Dharamsala offers Services at Nominal Rent,  not a  Commercial Activity: P&H HC quashes Auction order

The division bench of Punjab and Haryana High Court (HC) consisting of Justices Ritu Bahri and Manisha Batra quashed the public auction order issued by the authorities against the petitioner.

The coram stated that if dharamshala is made available for holding weddings at a modest rent, it will not constitute a commercial purpose. The dharamshala in this instance is offered for a minimal fee and is not a commercial endeavour.

The court noted that there are private institutions that are very expensive and designed specifically for marriages; these institutions can be considered to be engaged in the business of performing weddings.

According to the order dated 14.03.2007, Annexure P-1, notice of demand including arrears up to 2005-06 in the prescribed forms were served upon the assesses via bill no. 56/2417 dated 12.07.2005 for an amount of Rs.1014217 in accordance with Section 128 of the Haryana Municipal Corporation Act, 1994. The tax on lands and buildings of the petitioner was assessed at Rs.225989 per annum.

The Joint Commissioner used his or her authority under Commissioner 401(2) of the Haryana Municipal Act, 1994 to order the attachment of plot number Khan Daulat Dharamshala and the building built thereon. He or she also directed that the property be put up for public auction in the Municipal Auditorium in order to recoup the tax.

In the instant case, the bench observed that the institution is for religious purpose and as per the notification dated 30.09.2003, Annexure P-6 issued by the government, all religious buildings and lands shall be exempted from the payment of tax. 

As per the provisions, the petitioner's case falls under sub-clause (1) as it is a Dharamshala and as per the proviso, this exemption from house tax cannot be given to any property if any portion thereof has been constructed or used for commercial purposes.

The sub clause (1) states that : All mosques, temples, churches, dharamshalas, gurudwaras, charitable hospitals, orphan alm houses, drinking water fountains, Municipal Corporation buildings and lands, cremation grounds, Muslim and Hindu graveyards, Christian cemeteries, imambaras, Government Nazul lands under the management of Municipal Corporation, Faridabad, agricultural lands which are cultivated and are assessed to land revenue.

The petitioner, Dharamshala, charging money for marriage-related purposes is the only reason for not granting the advantage of exemption. The position adopted by the respondents is that the petitioner, Dharamshala, has not engaged in any kind of philanthropic activity and has instead made money by renting the building out for weddings and other commercial events. The respondents have not asserted any more grounds to save this.

To Read the full text of the Order CLICK HERE

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