HC grants interim relief to TN schools from property tax

The Madras High Court Friday issued an interim stay on amendments to state legislations that brought educational institutions in Tamil Nadu's municipal areas under the property tax ambit of local authorities.

A division bench comprising Justices S Manikumar and Subramonium Prasad, after hearing a Public Interest Litigation plea from All India Private Educational Institutions Association granted the relief.

The AIPEI submitted that a similar petition that challenged levying of property tax on educational institutions in panchayat areas in Tamil Nadu was pending before the Supreme Court.

According to the petitioner, relevant provisions under separate municipal corporation Acts for Chennai, Madurai, Coimbatore and the Tamil Nadu District Municipalities Act provided exemption to property tax to educational institutions.

Such provisions were amended early this year by the state taking away the exemption allowing only the government, municipal and other local bodies' run schools to get exemption.

The AIPEI's petition said that when Tamil Nadu District Panchayats Act was amended-effective August 6, 2009- empowering the panchayats to levy property tax for educational institutions it was challenged in the High Court.

However, the court had upheld it saying the government had the power to cancel the exemption granted to educational institutions.

Aggrieved, a Special Leave Petition was filed in the Supreme Court and is pending.

Therefore, the larger question as to whether the educational institutions were entitled for property tax exemption is before the apex court.

When that matter has not reached finality, the authorities were in a hurry to levy property tax on educational institutions in the limits of municipal corporations, which was illegal, the petitioners contended.

Many of the members of the petitioner association were issued with the demand notices calling upon them to pay the property tax, the petitioner's counsel said.

The court has directed the registry to tag the present plea along with the a batch of similar petitions.