MC can charge property tax from unaided private schools

CHANDIGARH: The Punjab and High court has held that MC can charge property tax from all unaided educational institutions of Chandigarh and also held Chandigarh Municipal Corporation (Tax on Commercial, Industrial and Institutional Lands and Buildings) Bye-Laws, 2003 along with Self Assessment Scheme are legal and valid .Giving no relief to unaided private schools and By allowing the appeal , HC directed that MC can charge property tax from all unaided educational institutions of Chandigarh. After this order, after 8 years, MC would be able to charge property tax from unaided private schools.
The Appeals were by the Municipal Corporation and UT Chandigarh challenging the single bench judgment of HC which was pronounced on 24.09.2010 whereby HC had disposed of a bunch of writ petitions filed by various un-aided private schools challenging the imposition of property tax on them. HC had allowed the writ petitions. Single bench of HC had also quashed The notification dated 22.11.2004 issued under Section 90(3) of the Punjab Municipal Corporation Act, 1976 which was extended to Chandigarh by the Punjab Municipal Corporation (Extension to Chandigarh) Act 1994 specifying the rate of property tax on `institutional lands and buildings‘ .Also The Bye-laws and Self-Assessment Scheme as framed were also quashed.

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Schools had moved to HC against this notification issued by UT stating that it survives financially solely on the fee collected from the students. They have no other source of income as they receive no funds or aid from the Government.

It was argued that land allotted to unaided private schools was owned by the Union government and same was allotted or leased according to Chandigarh Leasehold Site and Building Rules 1973. Hence UT notification imposing tax was out of jurisdiction. It was also stated that according to Municipal Act, it was the state government that could access the tax.

However, UT and MC filed appeal against this order and clarified that UT Senior standing counsel Pankaj Jain stated that it was typographical error. The act was drafted by MC only but while issuing the notification the name of UT was mentioned instead of MC, it was clarified that it was notified by MC of Chandigarh.

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