The Bombay high court
Mumbai: Bombay high court upheld a property tax demand made 13 years ago by a civic body on a public charitable trust that runs linguistic minority education institutions saying the trust is not providing free education and hence exemption cannot be granted. The high court held that mere assertions that the trust is set up for a charitable purpose, runs a school and imparts education which is a charitable function, does not automatically become a ‘charitable purpose’ to invoke a legally provided property tax exemption.
To claim an exemption, it is imperative to establish that the buildings and land or a portion of it are solely occupied and used for public charitable purpose, said the high court division bench of Justices Bharati Dangre and Manjusha Deshpande in a September 29 judgement, adding, “mere owning of land/building is not sufficient’’. “Any commercial activity, being carried out in the premises should therefore not enjoy the exemption and even if the activity of education is carried out with a profit-earning motive, it would then be denuded of the cover of ‘charitable purpose’ under Section 9 of the Maharashtra Public Trusts Act,’’ the high court observed after analysing the laws, the constitutional freedom to set up minority education institutions and the top court rulings.
The high court said it disagreed with a “blanket proposition set out by the petitioners that education per se is a charitable purpose’’. “It is necessary to seek an exemption every financial year and there can be no exemption claimed in a wholesale manner,’’ the high court held and said the demand brooked no interference in the absence of the trust staking its claim on a year-to-year basis. “That every educational institution achieves the charitable purpose, no longer is the accepted norm,’’ the bench observed. The high court agreed with municipal corporation’s counsel Srikrishna Ganbavale that a claim for exemption is not automatic, nor permanent. He had argued that the trust accepts fees and donations and does not provide free education.