Maharaja Engineering College vs The President, Palangarai Panchayat (Grade I)

A. Arumughaswamy, J.—The petitioner Engineering College is recognized by the All India Council for Technical Education (AICTE) and

the college is originally affiliated to the Bharathiyar University, Coimbatore. Consequent to the Anna University (Amendment) Act, 2001, the

petitioner Engineering College is affiliated to the Anna University. Further, the petitioner College is being administered by Paramasivam Palanisamy

Charitable Trust. The college is in the rural area and since the buildings pertaining to the petitioner college are being used for the educational

purposes as per Rule 15(c) of the Tamil Nadu Village Panchayats (Assessment and Collection of Tax) Rules, it is exempted from paying tax.

While so, demand notices demanding tax in Nos. 301 and 302 dated 3.1.2007 were issued by the respondent to the petitioner college. Hence, the

present Writ Petition. Learned Counsel for the petitioner would contend that the petitioner institution is an Education Institution which is situated in

the rural area and no rent has been derived from any of the buildings and since, it comes under the limits of Village Panchayat, it has already been

exempted from paying tax under Rule 15(c) of the Tamil Nadu Village Panchayats (Assessment and Collection of Tax) Rules. Therefore, the

impugned notices demanding tax are totally illegal and the same are liable to be set aside.

Learned Standing Counsel for the respondent would contend that as per the decision of the First Bench of this Court in M.P. Nos. 1 in W.A.

Nos. 2152 of 2010 etc. batch dated 6.7.2011, the present demand notices have been issued to the petitioner. The learned Standing Counsel

would further submit that revisions have been preferred against the said judgment and after the disposal of the said revisions, final decision will be

taken by the respondent.

Heard both sides and I have also perused the materials available on record carefully.

The facts that the petitioner Engineering College is an educational institution situated in a rural area and already, it has been exempted from

paying tax and it comes under the village panchayat limits are not in dispute.

Now the grievance of the petitioner Institution is that the respondent has issued two demand notices demanding tax. But, according to the

respondent, they demanded the tax as per the decision of this Court made in M.P. Nos. 1 in W.A. Nos. 2152 of 2010 etc. batch dated 6.7.2011

and it will be finalised in the revisions preferred against the said orders.

In this regard, it is useful to extract para 2 of the said judgment which reads as follows:

For better appreciation, the order dated 17th June, 2011 is quoted herein below:

Reference may be made to the order dated 17th March, 2011 which reads as under:

We have heard Mr. A.K. Ganguli, learned Senior Counsel, Mr. P.S. Raman, learned Advocate General and Mr. N.R. Chandran, learned Senior

Counsel at length.

Mr. N.R. Chandran, learned Senior Counsel needs further hearing in all the matters. As jointly agreed, put up all these cases on 13th June 2011.

In the meantime, the appellants as also the writ petitioners shall pay property tax with effect from 05th March 2008, the date when the amended

Rule came into force. Consequently, the interim order passed in the writ petitions stands modified. Needless to say that in the event the appellants

or the writ petitioners succeed, the amount that may be deposited shall be adjusted.

In view of the above, the petitioner is also directed to make payment towards demand notices dated 3.1.2007 before the respondent within a

period of three weeks from the date of receipt of a copy of this Order. The respondent is entitled to recover the tax amount for the earlier period

subject to the disposal of the revision by this Court. It is made clear that the order to be passed by this Court in the revisions preferred against the

decision cited above is final. With the above observation, the Writ Petition is disposed of. No costs. Consequently, connected Miscellaneous

Petition is also closed.