Jhaiji Shikshan Samiti Vs State of Chhattisgarh (Chhattisgarh High Court)
The Chhattisgarh High Court disposed of a writ petition filed by Jhaiji Shikshan Samiti, a registered society running an educational institution at Raipur, challenging property tax demand notices issued by the respondent Municipal Corporation and the communication dated 25.06.2026 rejecting its claim for exemption. The petitioner claimed that the land was being used exclusively for educational purposes and that the society was registered under Section 12A of the Income Tax Act, 1961, entitling the property to exemption under Section 136(c) of the Chhattisgarh Municipalities Act, 1961.
The petitioner stated that an earlier demand bill dated 06.03.2025 had been challenged in W.P.(C.) No. 1533 of 2025, following which the High Court, by order dated 25.03.2025, directed the Corporation to consider its representation. Despite this, further demand notices were issued, including a demand dated 20.02.2026. The petitioner submitted representations dated 25.02.2026 and 14.03.2026. The Corporation ultimately rejected the exemption claim on 25.06.2026, stating that the Section 12A registration pertained to Bemetara and not the Raipur property.
The petitioner further submitted that an earlier demand under Section 173 of the Chhattisgarh Municipal Corporation Act, 1956, covering financial years 2016-17 to 2025-26, sought Rs.23,99,565/-. Although objections had been filed under Section 173, no order had been passed under Section 174. A subsequent demand dated 25.06.2026 sought Rs.30,39,456/- for financial years 2016-17 to 2026-27, against which objections were again submitted, including the exemption claim.
The Municipal Corporation submitted that the petitioner had availed the statutory remedy by filing objections and that the objections would be considered, followed by an appropriate order under Section 174.
The High Court observed that Section 173 provides an opportunity to file objections against the demand, while the statutory scheme requires the competent authority to consider those objections and pass an order under Section 174. Since the petitioner’s objections, including its claim for exemption under Section 136(c), remained undecided, the Court directed the Municipal Corporation, Raipur, to consider and decide them by a reasoned and speaking order within 60 days from receipt of the order.
The Court did not express any opinion on the merits of the rival claims. It further directed that no coercive recovery steps be taken against the petitioner until expiry of the 60-day period or until the objections are decided, whichever is earlier. Thereafter, the petitioner would remain at liberty to pursue the statutory remedy available against the order passed under Section 174. The writ petition was accordingly disposed of, with no order as to costs.
FULL TEXT OF THE JUDGMENT/ORDER OF CHHATTISGARH HIGH COURT
1. By way of the present petition filed under Article 226 of the Constitution of India, the petitioner has challenged the demand notices issued by the respondent Municipal Corporation seeking recovery of property tax in respect of the land occupied by the petitioner educational institution. The petitioner has also challenged the communication dated 25.06.2026 whereby its claim for exemption from payment of property tax has been rejected. The petitioner has prayed for quashment of the impugned demand notices and for a direction to the respondent Corporation to grant exemption under Section 136(c) of the Chhattisgarh Municipalities Act, 1961.
2. The petitioner has prayed for issuance of the following reliefs: “i. To call for the entire records of the case;
i. To kindly quash the demand bill dated 25/06/2026 and further quash order/letter dated 25/06/2026 and declare such notice as illegal and without authority of law as the Petitioner society is not liable for payment of property tax in accordance with the provisions of Chhattisgarh Municipal Corporation Act, 1956;
ii. To kindly declare that the Petitioner society is exempted from payment of property tax under the provisions of Chhattisgarh Municipal Corporation Act, 1956
iii. To kindly make any other order that may be deemed fit and just in the facts and circumstances of the case including awarding of the costs to the Petitioner.”
iv. Facts of the case are that the petitioner is a registered society running an educational institution at Raipur. It is the case of the petitioner that the land in question is being used exclusively for educational purposes and that the petitioner society is duly registered under Section 12A of the Income Tax Act, 1961. According to the petitioner, such property is exempt from payment of property tax under Section 136(c) of the Chhattisgarh Municipalities Act, 1961. It is submitted that the respondent Corporation initially issued a demand bill dated 06.03.2025 demanding property tax, whereafter the petitioner preferred W.P.(C.) No. 1533 of 2025. This Court, by order dated 25.03.2025, directed the respondent Corporation to consider the representation submitted by the petitioner. However, despite the said direction, the respondent continued to issue fresh demand notices, including the demand bill dated 20.02.2026. The petitioner submitted representations dated 25.02.2026 and 14.03.2026 claiming exemption. Ultimately, by communication dated 25.06.2026, the respondent rejected the petitioner’s claim on the ground that the registration under Section 12A of the Income Tax Act pertained to Bemetara and not to the property situated at Raipur. Aggrieved thereby, the present petition has been filed.
4. Learned counsel for the petitioner submits that earlier a demand notice under Section 173 of the Chhattisgarh Municipal Corporation Act, 1956 was issued for the financial years 2016-17 to 2025-26 demanding a sum of Rs.23,99,565/-. Against the said demand, the petitioner had submitted objections under Section 173 of the Act. However, no order was passed on the objections as contemplated under Section 174 of the Act. It is further submitted that thereafter another demand notice dated 25.06.2026 has been issued under Section 173 of the Act demanding a sum of Rs.30,39,456/- for the financial years 2016-17 to 2026-27. On the very same date, the petitioner again submitted objections raising the plea that it is entitled to exemption under Section 136(c) of the Chhattisgarh Municipalities Act, 1961 as the institution is registered under Section 12A of the Income Tax Act, 1961 and the property is being used exclusively for educational purposes. Learned counsel submits that although this Court had earlier directed the respondent Corporation to consider the petitioner’s objections, no order has yet been passed under Section 174 of the Act. Instead, fresh demand notices continue to be issued every year without adjudicating the petitioner’s claim for exemption. It is argued that unless the objections are decided, the petitioner is deprived of the statutory remedy available under the Act.
5. Learned counsel appearing for the respondent Municipal Corporation submits that since the demand has been issued under Section 173 of the Chhattisgarh Municipal Corporation Act, 1956, the petitioner has already availed the statutory remedy by filing objections. It is submitted that the respondent Corporation shall consider the objections filed by the petitioner and thereafter pass an appropriate order under Section 174 of the Act in accordance with law.
6. I have heard learned counsel for the parties and perused the material available on record.
7. From the record, it appears that the impugned demand notices have been issued under Section 173 of the Chhattisgarh Municipal Corporation Act, 1956. The statutory scheme itself provides an opportunity to the assessee to file objections against such demand, whereafter the competent authority is required to consider the same and pass an order under Section 174 of the Act.
8. In the present case, it is not disputed that the petitioner has already submitted objections, inter alia, claiming exemption from payment of property tax under Section 136(c) of the Chhattisgarh Municipalities Act, 1961. Admittedly, the said objections are yet to be finally adjudicated by the competent authority.
9. In the considered opinion of this Court, the petitioner’s claim regarding exemption is required to be examined by the competent authority while deciding the objections in accordance with the provisions of the Act. Once an order is passed under Section 174, the petitioner shall be at liberty to avail such further statutory remedy as may be available under law.
10. Accordingly, without expressing any opinion on the merits of the rival claims, the present writ petition is disposed of with a direction to the respondent Municipal Corporation, Raipur, to consider and decide the objections submitted by the petitioner against the impugned demand notice, including the claim for exemption under Section 136(c) of the Chhattisgarh Municipalities Act, 1961, by passing a reasoned and speaking order strictly in accordance with law, within a period of 60 days from the date of receipt of a copy of this order.
11. It is made clear that after the order is passed under Section 174 of the Act, it shall be open to the petitioner to assail the same before the competent forum in accordance with the statutory remedy available under law, if so advised.
12. Till expiry of the aforesaid period of 60 days, or till the objections are decided, whichever is earlier, no coercive steps for recovery of the impugned demand shall be taken against the petitioner.
13. With the aforesaid observations and directions, the writ petition stands disposed of.
14. No order as to costs.
