Rev. Fr. Dr. Abraham Thalothil Vs State of Kerala (Kerala High Court)
Conclusion: Since Government owned, managed and aided schools were established by the Government at their funds in order to provide education to all classes of persons by collecting nil or meagre fees, was a crucial factor which distinguished such establishments from an unaided school, where fees was collected from the students for rendering the services, therefore, there was no violation of Article 14 in denying property tax exemption to unaided schools.
Held: Assessee were unaided schools or the trust/organizations conducting unaided educational institutions, which were imparting education upto the standard twelve. The issue raised in the petition, pertained to the amendment made to the provisions of the Kerala Panchayat Raj Act, 1994 and Kerala Municipality Act, 1994, which deal with the exemption from paying the property tax, to the buildings exclusively used for educational purposes or educational allied purposes under the ownership of such educational institutions. As per assessee they were deprived of the exemption from payment of building tax for the buildings in which they were conducting educational institutions. The exemption enjoyed by them until 31.03.2023 was taken away by the Government, as per the aforesaid amendment. Assessee submitted that the exclusion of unaided schools from the purview of exemption of tax, while retaining the exemption to the schools owned, managed and aided by the Government, was amounting to unreasonable classification and, thus, violated the principles of equality before law, as contemplated under Art.14 of the Constitution of India. Department submitted that the reason for exempting the Government owned, managed and aided schools from payment of building tax was in view of the fact that, the infrastructure and the maintenance of such schools were provided at the expense of the State and, therefore, a further levy of tax upon such buildings would create an additional burden upon them. It was held that since imparting free education or at very low expenses, was one of the primary functions of the State, giving incentives to building where such primary functions were carried out, so as to make it more feasible, by providing tax exemptions, could only be understood to be in furtherance of the objects of the enactments. Even in respect of the property tax, the purpose was to generate funds for the activities of the Government, but, at the same time, it was also to be ensured that the obligations of the Government to provide for welfare of citizens, including the obligation to provide education to all, were fulfilled without over burdening the institutions that were instrumental for fulfilling that obligations. Therefore, the creation of such classification was in tune with the objectives sought to be achieved by the statute. Even though the purpose for which such buildings were used was one and the same, irrespective of the persons/institutions owned, managed and aided such institutions, the fact that, the manner in which the institution was rendering services made out a crucial distinction. When the Government owned, managed aided institutions were providing free education or education at very low cost, the unaided institutions were collecting fees from the students for rendering their services. This itself could be a basis for such classification which would in clear terms, would come within the purview of intelligible differentia, added the bench.
