NOTRE DAME ACADEMY, MUNGER Vs. STATE OF BIHAR

JUDGEMENT

(1.) Petitioner seeks quashing of the order dated 11.8.2004 passed by the Secretary, Urban Development Department, Government of Bihar, Patna (respondent No. 2), whereby he has rejected its application for exemption from tax on holding and further, seeks direction to the respondent-authorities to declare that the petitioner's holding is being used for charitable educational purpose and, as such, is eligible for exemption under sub-section 3 of Section 84 of the Bihar Municipal Act, 1922. This is the third time the petitioner has moved this Court. On the first occasion, the petitioner had approached this Court by filing C.W.J.C. No. 5964 of 2000 (Notre Dame Academy and Anr. vs. State of Bihar & Others) claiming to be a charitable educational institution and eligible for grant of exemption in payment of municipal charges as per provision as contained in Section 84(3) of the Bihar Municipal Act, 1922. In fact, it is stated in the writ petition that on 3.9.1981, the Principal of the institution applied to the Executive Officer, Munger for exempting the petitioner's holding from payment of Municipal Tax under the aforesaid provision. The concerned Municipality stood superseded at that point of time and the powers were vested in the Special Officer appointed by the State Government who, vide letter dated 4.2.1991 as contained in Annexure-5, had forwarded the application of the petitioner to the Government for consideration of such exemption. However, the matter remained pending for long time which had compelled the petitioner to prefer the aforesaid writ application. The aforesaid writ application was disposed of on 14.7.2000 directing the appropriate authority of the State Government to consider the application of petitioner No. 1 (the sole petitioner herein) for grant of exemption from payment of Municipal Taxes and pass a reasoned order within a period of three months. The respondent No. 2 disposed of the matter rejecting the claim of the petitioner vide an order dated 15.12.2000, as contained in Annexure-7, on the ground that altogether about one thousand students are studying in the School and the petitioner is charging Rs. 300/- to Rs. 500/- from each of the students. Thus, the Special Officer of the Munger Municipality had come to the conclusion that the petitioner's claim of being a charitable institution was not tenable. The aforesaid order was again challenged by the petitioner alongwith the Society by filing C.W.J.C. No. 522 of 2001 (Notre Dame Academy and Anr. vs. State of Bihar & Ors.) which was disposed of on 16.12.2003. In the aforesaid case this Court had opined that respondent No. 2 had erred in rejecting the prayer of the petitioner only on the ground that the institution was charging tuition fee from the students as, even if tuition fee was being charged, an institution could be a charitable one if such income was being utilized for its maintenance. However, if the fee was being charged for earning profit that could not be termed as a charitable purpose. This Court has observed that the Secretary, vide the impugned order, had rejected the prayer without going into the aforesaid question, which was the main issue to be decided. The matter was remitted back to respondent No. 2 for examining as to whether the purpose of the School was to earn profit or not and then to take a decision in accordance with law within six months from the date of receipt/production of a copy of this order. The respondent No. 2 vide order dated 11.8.2004, as contained in Annexure-9, has again rejected the petitioner's claim on the ground that the Executive Engineer has informed that on 15.7.2004 the meeting of the Board of Nagar Parishad was convened and a proposal was passed that the concerned institution does not come under the purview of Section 84(3) of the Act for the purpose of granting exemption from payment of holding tax. Thus, after observing that unless such recommendation is made by the concerned Municipality, the State Government would not be able to grant exemption. The order rejecting the claim of the petitioner is under challenge in this writ application.

(2.) Mr. K.M. Joseph, learned counsel appearing for the petitioner, submitted that from the Memorandum of Association of the Patna Notre Dame Sisters' Society, which has been appended as Annexure-1 to this writ application, it would be apparent that the purpose of the Patna Notre Dame Sisters' Society, which is running this Notre Dame Academy at Munger, is to establish educational and charitable institution. It has further been pointed out that the Income Tax Authorities, as would be apparent from Annexure-2, has considered it to be a charitable trust. Mr. Jospeh has further submitted, that the issue which had been noticed and discussed by this Court while passing the order dated 16.12.2003 in C.W.J.C. No. 522 of 2001 (Notre Dame Academy and Anr. vs. State of Bihar & Ors.) has not been answered. Again exactly same view has been taken by the authority concerned that was earlier considered and set aside by this Court while remitting back the matter to respondent No. 2. This Court had opined that charging tuition fee was not enough to term the institution as a profit making body and not a charitable one unless it is established that tuition fee was being charged for the purpose of earning profit and not for maintenance of the institution. This Court had noticed that the Secretary had rejected the request without going into the main issue as aforesaid. Thus, the order impugned was set aside and the matter was remitted back for fresh consideration specially to answer the specific question as to whether the purpose of this School was to earn profit or not. Mr. Jospeh has contended that the answer of the aforesaid issue/question is still elusive in the impugned order dated 11.8.2004 and the earlier order does not appear to have been complied in its letter and spirit. Learned counsel has placed strong reliance upon a decision of this Court dated 23.8.2002 rendered in C.W.J.C. No. 1101 of 2002 (Bettiah Holy Cross Sisters' Society & Another vs. The State of Bihar and Others) which, according to Mr. Joseph, has been passed in a case of similar nature. Mr. Joseph has further urged that once a particular view has been taken by the concerned Municipality on the earlier occasion, which would be apparent from the order dated 15.12.2000 (Annexure-7), it became functus officio for the purpose and decision was to be taken by the State Government under Section 84(3) of the Act. There was absolutely no requirement for respondent No. 2 to seek another view of the concerned Municipality for reaching to a conclusion as only the respondent No. 2 himself was directed to proceed to examine as to whether the purpose of the School is to earn profit or not and take a decision in accordance with law. Secondly, even if it is assumed that it could have been done by respondent concerned, the question does not appear to have been answered by respondent No. 2. He has simply brushed aside the claim of the petitioner taking shelter of further recommendation by the concerned Municipality without answering the aforesaid legal issue involved in the case.

(3.) Counter affidavit as well as supplementary counter affidavit has been filed on behalf of respondent No. 4, Executive Officer, Munger Municipality, Munger taking a stand that in a meeting of Ward Commissioner held on 15.7.2004, a proposal has been passed on the issue of exemption of the petitioner from payment of holding tax. However, from the resolution quoted in Hindi in paragraph-9, it does not appear as to whether the claim has been rejected or not and if the same has been rejected then on what ground. The supplementary counter affidavit has also been filed appending therewith the order dated 21.6.2011 passed by the Executive Officer of the Munger Municipality Corporation directing the petitioner to pay arrears of the holding tax, whereas, respondent Nos. 1 and 2 has taken a stand in paragraph 8 of the counter affidavit that the Board of the Municipal Council, Munger in its special meeting held on 15.7.2004 has unanimously held that the Notre Dame Academy, Munger is not a charitable institution rather a commercial education institution and hence it is not fit for exemption from the Municipal Taxes under Section 84(3) of the Act. Copy of the resolution proceeding of the meeting dated 15.7.2004 has been appended as Annexure-A/A to the supplementary counter affidavit filed on 30.1.2012 on behalf of respondent No. 4, Executive Officer, Munger Municipality, Munger. From the perusal of Annexure-A/A it is not clear as to whether the claim of the petitioner has actually been rejected by the concerned Municipality and if the same has been rejected then on what ground. At least, what has been noted regarding the resolution dated 15.7.2004 in the impugned order passed by respondent No. 2, does not appear to have been reflected in the resolution.