2022 (9) TMI 940 - HC - VAT and Sales Tax

Eligibility for exemption in terms of the provisions of the Tamil Nadu Urban Land Tax Act, 1966 - income derived from the letting out of the lands, utilized fully for the purposes of the temple - section 27 of Tamil Nadu Urban Land Tax Act, 1966 - rejection of exemption solely on the ground that no undue hardship is caused to the petitioner by calling upon it to remit tax - HELD THAT - With the recognition of, and exemption granted to religious institutions by virtue of the authority under Section 27 of the Act, there is a presumption that the payment of Urban Land Tax causes undue hardship to them. The authority has erred in revisiting the aspect of undue hardship, as it has been taken none of the accepted by the State in the aforesaid Government Order. There is no other reason for the denial of exemption and the impugned order is thus set aside. Grant of exemption - HELD THAT - G.O.Ms.No.1834, Revenue Department, dated 29.10.1983 was passed taking note of the suggestions of the Urban Land Tax Exemptions Committee constituted under G.O.Ms.No.461, Revenue Department, dated 17.03.1983, as it was felt that the criteria for grant of exemption should be revisited and reformulated - Since admittedly, R1 has lost sight of the applicable G.O. and has rejected the claim of exemption on an erroneous premise, while setting aside the order, the petitioner is permitted to appear before the Authority on 25.07.2022 without awaiting any further notice with a copy of the financial records (though the same are already on record) as well as any other documents for establishing its entitlement for exemption. Petition disposed off.

Summary

Issues:
Challenge to proceedings of the Commissioner of Land Reforms regarding exemption from Urban Land Tax for a religious temple.

Analysis:
The petitioner, a public religious temple, challenged the proceedings of the Commissioner of Land Reforms regarding exemption from Urban Land Tax. The temple claimed that the income from letting out lands was fully utilized for temple purposes. The lands were part of the Statutory Property Register under the Hindu Religious and Charitable Endowments Department. The temple management was as per a scheme formulated in 1969. The petitioner sought exemption under the Tamil Nadu Urban Land Tax Act, 1966, which was initially denied in 2018 but reconsidered later.

The Commissioner passed an order considering the financial records of the temple and found that the rental income was utilized only for temple purposes. However, the exemption was rejected as the Urban Land Tax was deemed insignificant compared to the total expenditure, causing no undue hardship to the petitioner. The decision was based on Section 27 of the Act, allowing exemption if the tax payment caused undue hardship.

The judgment highlighted Section 29 of the Act, which exempts urban land owned by religious institutions used for public worship. The lands in question did not fall under this exemption. The respondents defended the order citing Government Orders (G.O.) mandating conditions for exemption, although the rejection was not based on a specific G.O. from 1983. The court noted a series of G.O.s recognizing religious institutions for exemption from Urban Land Tax, indicating undue hardship.

The court set aside the order, emphasizing that the authority erred in revisiting undue hardship as it was previously accepted in the G.O.s. The judgment referred to G.O.Ms.No.1834 from 1983, outlining revised norms for exemption criteria. The petitioner was permitted to appear before the Authority with financial records to establish entitlement for exemption based on the G.O. criteria. The court directed the Commissioner to pass a new order within four weeks in line with the G.O. parameters.

In conclusion, the Writ Petition was disposed of with no costs, allowing the petitioner to present evidence for exemption under the specified G.O. criteria. The case was listed for a follow-up on the production of orders.