Amendment imposing property tax on pvt schools stayed

A division bench comprising Justice S Manikumar and Justice Subramonium Prasad on admitting the plea moved by All India Private Educational Institutions Association Represented by its state General Secretary K Palaniyappan also directed the government to file a reply within four weeks. The petitioner had contended that specific sections in Municipal Corporation Act pertaining to Chennai, Madurai, Coimbatore and Tamil Nadu District Municipalities Act which granted exemption to payment of property tax to educational institutions has been amended resulting in the exemption granted to private schools being taken away while retaining the privilege granted to schools run by the government, municipality and local bodies.

Noting that the issue of property tax exemption has been settled in various apex court decisions on the basis that the main object of educational institutions is to serve the need of people in a charitable basis, the plea said the amendment in turn defeated the very essence of the apex court’s orders and hence is arbitrary and illegal. Moreover, pleas on the larger question as to whether the educational institutions are entitled for exemption from property tax is pending before the SC as well as the MHC and with the issue yet to reach a finality, the state bringing about the amendment in a hurry is per se illegal.

The petitioner’s counsel E Vijay Anand had contended that the said amendment is illegal and unconstitutional as it restricted the fundamental right to establish an educational institution and the right to education guaranteed under constitution.

It was also pointed out that the State which has a duty to increase the budget for education has instead resorted to levying property tax on private educational institutions, which in turn will fall only on the shoulders of the parents and children. The plea also noted that the schools’ part of the association were not commercial enterprises but only a charitable, non-profit educational institution as held in TMA Pai case and hence any additional tax as property tax over the buildings of the educational institutions is arbitrary and unreasonable.