The judgment of the court was delivered by
SHARMA J.-The petitioner claims exemption under section
115(4)(a) of the Delhi Municipal Corporation Act, 1957, from the liability of
paying general tax leviable under the said section.
The case of the petitioner is that it is a
non-profit-making registered society and its object is, to organize and run
schools in Delhi and elsewhere with a view to promote education and welfare.
Accordingly, it is running school with the name of General Raj's School in Delhi
in a building constructed for that purpose. A demand was made by the appropriate
authority of the Municipal Corporation for payment of general tax under the Act
and the exemption claimed by the petitioner was rejected. In this situation, the
petitioner moved the Delhi High Court under article 226 of the Constitution for
appropriate relief. The writ petition was dismissed in limine by the following
order :
"The only question that arises for consideration is
whether the school run by the society falls within the ambit of clause (4) of
section 115 of the Delhi Municipal Corporation Act. Reading this section, it is
obvious that exemption from levy of general tax could be granted if the society
which is running the school was a society for charitable purposes. Charitable
purpose is defined in the Explanation to clause (4) of section 115. No doubt the
school is imparting education but in order to qualify for exemption, it had to
give education and medical relief. Admittedly, fees are charged from students.
Mere imparting of education cannot be called giving relief We, therefore, find
nothing wrong with the stand taken by the Municipal Corporation of Delhi.
Dismissed."
The present civil appeal by special leave is directed
against this judgment.
Learned counsel for the petitioner has contended that, in
view of the language of section 115(4)(a) quoted below, it is not correct to
suggest that to qualify for exemption from the tax liability, it is necessary
for society to offer medical relief:
"(a) lands and buildings or portions of lands and
buildings exclusively occupied and used for public worship or by a society or
body for charitable purpose :
Provided that such society or body is supported wholly or
in part by voluntary contributions, applies its profits, if any, or other income
in promoting its objects and does not pay any dividend or bonus to its members.
Explanation. -'Charitable purpose' includes relief of the
poor, education and medical relief but does not include a purpose which relates
exclusively to religious teaching;"
The argument is well founded. The test of "charitable
purpose" is satisfied by the proof of any of the three conditions, namely,
relief of the poor, education or medical relief. The fact that some fee is
charged from the students is also not decisive inasmuch as the proviso indicates
that the expenditure incurred in running the society may be supported either
wholly or in part by voluntary contributions. Besides, the Explanation is, in
terms, inclusive and not exhaustive. The impugned judgment must, therefore, be
held to be erroneous.
Mr. S. Sen, learned counsel representing the
respondent-Municipal Corporation, contended that although he is not in a
position to support the reasoning given by the High Court, the petitioner is,
for other reasons, not entitled to the exemption claimed and the High Court's
judgment is, therefore, correct. He urged that, in view of the relevant facts
and circumstances in the case, as is evident by the assessment order, the claim
of the petitioner that its purpose is charitable cannot be accepted. Since the
High Court has not adverted to the facts of the case relied upon by learned
counsel for the parties and has not expressed its opinion on the other aspects
of the case, we are of the view that the case should go back on remand to it for
fresh decision. During the pendency of the case in this court, the parties have
filed further affidavits. It will be open to them to file additional affidavits
and other materials in support of their respective cases. This, however, they
should do within one month from today, so that the case which is an old one may
be disposed of expeditiously.
Civil Miscellaneous Petition No. 11315 of 1989 has not
been pressed and is, therefore, dismissed ; and Writ Petition No. 265 of 1980 is
permitted to be withdrawn as prayed for on behalf of the petitioner. Civil
Appeal No. 43 of 1982 is allowed and the case is remitted to the High Court for
fresh decision in the light of the observations made above. There will be no
order as to costs of this court. In view of the urgent nature of the case, the
High Court is requested to dispose of the writ petition as expeditiously as
possible
