Indian Institute of Technology Vs State of U.P. and Another (Allahabad High Court)
In a significant development, the Allahabad High Court has stayed a substantial demand of Rs. 47.06 crores in service charges imposed on the Indian Institute of Technology (IIT) Roorkee by the Municipal Corporation, Saharanpur. The demand, based on a decades-old office memorandum from the Government of India, was challenged by IIT Roorkee on several grounds, leading to this interim relief. The case raises important questions about the applicability of municipal service charges on educational institutions and the interpretation of central government guidelines.
Background of the Case
The dispute centers around a demand notice issued on May 10, 2024, by the Municipal Corporation of Saharanpur, asking IIT Roorkee to pay Rs. 47,06,67,775 as service charges. This sum includes Rs. 3.26 crores as current dues and Rs. 43.80 crores as arrears with interest. The demand was primarily based on an office memorandum dated March 29, 1967, issued by the Ministry of Finance, Government of India, which outlines the liability of institutions to pay service charges to municipal bodies, even if they are exempt from municipal taxes.
Arguments by IIT Roorkee
IIT Roorkee, represented by Shri Rohan Gupta, challenged the demand on multiple grounds:
- Exemption from Taxes: The petitioner argued that as a central government institution, IIT Roorkee is exempt from municipal taxes, and by extension, should not be liable for service charges.
- Judicial Precedent: The petitioner cited a previous ruling by the Allahabad High Court in the case of Banaras Hindu University v. State of U.P. (2010), where a similar office memorandum was scrutinized. In that case, the court held that statutory corporations and societies, even if established by the Union Government, are not covered by the memorandum, implying that such institutions should not be liable for service charges.
- Non-usage of Municipal Services: It was also contended that IIT Roorkee does not utilize the services provided by the Municipal Corporation, thereby making the demand for service charges unwarranted.
Arguments by the Respondents
