Rural educational institutions exempted from property tax: HC

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Chennai, Jan 7 (UNI) Madras High Court today directed the Tamil Nadu Government to exempt rural educational institutions from paying property tax.

Allowing a batch of writ petitions filed by rural self-financing institutions, a Division Bench, comprising Ms Justice Chitra Venkataraman and Mr Justice K Ravirajapandian, observed that these institutions were imparting education and not involved in any commercial activity. Besides, they followed the State Government's selection process.

The Bench dismissed the Government's explanation that exemption of property tax was applicable only to colleges which did not collect fees from students.

Meenakshi College of Engineering and 50 other rural educational institutions had challenged the levy and collection of property tax in respect of the property used by them under the Tamil Nadu Panchayats Act, 1994, and the Tamil Nadu Panchayat (Assessment and Collection of Taxes) Rules, 1999, framed thereunder.

The petitioners, quoting several cases, contended that the property housing the colleges was being utilised only for academic purpose from its inception and they were not involved in any commercial activity.

They submitted that all the colleges situated in a Municipality or Municipal Corporation were exempted from payment of property tax under Section 86 of the Tamil Nadu District Municipalities Act, 1920. Hence, the Government and panchayats were not legally justified in demanding property tax from them, they contended.


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