Sri Mahalakshmi Educational Scientific & Charitable Trust v. Palamel Grama Panchayat and Secretary, Palamel Grama Panchayat

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.HARILAL** **MONDAY, THE 7TH DAY OF NOVEMBER 2016/16TH KARTHIKA, 1938** **WP(C).No. 24930 of 2011 (M) ----------------------------** **PETITIONER: ----------SRI.MAHALAKSHMI EDUCATIONAL SCIENTIFIC & CHARITABLE TRUST (REGD), PANDALAM-689 501, REPRESENTED BY ITS PRESIDENT, S.RAMACHANDRA KURUP. BY ADVS.SRI.SIBY MATHEW SRI.B.PREMNATH (E) SRI.PHILIP J.VETTICKATTU** **RESPONDENTS:** **-----------** **1. THE PALAMEL GRAMA PANCHAYAT, PALAMEL, NOORANAD P.O., ALAPPUZHA-690 504, REPRESENTED BY ITS SECRETAY.** **2. THE SECRETARY, PALAMEL GRAMA PANCHAYAT, PALAMEL, NOORANAD P.O., ALAPPUZHA-690 504. R1 BY ADV. SRI.A.R.DILEEP ADV. SRI.GEORGE VARGHESE (PERUMPALLIKUTTIYIL) ADV. SRI.MANU SEBASTIAN ADV. SMT.NAVA VARGHESE** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 07-11-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **APPENDIX** ## **PETITIONER(S) EXHIBITS** **EXT.P1- TRUE COPY OF NOC DT.27.10.2004 ISSUED BY THE GOVERNMENT TO THE PETITIONER.** **EXT.P2- TRUE COPY OF NOC DT.6.10.2004 ISSUED BY THE UNIVERSITY OF KERALA TO THE PETITIONER.** **EXT.P3- TRUE COPY OF ORDER DT.2/11/2004 PASSED BY KERALA NURSES' AND MIDWIVES COUNCIL.** **EXT.P4- TRUE COPY OF ORDER NO.GO(MS)87/09/H/EDN. DT.7.7.2009 ISSUED BY THE GOVERNMENT.** **EXT.P5- TRUE COPY OF ORDER DT.19.1.2O10 ISSUED BY THE UNIVERSITY OF KERALA.** **EXT.P6- TRUE COPY OF ORDER DT.22.6.2009 ISSUED BY THE ALL INDIA COUNCIL FOR TECHNICAL EDUCATION.** **EXT.P7- TRUE COPY OF ORDER DT.23.8.2010 ISSUED BY THE ALL INDIA COUNCIL FOR TECHNICAL EDUCATION.** **EXT.P8- TRUE COPY OF DEMAND NOTICE DT.21.5.2011 ISSUED BY THE RESPONDENT PANCHAYAT TO THE PETITIONER.** **EXT.P9- TRUE COPY OF DEMAND NOTICE DT.20.6.2011 ISSUED BY THE RESPONDENT PANCHAYATH TO THE PETITIONER.** **EXT.P10-TRUE COPY OF REPRESENTATION DT.4.6.2011 SUBMITTED BY THE PETITIONER BEFORE THE RESPONDENT.** **EXT.P10(A)-TRUE COPY OF REPRESENTATION DT.24.6.2011 SUBMITTED BY THE PETITIONER BEFORE THE RESPONDENT.** **EXT.P11- TRUE COPY OF LETTER DT.1.8.2011 ISSUED BY THE RESPONDENT TO THE PETITIONER.** **EXT.P12- TRUE COPY OF REPLY DT.6.8.2011 SUBMITTED BY THE PETITIONER BEFORE THE RESPONDENT.** **EXT.P13- TRUE COPY OF ORDER NO.C2-6215/2011 DT.23.8.2011 ISSUED BY THE RESPONDENT PANCHAYATH.** **EXT.P14 - TRUE COPY OF PROPERTY TAX RECEIPTS ISSUED FROM THE OFFICE OF THE RESPONDENT GRAMA PANCHAYAT.** //true copy// P.S. to Judge ## **K. HARILAL, J. -----------------------------------------------------W.P. (C) No.24930 of 2011-M -----------------------------------------------------Dated this the 7[th] day of November, 2016** ## **JUDGMENT** The petitioner is the President of Sri. Mahalakshmi Educational, Scientific & Charitable Trust, Pandalam. The Trust is running educational institutions viz., Archana College of Engineering, Archana College of Nursing and Archana Hospital. As regards Archana College of Engineering, Ext.P4 is the No Objection Certificate issued by the Government and Ext.P5 is the affiliation granted by the University. The AICTE has granted approval, as per Ext.P6, and Ext.P7 is the extension of the approval granted by the AICTE. Similarly, the Government of Kerala had issued Ext.P1 NOC for running the Archana College of Engineering. By Ext.P2, the University had granted affiliation. **W.P. (C) No.24930 of 2011** -: 2 :- Ext.P3 is the NOC issued by the Kerala Nurses' and Midwives' Council, Thiruvananthapuram. Thus, all these educational institutions stand recognized by the Government of Kerala. According to the petitioner, these educational institutions are entitled to exemption under Sec.207(1)(b) of the Kerala Panchayat Raj Act, 1994. 2. However, Exts.P8 and P9 are the demand notices issued by the respondents for an amount of `42,125/- towards the property tax on the said building. On receipt of Exts.P8 and P9, the petitioner made Exts.P10 and P10(a) representations pointing out that the petitioner is entitled to get exemption under Sec.207(1)(b) of the Panchayat Raj Act. The respondents have sought certain clarifications from the petitioner, as per Ext.P11, and these clarifications were made by Ext.P12. Now, the petitioner is served with Ext.P13 order by the respondent/Grama Panchayat rejecting the request of the petitioner for the refund of the property tax already paid prior to the **W.P. (C) No.24930 of 2011** -: 3 :- amendment of Sec.207(1)(b) as well as exemption for the years 2010-2011 and 2011-2012. Thus, this writ petition is filed challenging the legality and correctness of Ext.P13. 3. Heard the learned counsel for the petitioner and the learned Standing Counsel appearing for the respondent/Panchayat. 4. The question that emerges for consideration in this writ petition is, whether the grant of exemption from the property tax under Sec.207 of the Kerala Panchayat Raj Act, 1994 to the buildings, used for educational purpose or allied purpose and its hostel buildings owned by the government, aided or functioning with the financial assistance of the Government alone, in exclusion of similar buildings and hostels owned by other private management of self-financing Educational Institutions,is discriminatory and violative of Article 14 of the Constitution of India. This Court elaborately considered this issue, in view of Art.14 of the Constitution of India, in the decision **W.P. (C) No.24930 of 2011** -: 4 :- reported in Sreenarayana Gurukulam College of Engineering, Kolenchery v. State of Kerala and Another [2016 (4) KHC 482] and held as follows: “8. In the instant case whether the buildings and hostels for the purpose of education and stay owned or financed by the Government and owned by the private management of Selffinancing Educational Institutions can be treated alike. Whether there is any intelligible differentia which distinguishes the buildings owned by the Government and owned by private management of selffinancing institutions. The matter in issue involved in the instant case falls exclusively in the domain of taxation and has no connection with the academic affairs. Therefore, the extent of enquiry is confined to the fiscal status of institutions only. What is the basis of the classification? In my view, this classification is made, by granting exemption to the buildings owned or ## **W.P. (C) No.24930 of 2011** -: 5 :- financed by the Government, on the basis that public money is utilised for the construction and maintenance of such buildings; whereas in the case of the buildings and hostels owned and maintained by private management of selffinancing institutions, the public money has not been involved. Put it differently, this exemption is a privilege granted to the public money and it can be said that buildings and hostels constructed and maintained by using public money is exempted from payment of property tax and the people, as a whole, is the beneficiary of this exemption. If property tax is imposed on buildings and hostels owned by the Government, that amount also will be taken from the public fund. More importantly, exemption is given to the institutions, functioning under the administrative control of the Government and to which Governmental auditing of funds and ## **W.P. (C) No.24930 of 2011** -: 6 :- expenditure is made compulsory; whereas , the case of self-financing institutions, such control and auditing of funds are absent. 9. Secondly, the expression 'self financing' itself shows that such institutions are having their own fee structure, which cannot be compared with fees of a Government College. Though, it is regulated and controlled by the above referred statute, it is much higher than that of Government Colleges, wherein a nominal fee alone is collected from the students and certain rooms are reserved for students from socially and economically backward classes, in the hostels owned by the Government. In my view, this classification on the aforesaid basis is a rational one and there is an intelligible differentia in this classification. Self-financing Educational Institutions form a separate class, different from the Educational Institutions owned and **W.P. (C) No.24930 of 2011** -: 7 :- financed or aided by the Government and the discrimination made under Sec.207(b) of the Panchayat Raj Act is marked by intelligible differentia. 10. Thirdly, it is the case of the petitioner that the petitioner's institution is also governed and regulated by the the Kerala Professional Colleges or Institutions (Prohibition of Capitation Fees, Regulation of Admission, Fixation of Non-exploitative fee and other measures to ensure equity and excellence in professional Education) Act, 2006. The preamble of the above Act says that it is an Act to provide for prohibition of capitation fee, regulation of admission, fixation of nonexploitative fee, allotment of seats to Scheduled Castes, Scheduled Tribes and other socially and economically backward classes and other measures to ensure equity and excellence in professional education and for matters ## **W.P. (C) No.24930 of 2011** -: 8 :- connected therewith or incidental thereto. The said Act is a preventive legislation to curb illegality and exploitation in the functioning of the self-financing institutions. Merely on the reason that the receipt of capitation fee is prohibited and the admission and fixation of fee are regulated, it cannot be said that the self-financing colleges are owned or administered by the Government and the financial transactions are subjected to governmental scrutiny. So, such institutions are not entitled to get the privilege of the institution owned and administered by the Government. The petitioner institution is not the creation of a statute; but the functioning of the institute alone is regulated by several statutes, covering different field of activity and the Kerala Professional Colleges or Institutions (Prohibition of Capitation Fees, Regulation of Admission, Fixation of Non-exploitative fee and other measures to ensure equity and **W.P. (C) No.24930 of 2011** -: 9 :- excellence in professional Education) Act, 2006 is one among various such statutes and on that reason the self-financing Educational Institutions cannot be equated with the Educational Institutions owned and administered by the Government, having the privilege under Sec.207 of the Kerala Panchayat Raj Act, 1994. The concept of 'sovereign immunity' is the basis of this privilege of tax exemption granted to the institutions owned or aided and administered by the Government.' 5. After analysing the status of self-financing colleges and the educational institutions owned by the Government, this Court held that the self-financing educational institutions form a separate class, different from the educational institutions owned and financed or aided by the Government and the discrimination made under Sec.207(b) of the Panchayat Raj Act is marked by intelligible differentia and, as such, there is no violation of Art.14 of the **W.P. (C) No.24930 of 2011** -: 10 :- Constitution of India. Thus, the issue involved in this writ petition stands determined against the petitioner by the above decision in W.P.(C) No.8925/2012 dated 18/11/2015 and the first question raised by the petitioner in this writ petition also will stand negatived. 6. The next question to be considered is, whether the petitioner is entitled to get back the amount erroneously deposited as tax during the period from 2006-2007 to 07/10/2009 from the respondent/ Panchayat. Going by Ext.P14 series of receipts, it could be seen that the petitioner had paid building tax during the aforesaid period, notwithstanding the exemption granted to them under the law which was prevailed during that time. As rightly submitted the learned counsel for the petitioner, going by the statutory prescription prevailed under Sec.207 of the Kerala Panchayat Raj Act before the amendment dated 07/10/2009, all buildings, including hostels under the ownership and used for educational **W.P. (C) No.24930 of 2011** -: 11 :- institutions recognized by the Government, were exempted from payment of building tax and that exemption was taken away by the amendment to Sec.207 of the Kerala Panchayat Raj Act substituted by Act 31 of 2009 with effect from 07/10/2009. In other words, without noticing the exemption, the petitioner had remitted the building tax up to 07/10/2009 and the respondent/Panchayat had erroneously received the same from the petitioner, without noting the said exemption. It is not disputed that the petitioner's educational institutions are educational institutions recognized by the Government. If an amount is paid erroneously by mistake, certainly, the petitioner is entitled to get back the said amount, particularly when the Panchayat should not have received the said amount erroneously paid by mistake by the tax payer. 7. In the above view of the matter, this Court of the view that the petitioner is entitled to get back the amount paid as building tax from 2006-2007 to **W.P. (C) No.24930 of 2011** -: 12 :- 07/10/2009. Therefore, it is declared that the petitioner is entitled to get back the building tax paid by him from 2006-2007 to 07/10/2009 and the respondent/Panchayat is liable to refund the said amount to the petitioner, without interest. 8. Therefore, the respondent/Panchayat is directed to refund the building tax which the petitioner had paid from 2006-2007 to 07/10/2009, within a period of two months from the date of receipt of a copy of this judgment. This writ petition is disposed of accordingly. Sd/- ## **(K. HARILAL, JUDGE)** ## **Nan/** //true copy// P.S. to Judge