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Kerala HC dismisses Property Tax Exemption Plea of Self-Financing Colleges [Read Judgment]

Property Tax - ITAT

The Kerala High Court dismissed the plea of self-financing colleges seeking property tax exemption. The petition was dismissed while jointly considering fourteen petitions file by self-financing colleges that challenged the provisions of Kerala Panchayat Raj Act and Kerala Municipality Act, 1994, by the bench consisting of Justice A.K.Jayasankaran Nambiar.

The petitioners challenged the amendment to the clause exempting property tax for buildings of educational institutions. The Amendment clause now allows property tax exemptions to buildings of government and aided institutions only. The petitioners further alleged that the amendment is discriminatory in nature.

The Government of Kerala, on the other hand, pointed to the role the government-funded educational institutions’ contribution to the high human development indicators. The government further pointed out that the tax exemptions are granted to these institutions, keeping in mind the contributions the institutions make to the education sector without seeking any monetary gain. The government further stated that large private institutions are profitable enterprises. While the sole aim pursued by these government and government-funded institutions are imparting quality education to the students without monetary gains.

The Kerala High Court, citing cases laws of Supreme Court, held that the  “tax concessions envisaged under the Acts are intended to provide a level playing field for Government/aided educational institutions on the one hand and the self-financing educational institutions on the other.”

The High Court further clarified that the, “Tax concessions have been granted to the former category, keeping in mind the role played by them in discharging the sovereign obligation of the State to provide education, despite the economic limitations faced by them. It is trite that Government and Government Aided Educational institutions are subjected to a different system of control when compared to Unaided Educational institutions that do not function under the restrictions imposed on the former category in respect of collection of fees and payment of salaries/wages to teaching and non-teaching staff.”

To Read the full text of the Order CLICK HERE
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