HC wants separate account for property tax deposited by schools

Chandigarh, November 7
The Punjab and Haryana High Court in its orders has stated that property tax, if deposited by schools in Chandigarh, should be kept in a separate account.
In case appeals filed by the municipal corporation are dismissed, the amount shall be refunded to applicants, the Bench of Justice Hemant Gupta and Justice GS Sandhawalia ruled, while dismissing three applications filed by the schools for vacation of an ex-parte order dated April 6.
Vide the order, the appeals against the order passed by a Single Judge on September 24, 2010, were admitted and the operation of the order was stayed.
The Single Judge had quashed a notification fixing property tax on institutional lands.
The order came on a bunch of 23 petitions filed by St John’s High School-26 and other institutions.
The writ petitioner had contended that the municipal corporation’s resolution to levy tax on institutional lands and buildings was absent. Therefore, the notification was without jurisdiction.
The Bench ruled: “The argument that the payment of tax at this stage will amount to undue enrichment is again not tenable. The tax has been levied in terms of the statutory provisions and after complying with the procedure. It is for the writ petitioners to device means of payment of tax.”
“Since the tax is, prima facie, legal, the vacation of the order passed by the court will lead to the stay of levy of tax.”
The Bench also asserted, prima-facie, it did not find any procedural irregularity in imposing tax.
The Bench asserted: “Prima facie, we find that the order of Single Judge may not be sustainable. The resolution specifically excluded the levy of house tax on residential lands and buildings used for residential purposes. Meaning thereby, that except lands and buildings which are being used for residential purposes, there is a resolution of the municipal corporation to levy tax on all lands and buildings.”
The Bench added: “The exemption to schools in Punjab has nothing to do with the tax. Still further, schools are imparting education to children again cannot provide any binding precedent on this Bench. Prima-facie, we do not find that there is any procedural irregularity in imposing tax. The levy and recovery of tax serves public purpose.”
The Bench concluded: “Any observation made in the order, is only for the purpose of deciding the present applications for vacation of stay.
It shall not be taken into consideration while deciding the appeals on merit. The appeals have already been ordered to be heard within a year on April 6. Since the issue is short, we are of the opinion that the interest of justice warrants that the present appeals be posted for final hearing in the month of January, 2012, high-up in the list.”