MANAGER Vs. STATE OF KERALA

JUDGEMENT

(1.) These writ petitions bring to the fore the general and widespread aversion amongst our citizenry to taxes. Ingenious and varied are the submissions advanced before courts in their attempts to claim the benefit of exemption clauses that would insulate them from a levy. What is missed out often, in these desperate attempts, is the general principle in taxation law that exemption provisions in a taxing statute, unlike the charging provisions therein, are interpreted strictly in favour of the revenue and against an assessee. A court hearing arguments challenging the constitutional validity of an exemption provision in a fiscal statute, strives to uphold its validity and it is only if it is impossible to do so that the provision is declared unconstitutional. The burden on those who assail the statutory provision is therefore quite heavy.

(2.) The petitioners in these writ petitions are self-financing educational institutions. They impugn the demand of property tax from them under Section 203 of the Kerala Panchayat Raj Act/Section 233 of the Kerala Municipality Act, 1994 [both Acts hereinafter together referred to as the 'Acts']. It is stated that as per the said provision, there is a levy of tax contemplated in respect of all buildings, save those that are exempted from the levy of tax under Section 207/Section 235 of the respective Acts. Section 207/Section 235 enumerates the classes of buildings that are exempted from the levy. In these writ petitions, the exemption clause that is challenged as discriminatory is Section 207(b)/Section 235(b) of the Acts, which reads as under:

(3.) It is the case of the petitioners that inasmuch as their educational institutions are not housed in buildings owned by the Government or aided or functioning under the financial assistance from the Government, they are denied the benefit of the exemption granted under the Acts. They therefore impugn the exemption provision as discriminatory inasmuch as it discriminates between Government/aided educational institutions on the one hand, and unaided educational institutions on the other. It is pointed out that unaided educational institutions were not liable to pay tax under the Act till 7.10.2009, when the exemption provision was amended to exclude the said institutions from the ambit of the exemption. It is also pointed out that some of the educational institutions were established at a time when the buildings were exempted from the levy of property tax under the Acts.