J.m. Mukhi v. Municipal Corporation Of Delhi

Sanjay Kishan Kaul, J.

1. The petitioner is a trustee of the Trust which Trust was granted the perpetual leasehold rights in pursuance to the deed dated 24th July, 1995 in respect of plot No. 5, Section C, Pocket 9, Vasant Kunj, New Delhi. The Trust received notice dated 14th August, 1997 under Section 124(5) of the DMC Act, 1957 (hereinafter called the said Act for short) proposing a rateable value and the petitioner filed objections to the same claiming exemption under Section 115(4) of the said Act. This was followed up by another notice and the replies filed thereto. The petitioners claims not to have received any communication of any assessment order thereafter till a notice under Section 154(1) of thewas received on 14th September, 1998 threatening to issue warrants of attachment for non-payment of the property tax. The petitioner approached this Court seeking quashing of the various notices as also for grant of exemption from payment of property tax.

2. In the counter-affidavit filed by the respondent, Corporation, it is stated that the matter relating to exemption of the respondent from property tax was considered but the exemption was not granted to the petitioner because the plot was purchased in the auction sale from the DDA and for commercial use and because usage of the same could only be known after construction of the building.

3. Learned Counsel for the petitioner further contends that though the said order has not been specifically impugned in the present writ petition, the petitioner was not aware of the passing of the said order when the present writ petition was filed and in any case the matter regarding the eligibility of the petitioner for exemption can be considered by this Court.

4. I have heard the learned Counsel for the parties and taking into consideration all the facts and circumstances of the case, I consider it appropriate to decide the question of the claim of the petitioner for exemption under Section 115(4) of the said Act.

5. It is not disputed that the property was purchased for commercial use on the terms and conditions as specified in the perpetual lease dated 24th July 1995. Further, the property was not constructed upon within a period of two years but further extension was sought from the perpetual lessor which extension was so granted. The question which thus arises for consideration is whether the petitioner would be entitled to any exemption from payment of vacant land tax as a consequence of the plot lying vacant and not being constructed upon.

6. The parameters for consideration for application under Section 115(4) of thehave been dealt with in a recent Division Bench judgment of this Court in National Institute of Immunology v. MCD, 96 (2002) DLT 41 (DB)=2002 (3) AD (Delhi) 392. Learned Counsel for the petitioner has also referred to the judgment of the Supreme Court in Christian Childrens Fund v. MCD & Ors., 54 (1994) DLT 442 (SC)=(1994) 4 SCC 337 [LQ/SC/1994/530] which has also been considered in the case of National Institute of Immunology (supra). Learned Counsel has referred to this judgment to substantiate the plea that even administrative office of organisations located where the charitable activity is carried on may be entitled to exemption.

7. There can be no dispute about the proposition that the portion of the property which has been put to charitable use and all incidental activities relating thereto may qualify a property for the exemption under Section 115(4) of the. This will, however, vary dependent on the facts of each case as also from year to year since the matter of exemption is not for all times to come but has to be examined in respect of the relevant year.

8. Even assuming that the Trust is to carry out charitable activity, the same would be done only when the building is complete and the building is put to the said use. It is at that stage that the respondent, Corporation will consider whether the Trust and the user to which the property has been put to would qualify for exemption under Section 115(4) of the. However, this stage has not arisen since the property is yet to be constructed upon.

9. Insofar as the contention of the learned Counsel for the petitioner that it is the charitable purpose of the society which has to be kept in mind and not the land use, I am of the considered view that the reading of Section 115(4) as well as the judgments passed by this High Court and the Supreme Court make it clear that not only the object of the society has to be seen for charitable purposes but the purpose for which the property is put to use has to be considered.

10. In respect of the relevant year where the property has not been constructed upon and is not being put to any use but is lying vacant pending construction by the petitioner, I am of the considered view that it cannot be said that the property is liable for exemption from property tax merely on account of the fact that ultimately the property may be put to such use as would qualify the property for exemption under Section 115(4) of the. For the year in question, only vacant land tax is to be levied which is so liable to be charged on vacant land not constructed upon.

11. In view of the aforesaid, I am of the considered view that the property in question is liable for vacant land tax for the period it is lying vacant. As and when the property is constructed upon and is put to charitable use, it is always open to the petitioner to file an appropriate application under Section 115(4) of theseeking exemption for that assessment year in question.

12. Writ petition is dismissed leaving the parties to bear their own costs.

CM No. 2257/99:

Dismissed.