JAMSHETIJEE JEEJEEBHOY BARONET Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) THE short question which falls far consideration is whether the petitioner trust is entitled to claim exemption from the liability of paying house tax under rule 7 (2) (c) of the maharashtra Village Panchayat Tax and Fees Rules, 1960 framed under the provisions of the Bombay village Panchayat Act, 1958, hereinafter referred to as the "said Rules" and the "said Act" respectively. The petitioner trust was established in the year 1834 and owns land and cattle sheds with in the limits of Group Grampanchayat, Anne bhisol, Taluka Kalyan Dist. Thane. The activities of the petitioner trust are of charitable purpose including keeping cattle and other animals and birds and giving them food, shelter and medical aid and to look after old and disabled animals. The petitioner claims exemption under Rule 7 (2) (c) from the liability to pay house tax leviable under the said rules. Rule ;7 (2) (c) inter alia reads as under:

(2.) BY letter dated June 23, 1979, the grampanchayat called upon the petitioner trust to submit the valuation of the buildings of the trust for the purpose of assessing the tax. The petitioner by its letter dated June 28,1979 replied to the said notice stating that the petitioner is a registered public charitable trust and hence is not liable to pay any tax. The Grampanchayat, however, vide its bills dated July 15, 1979 purported to levy tax at the rate of Rs. 3000 p. a. upon the trust. Being aggrieved the petitioner preferred an appeal to the Panchayat Semitic which came to tae dismissed by order dated April 25, 1990 without assigning any reasons. Further appeal was preferred before the Administrator and Chief executive Officer of Zilla Parishad Thane. This appeal also came to tae dismissed by order dated january 7,1992. The Administrator observed in his order that ". . . . . . it appears that though this institution is charitable, the institution is carrying on the trade of sale and purchase of cattle and selling milk etc. which is for the purpose of profit making. Therefore it is informed that the said institution is not entitled to exemption from payment of tax levied by the grampanchayat Anne Bhisol. Tal Kalyan under the rule 7 (2) (c)". The present petition is directed against this order of the Administrator.

(3.) MR Saraf, learned counsel appearing for the petitioner has contended that in view of the clear provisions of rule 7 (2) (c) the land and buildings used solely for the religious, education and charitable purpose are exempt from levy of house tax. Even if activity for profiteering is incidently carried out the primary purpose of the trust or the institution does not cease to be charitable purpose. Mr. Saraf referred to a division bench decision of Kerala High Court in commissioner of Income tax vs. Pulikkal Medcial foundation Pvt. Ltd. , 1994 Vol 210 Income Tax Reports 299, where the court held as follows: