E-Paper
Private colleges, schools in Chandigarh are liable to pay property tax, rules HC
Decision to affect 30-odd institutions that had challenged UT administration’s 2004 notification
The Punjab and Haryana high court on Friday held that private colleges and schools are liable to pay property tax imposed by the Chandigarh municipal corporation (MC).
The high court (HC) division bench of justice Rajiv Sharma and justice HS Sidhu, was deciding a dispute pending since 2007 and involving 30-odd such colleges and schools that are not aided by the government in any manner. In 2010, a single-judge bench had ruled in favour of the institutions. However, the division bench has now overturned that decision.
The institutes had challenged the 2004 notification under Punjab Municipal Corporation (Extension to Chandigarh) Act 1994, under which “institutional lands and buildings” in which these schools and colleges have come up were levied property tax.
The institutions had argued that they got the land on leasehold basis. The institutes survive financially solely on the fee collected from students, it was argued, adding that they have no other source of income as they receive no funds or aid from the government.
Claiming the schools serve an essential public purpose, and hence should not be taxed, the petitioners had also pointed out some discrepancies in the notifications stating that the category was added at the administrator level and was not part of the resolution passed by the corporation.
The court observed that institutes have failed to cite the law under which they are entitled to exemption from the tax being an educational institution.
The court also found that draft bylaws had been proposed by the municipal Corporation. No such exemption was made in respect of the properties constructed on sites earmarked for private schools/ colleges in the bylaws, the court said, adding that before the administrator’s nod with some modifications, objections and suggestions were invited from general public.
