1973 (12) TMI 100 - HC - Indian Laws

Summary

Issues Involved:
1. Legality of the enhancement of the rateable value of the property.
2. Eligibility for exemption from general tax under Section 115(4)(a) of the Delhi Municipal Corporation Act.
3. Whether the Nurses Hostel building qualifies as being used for a charitable purpose.
4. Adequacy of the alternative remedy available under Section 169 of the Delhi Municipal Corporation Act.

Detailed Analysis:

1. Legality of the enhancement of the rateable value of the property:

The petitioner, a charitable society, challenged the order of the Deputy Assessor and Collector, Municipal Corporation of Delhi, which increased the taxable value of its property from Rs. 81,600 to Rs. 2,81,910 for the year 1970-71. The enhancement was attributed to the addition of a Nurses Hostel building. The petitioner contended that the order lacked reasons for the increase and was therefore arbitrary. The court noted that the impugned order did not provide any rationale for the enhancement and thus suffered from a serious infirmity.

2. Eligibility for exemption from general tax under Section 115(4)(a) of the Delhi Municipal Corporation Act:

Section 115(4)(a) of the Act provides an exemption from general tax for lands and buildings used exclusively for charitable purposes, provided certain conditions are met. The petitioner argued that the entire property, including the Nurses Hostel, should be exempt as it was used for charitable purposes. The court examined the statutory provisions and noted that the petitioner society derived its income from voluntary contributions, did not pay dividends or bonuses to its members, and applied its income towards its charitable objectives. Therefore, the court found that the petitioner met the criteria for exemption under Section 115(4)(a).

3. Whether the Nurses Hostel building qualifies as being used for a charitable purpose:

The court analyzed whether the Nurses Hostel building, used for training student nurses and providing residential accommodation, qualified as being used for a charitable purpose. The court referenced cases such as Royal College of Nursing v. St. Marylebone Borough Council and Royal College of Surgeons of England v. National Provincial Bank Ltd to support the view that educational and training activities are charitable. The court concluded that the portion of the building used exclusively for training nurses should be exempt from general tax. However, the court noted that further investigation was needed to determine the exact use of other portions of the building, such as residential accommodation for regular nurses, to ascertain their eligibility for exemption.

4. Adequacy of the alternative remedy available under Section 169 of the Delhi Municipal Corporation Act:

The respondents argued that the petitioner should have pursued the alternative remedy of appeal under Section 169 of the Act. The court acknowledged that while an alternative remedy existed, it was not an absolute bar to the writ petition. The court emphasized that the appeal process required the petitioner to deposit the disputed amount, which could be onerous. Given the substantial amount involved and the apparent illegality in the assessment, the court exercised its discretion to entertain the writ petition. The court found that the assessment order lacked a proper basis and thus quashed the impugned order, remitting the matter back to the assessing authority for a fresh assessment in accordance with the law and the observations made in the judgment.

Conclusion:

The court allowed the writ petition, quashed the assessment order dated 20th September 1971, and remitted the matter back to the Deputy Assessor and Collector for a fresh assessment. The court directed that the reassessment should consider the observations made in the judgment, particularly regarding the eligibility for exemption of the Nurses Hostel building and other portions of the property used for charitable purposes. The court did not award costs, noting that the petitioner had also contributed to the need for reassessment by not providing full facts initially.