BAI GULAB HARGOVANDAS JAGJIVANDASNI DIKARINA DIKARINA WILL & OTHER Vs. STATE OF GUJARAT, SECRETARY & OTHER

JUDGEMENT

(1.) By way of this petition under Article 226 of the Constitution of India, petitioners have prayed for an appropriate writ, direction or order declaring that the levy of property tax on the Hospital Building of the petitioner Trust is ultra vires section 132 of the Bombay Provincial Municipal Corporation Act, 1949 (hereinafter referred to as "BPMC Act") and that the Hospital Building is entitled to exemption from levy of any general / property tax.

(2.) Facts leading to the present special civil application and so pleaded in the petition in nutshell are as under:

(3.) Ms. Megha Jani, learned advocate appearing on behalf of the petitioners has vehemently submitted that the action of the respondents to levy the general property tax on the premises used by the petitioner No.1 Trust as hospital for charitable purpose is absolutely illegal and contrary to section 132 of the BPMC Act. It is submitted that the levy of general tax on the petitioner Trust is ultra vires the BPMC Act and arbitrary in view of section 132 of the BPMC Act. It is submitted that under section 132 of the BPMC Act, buildings and lands solely occupied and used for a public charitable purposes are exempted from payment of property tax. It is submitted that action of the respondent Corporation of withdrawing the exemption, which was extended to the petitioner Trust till 2001, is arbitrary, unreasonable and ultra vires the section. It is submitted that section 132 of the BPMC Act would be applicable irrespective of levy of property tax under section 141(AA) or under section 129 of the BPMC Act. It is submitted that under the BPMC Act, property tax can be levied either under section 129 or under section 141AA. It is submitted that section 132 provides for exception to four categories of buildings and lands as mentioned therein from payment of general tax. It is submitted that even section 132 continues to be on statute while introducing section 141AA to section 141F, section 132 is not yet deleted. It is submitted that therefore there is nothing to suggest that section 132 of the BPMC Act has become inapplicable when the property tax is levied under section 141AA. It is submitted that such an interpretation would render the mandate, under section 132 which embodies the State policy and intention, redundant. In the alternative it is submitted by Ms. Jani, learned advocate appearing on behalf of the petitioners that even the classification of hospital as a "commercial property" under the Taxation Rules is arbitrary and unreasonable. It is submitted that the action of the Corporation of classifying the hospital building as a commercial property is irrational, arbitrary, unreasonable and violative of Article 14 of the Constitution of India. It is submitted that the hospital building was treated by the Corporation as a building used for a public charitable purpose in which no trade or business was carried on till 2001. It is submitted that therefore treating the hospital building as a building where "commercial activity" is carried on is in contradiction to the undisputed and accepted fact that the hospital building in question is used for a public charitable purpose in which no trade or business is carried on. It is submitted that therefore the action of the corporation of treating it as a commercial property is arbitrary, without any justification and unreasonable. In support of her above submissions, she has heavily relied upon the decisions of the Hon'ble Supreme Court in the case of Devendra M. Surti v. State of Gujarat, 1969 AIR(SC) 63; M.P. Electricity Board and Ors. v. Shiv Narayan and Anr, 2005 7 SCC 283 (Para 5, 6, 7, 16) and in the case of Laxmi Engineering Works v. P.S.G. Industrial Institute, 1995 3 SCC 583 (Para 11).