The Madurai Bench of the Madras High Court on Tuesday observed that private schools seeking exemption from property tax were at liberty to approach the Corporation Council to prove that they were eligible under the Madurai City Municipal Corporation Act, 1971.
Justice R. Mahadevan observed that such institutional buildings would be exempted from property tax only if the schools were run for charitable purpose and had the approval of the Corporation Council. The court also observed that private schools were not purely philanthropic institutions as they were receiving fees.
The schools were at liberty to approach the Corporation within a period of two weeks from the order to prove that they are eligible to claim exemption under the Madurai City Municipal Corporation Act.
The court said that the institutions could produce documentary evidence to prove their stance. The Corporation shall hear the petitioners and complete the process by six weeks. It shall decide either to exempt the schools or initiate action for collection of tax without further delay.
Counsel for the petitioners argued that charity means assistance given to those in need and by imparting education to the student community the schools were run for charitable purpose. The educational institutions had the right to collect fees from students to achieve the object of imparting education, said the counsel.
Counsel for the respondents argued that the petitioners were private institutions imparting education in a professional manner. The Corporation demanded property tax under Section 121 of the Madurai City Municipal Corporation Act, 1971, which states that all buildings under the Madurai Corporation are assessed to be taxed. The exemption under Section 122 of the Act can be claimed if the institutions are run on philanthropic lines and with the approval of the Corporation Council, said the counsel.
The petitions were filed after the Deputy Revenue Officer and Commissioner of Madurai Corporation sent notices to private schools demanding payment of property tax. They had sought quashing of the notice.
