ALIYA ARABIC COLLEGE Vs. KASARAGOD MUNICIPALITY

JUDGEMENT

(1.) The petitioner in the O.P. is the appellant in this appeal. It is a Society registered under the Societies Registration Act. It is stated that it is running an educational institution. The institution is exempted under the Income Tax Act as a charitable institution. The managing committee of the Society decided to construct a building in a plot, owned by the institution in the Kasaragod Municipality, which would fetch a steady income as rent. From the contribution received from the public a pucka building was constructed with rooms to be let out as lodging rooms in the upstair portion of the building and with rooms on the ground floor to be let out as shop rooms. The building was completed in 1986. It was inaugurated on 27-3-1986. The building is known as 'Aliya Lodge'. The short question that was posed for consideration before the learned Single Judge was whether the assessment of the above building known as 'Aliya Lodge' for property tax by the Municipality is legal and valid. Reliance was placed on S.101(l)(c) of the Municipalities Act claiming exemption from property tax. S.101(1)(c) of the Act provides as follows:

(2.) We heard counsel for the appellant, Mr. F.A. Mohammed (T) as also counsel for the respondent Mr. M.P.R. Nair. The sole question argued before us was that the Income Tax Department has given exemption to the income received from the building and that aspect was not considered by the Municipality. It was also argued that the shopping complex cum lodging house in the instant case is a choultry and the rent obtained from the said building is used exclusively for charitable purposes. We are unable to agree with the said submissions. Even assuming that the rent obtained from the said building shopping complex cum lodging house is used exclusively for charitable purposes, it will not be sufficient for the purpose of getting exemption under S.101(1)(c) of the Act. The building, in order to be exempt from the property tax, should be a "choultry." The exemption pleaded by the petitioner was under the second limb of S.101(l)(c) of the Act, and the learned Single Judge referred to the dictionary meaning of the word 'choultry' as a caravanserai or a shed used as a place of assembly and observed that caravanserai is a place of rest for travellers and a modern lodging house is not a caravanserai. It was observed that the instant building is not merely a lodging house but also a commercial complex and such a building is not exempt from property tax under S.101 of the Act. We concur with the said view of the learned Single Judge. We are of the view, that the word 'choultry' occurring in S.101(1)(c) of the Municipalities Act should be construed as understood in common parlance and so considered, it can only mean a 'satram.' It is a matter of common knowledge that in these parts a 'choultry' or 'satram' is understood as a building ordinarily given free of rent or let on a very moderate rent, and such a building will never be of the character of a "shopping complex cum lodging house." In this view of the matter, we affirm the judgment of the learned Single Judge.