major Road, Egmore, Chennai, which is exempted under Section 101(c) of the Madras City Municipal Act, from the payment of property tax.

''34. Taxes leviable by the Board - (1) For the purposes of this Act, the Board shall levy on premises situated within its area- (a) a Water tax; and (b) a sewerage tax.

(2) The taxes mentioned in sub-section(1) shall be levied at such rates as may be prescribed which in the case of water tax shall not be more than thirty-five per cent

and in the case of sewerage tax shall not be more than fifteen per cent of the property tax.

(3) The Board may exempt any local area from the whole or portion of the water tax and sewerage tax on the ground that such area is not deriving any or the full benefit from the water-supply or sewerage system. The Board may remit a portion of such taxes not exceeding one half on the ground that the premises concerned has remained vacant. Explanation - For the purposes of this Chapter, the expression ''premises'' shall mean any land or building.

(4) Where water tax or drainage tax is comprised in the levied and collected by the existing authority, such existing authority shall reduce the property tax by an amount equal to the amount attributable to water tax and drainage tax."

5.A perusal of the same would reveal that the Board has to determine annual value for each year for assessing water and sewerage tax and the said section mandates the Board to assess water and sewerage tax in a particular manner and it is not open to the Board to assess the water and sewerage tax on the basis of property tax assessed earlier by the Chennai Corporation. 6.Four weeks time is sought for assessing the water and sewerage tax, however, if any such assessment is made by the third respondent on the building of the petitioner educational institution situated at No.

32-A and 33, Casa Major Road, Egmore, Chennai, they can claim only from the year 2006 onwards and not from 1992-93, as the surcharge cannot be claimed with retrospective effect from 1992-93 since the notice itself has been issued in the year 2006, therefore the impugned order is set aside. Accordingly, the writ petitions stand allowed. Consequently, connected W.M.P.s are closed. No costs. 7.It is claimed by the petitioner that they have paid the entire arrears, as per letter dated 29.06.2017. Therefore, the third respondent is directed to consider the relevant records as to whether the petitioner has paid the entire arrears and if the petitioner has paid the entire arrears, the third respondent shall adjust the amount from 2006.

s/d- Assistant Registrar(CO) True Copy Sub-Assistant Registrar

To

1. The Chairman Taxation Appeal Tribunal (Greater Corporation of Chennai) Chennai Metropolitan Water Supply & Sewerage Board, Ripon Building, Chennai - 600 008.

2. The Commissioner, Corporation of Chennai, Ripon Buildings, Chennai - 600 003.

3. The Divisional Engineer, Chennai Metropolitan Water Supply & Sewerage Board, No.28, Sathiamurthy Road, Chetpet, Chennai - 600 031.

+2 CCS to Mr.Gupta and Ravi, Advocate sr 1519. W.P.Nos.30726 and 30727 of 2016 VBA(CO) SP(11/02/2019)