1991 PLP 1886 (CLC)

MUHAMMAD ASLAM ARAIN, J: ‑‑The petitioners have challenged the orders dated 13‑2‑1988 passed by the respondent No.2 and dated 13‑12‑1988 passed by the respondent No.1 and also the challans issued by the respondents for payment of Rs.498,861 as property tax and Rs.429,430 as penalty on the petitioners' property for the period 1975‑

86. The case of the petitioners is that they are a public religious and charitable trust under the name of Swami Narayan Temple Estate existing since over 100 years. The properties, comprised in the Trust, are exempted under section 4 (f) of the Urban Immovable Properties Tax Act, 1958 from payment of tax. The Management of Trust was with the Receiver appointed by this Court in Suit No.149 of 1972, who has also contended that the statement of the Assistant and Taxation Officer reflected in the order of the respondent No.1 that the Trust is not a public charitable institution, but actually is community oriented, is not a correct statement as could be seen from the Scheme of the Trust, Annexure (A) filed with the petition. He has also referred to the provisions of section 4 (f) of the Act, which is reproduced below:‑-- Section

4. The tax shall not be leviable in respect of the following properties, namely:‑-- (f) Buildings and lands or portion thereof used exclusively for public worship or public charity including mosques, churches, dharamsalas, gurdwaras, hospitals, dispensaries, orphanages, alms houses, drinking water fountains, infirmaries for the treatment and care of animals and public burial or burning grounds or other places for the disposal of the dead." It is contended by the learned Advocate that the observation of the respondent No.1 in his order dated 13-12-1988 that during the period of 1982-83. against the total income of Rs.2,14,637 only Rs.1,626 were spent on charity, is a misconception for the reason that during this period, the property was under the management of this Court and no amount could have been spent on charitable/festival occasions. The learned Advocate has also contended that proper accounts have been maintained. During the pendency of the suit, a demand notice dated 18-1-1988 for a sum of Rs.269,515 was received on account of property tax, but the said demand notice was duly replied. Again on 12-4-1988, the respondents demanded the excise tax of Rs.498,861 together with Rs.2,49,430 as a penalty for the period 1975-76. These notices were contested by the petitioners on the ground that the Trust was exempted from the lavy of tax as the properties were being used exclusively for public worship and public charity including temples and orphans, the poor and other public charitable and religious purposes. This plea of the petitioners was rejected by the respondent No.2 on 13-2-1988 and a revision against that order was rejected by the respondent No.1 on 13-2-1988.

2. It has been contended by the learned Advocate for the petitioners that at no time any property tax was levied against the petitioners' property for the reason that the said properties are owned by a religious and charitable Trust and exempted from payment of property tax. He has further contended that since 1972, the properties of the Trust were under the management of this Court through the Receiver and were at no time treated as taxable by the respondents. He being the Receiver appointed by this Court and merely because a small amount is shown to have been spent on charity during that period, it could not be said that the Trustees have misappropriated the amount of income. He has also contended that the properties were at no time treated as taxable, the demand notice as well as the challans and the orders in appeal and revision filed by the respondents be declared to have been issued/passed without lawful authority. He has prayed for issuance of a writ certiorary prohibiting the respondent No.1 from enforcing the excise and taxation demand vide notice and challan dated 4-1-1989 and the order dated 13-2.1988 of the respondent No.2. Mr. A.G. Mangi, the learned A.A.-G. has contended that the order dated 13-12-1988 passed by the respondent No.1 in revision shows that against the total income of Rs.2,14,837 only Rs.1,626 was spent on charity. This according to him, is indicative of the fact that the income from the property of the petitioners in not being utilised for religious and charitable purposes and, therefore, they have rightly been made liable for payment of the property tax. We have examined the order dated 13-12-1988 passed by the respondent No.l and the reasons given by him for dismissing the revision. The said order cannot be sustained. Admittedly, the properties of the petitioners were under the management of the Receiver appointed by this Court and all accounts of income and expenditure have duly been maintained under his control. The provisions of section 4 (f) of the Act exempt the properties from the payment of property tax if they are used for religious purposes specified therein. The order of respondent No.l dated 13-12-1988 is not based on law or any reason. It has neither correctly appreciated and decided the factual aspect nor properly interpreted the provisions of section 4 (f). The main ground for rejecting the petitioner's claim was that the trust is community oriented and not for general public. Section 4 (f) exempts properties which are exclusively used, amongst others for worship, mosque, dharmshala, church, charity, hospital orphanage, alms houses, places of public worship like mosque, church or temple will always be community oriented. We, therefore, while allowing this petition, set aside the orders dated 13-2-1988 passed by the respondent No.2 and dated 13-12-1988 passed by the respondent No.1. We also declare that the demand of property tax contained in challans dated 31-1-1989 is without lawful authority and of no legal effect. We, however, remand the case to the respondent No.2 for hearing the petitioners afresh and for deciding the case in the light of the following points:

(a) Whether at any time prior to the impugned demand property tax was charged from the petitioner? (b) Whether the income of the petitioners' property is being used exclusively for religious and charitable purposes or for purposes as specified under section 4 (f). (c) Whether proper accounts are maintained by the petitioners for the period when the management was with them. By a short order dated 10-1-1991, we had allowed the petition and the above are the reasons. A.A./S-745/K????????????????????????????????????????????????????????????????????????????????????? Case remanded.