No Violation Of Article 14 In Denying Property Tax Exemption To Unaided Schools: Kerala High Court

The Kerala High Court stated that there is no violation of Article 14 in denying property tax exemption to unaided schools. Justice Ziyad Rahman A.A. stated that the fact that the Government owned, managed and aided schools are established by the Government at their funds in order to provide education to all classes of persons by collecting nil or meagre fees, is a crucial factor which distinguishes such establishments from an unaided school, where fees is collected from the students for rendering the services. In this case, the petitioners/assessee are unaided schools or the trust/organizations conducting unaided educational institutions, which are imparting education upto the standard twelve. The issue raised in the petition, pertains to the amendment made to the provisions of the Kerala Panchayat Raj Act, 1994 and Kerala Municipality Act, 1994, which deal with the exemption from paying the property tax, to the buildings exclusively used for educational purposes or educational allied purposes under the ownership of such educational institutions. As per the petitioners/assessee they were deprived of the exemption from payment of building tax for the buildings in which they are conducting educational institutions. The exemption enjoyed by them until 31.03.2023 was taken away by the Government, as per the aforesaid amendment. The assessee submitted that the exclusion of unaided schools from the purview of exemption of tax, while retaining the exemption to the schools owned, managed and aided by the Government, is amounting to unreasonable classification and, thus, violates the principles of equality before law, as contemplated under Art.14 of the Constitution of India. The department submitted that the reason for exempting the Government owned, managed and aided schools from payment of building tax is in view of the fact that, the infrastructure and the maintenance of such schools are provided at the expense of the State and, therefore, a further levy of tax upon such buildings would create an additional burden upon them. The bench stated that since imparting free education or at very low expenses, is one of the primary functions of the State, giving incentives to building where such primary functions are carried out, so as to make it more feasible, by providing tax exemptions, can only be understood to be in furtherance of the objects of the enactments. The bench further stated that even in respect of the property tax, the purpose is to generate funds for the activities of the Government, but, at the same time, it is also to be ensured that the obligations of the Government to provide for welfare of citizens, including the obligation to provide education to all, are fulfilled without over burdening the institutions that are instrumental for fulfilling that obligations. Therefore, the creation of such classification is in tune with the objectives sought to be achieved by the statute. Regarding the question of intelligible differentia, the bench opined that going by the statutory provision impugned in this case, the exemption is contemplated, based on the purpose for which the building is used and also the ownership of such building. Even though the purpose for which such buildings are used is one and the same, irrespective of the persons/institutions owned, managed and aided such institutions, the fact that, the manner in which the institution is rendering services makes out a crucial distinction. When the Government owned, managed aided institutions are providing free education or education at very low cost, the unaided institutions are collecting fees from the students for rendering their services. This itself could be a basis for such classification which would in clear terms, would come within the purview of intelligible differentia, added the bench. In view of the above, the bench dismissed the petition. Case Title: Rev. Fr. Dr. Abraham Thalothil v. State of Kerala Case Number: WP(C) NO. 24012 OF 2023Citation: 2025 LiveLaw (Ker) 514 Counsel for Petitioner/Assessee: H. Ramanan Counsel for Respondent/Department: Deepa K.R. Click Here To Read/Download Order

No Violation Of Article 14 In Denying Property Tax Exemption To Unaided Schools: Kerala High Court

Mehak Dhiman

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