Municipal Council, Tirupathi Vs.
Tirumalai Tirupathi Devasthanam [1974] INSC 23 (6 February 1974)
GOSWAMI, P.K.
GOSWAMI, P.K.
BHAGWATI, P.N.
CITATION: 1974 AIR 521 1974 SCR (3) 924 1974
SCC (1) 683
ACT:
Madras District Municipalities Act, 1920--S.
83(1)(b)--Whether Tirumalai Tirupathi
Devasthanam New Choultry is exempt from property tax.
HEADNOTE:
The plaintiff/respondent filed a suit in the
court of Subordinate Judge, for a declaration that the building, known as
"Tirumala Tirupathi Devasthanam New Choultry" is exempt from property
tax u/s. 83(1)(b) of the Madras District Municipalities Act, 1920 and for
directing the defendant, the Municipal Council, Tirupathi, to refund the sum of
Rs. 22,306.40 paid under protest.
According to the plaintiff, the said building
is a free Devasthanam Choultry intended purely for the convenience of the
visiting pilgrims and therefore, exempt from property tax. The defendants' case
is that while pilgrims are accommodated in the ground floor free of charge, the
rooms in the first floor are rented out to pilgrims and others.
Further, the plaintiff was deriving a very
large income from the various stalls and shops situated inside the premises of
the choultry and therefore not exempt from tax.
The learned Sub-Judge dismissed the suit but
on appeal, the High Court reversed the judgment and decree of the trial- court
and decreed the plaintiff's suit holding that the plaintiff is entitled to
exemption under s. 83 of the Act.
S. 83(1) of the Act provides as follows
"The following building and lands shall be: exempt from the property tax:-
(a) (b) choultries for the occupation of which no rent is charged and
choultries the rent charged for the occupation of which is used exclusively for
charitable purposes;" Dismissing the appeal,
HELD:(i) The word "choultry" is not
defined in the Act. The word however, means a shelter or resting place for
travellers.
(Law Lexicon of British India compiled and
edited by Ramnatha Aiyar, 1940 Ed.) (ii)Choultry is indeed an ancient
institution and is principally meant for lodging of pilgrims and travellers. it
is conceivable that in 1884, when the first Municipal Legislation was passed in
Madras, such institutions were some humble sheds; but in course of time, such
institutions grew in size and more and more demands were made of them for
comfort and convenience of the pilgrims. Therefore, it would be necessary to
look at the institution from the point of view of the predominant intention
which guides the building up of the complex as a whole.
(iii)In the present case, the choultry cannot
be divorced from the other offices, shops and concerns which are mainly located
within its precincts in order to render much-needed services to the pilgrims.
It is clear that the entire income is used exclusively for the purpose of the
choultry which is indeed a charitable purpose. Therefore, the case falls
squarely under sec. 81(1)(b) and therefore exempt from property tax.
295 Kesarpalli Amaneyelu and another V. Eluru
Municipality, by its Executive Officer The commissioner and another, [1964]
I.L.R. Andhra Pradesh (Part IV) 379, Sri Kayakaparameswari Anna Satram
represented by the Secretary, Sri Batchu Venkateswarlu v. The Vijayawada
Municipality, represented by its Executive Officer, The Municipal Commissioner [1959]
2 Andhra Weekly Reporter, 325; Kandandaram Pillai v. The Municipal Council,
Trichinopoly, [1933] 65 M.L.J. 678 and Pandarasannadhi, Tiruvannamalai Adhinam
v. The Corporation of Madras[1941] 2 M.L.I. 544, referred to and distinguished.
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 568 of 1969.
From the judgment and decree dated the 27th
February, 1968 of' the Andhra Pradesh High Court in Appeal No. 117 of 1963.
M. Natesan, K. Jayaram and Y.
Chandrasekheran, for the appellant Krishnarao, E. Kalvanaram and G. N. Rao, for
the respondent.
The Judgment of the Court was delivered by
GOSWAMI, J.-This appeal by the dependent in the original suit is by certificate
granted by the High Court of Andhra Pradesh to appeal against the judgment and
decree of the said Court of 27th February, 1968. The facts may briefly be
stated.
The respondent (hereinafter to be described
as the plaintiff) is the; Tirumalai Tirupathi Devasthanam represented by its
executive officer. The plaintiff instituted a suit in the court of the
Subordinate Judge, Chittoor, on 10th March, 1961, praying for a declaration
that the building known as "Tirumala Tirupathi Devasthanam New
Choultry" situated within the area of the Municipal Council Tirupathi
(hereinafter described as the defendant) bearing assessment No. 5361 of
Tirupati Municipality, is exempted from property tax under section 83 (1) (b)
of the Madras District Municipalities Act 1920 (Madras Act V of 1920), briefly
the Act, and for directing the defendant to, refund the sum of Rs. 22,306.40,
the amount of tax so far paid under protest. It appears that the plaintiff paid
property tax in respect of this budding for several years under protest and
without prejudice to its right to file a suit. After the plaintiff failed to
get redress from the authorities, the suit was filed. The plaintiff states in
the plaint ,that the said building is a free Devasthanamas choultry intended
purely for the convenience of the pilgrims visiting the famous Holy Shrine of
Sri Venkateswara Swami at Tirumala and other Devasthanams attached to the
plaintiff Devasthanams and is used solely and' exclusively for the said purpose
and no other". The plaintiff further inter alia, avers in para 7 of the
plaint as follows :- "The defendant has failed to note and take into
consideration, as it ought to have the fact that the canteen, the Firewood
stores, the Transport office Workshop, Garages, the galvanized Iron Sheet sheds
for parking the Transport vehicles, the Railway Booking Office, the Mysore
Government Transport Office, the Devastbanams Sanitary Inspector's Office, the
Enquiry Office, Garages of cars, shed for Water pump, Laundry, Hair-cutting
Saloon, the Post Office and 296 Free Medical Dispensary, are all located within
the schedule mentioned premises only with a view to providing conveniences
which the plaintiff is under a statutory obligation to provide to the visiting
pilgrims without deriving any rents, returns, profits or other receipts."
The defendant resisted the suit. It denied in the written statement that the
building "is an out and out free Choultry". The defendant further
avers that "while pilgrims are accommodated in the ground .floor portion
of the Choultry free of charge, the rooms in the first floor are rented out to
Pilgrims and others. Further in the main building. :as well as in the other
buildings within the compound of the choultry, there are several shops, stalls
and offices. There is the canteen, which ,admittedly caters not only to the
pilgrim visitors staying in the choultry but also to the general public. There
is a brass vessel shop, a fire wood depot, a Transport Office, a motor workshop
with 9 garages, a Railway Booking Room, a Mysore Transport Office Room, the
Sanitary Inspector's Office Room, Enquiry Office, 6 garages, (2) residential portions
for Superintendent, a water pump shed, a laundry, a barber shop, and a Post
Office. It will be seen that the business in several of the above shops and
stalls and the amenities provided therein are not solely connected with the
purpose of either the choultry or the worship in the temple. The plaintiff is
deriving a very large income from the said stalls and shops........ The annual
rental value of the 'building was calculated only after excluding the portions
that are- being used for the purposes of the free choultry".
By consent of parties, a large number of
documents were marked as exhibits, and the plaintiff examined only the
Superintendent of the New Choultry as the sole witness while the defendant did
not adduce any oral evidence. The Subordinate Judge dismissed the suit
observing as follows :- "On considering all these aspects I am of opinion
that neither the several offices and shops situated within the premises of the
choultry, nor the furnished rooms in the main choultry are entitled to exemption
from property tax under section 83 of the Madras District Municipalities
Act".
The Trial Court relied upon the decisions in
Sri Kanyakaparameswari Anna Satram, represented by the Secretary, Sri Batchu
Venkatesswar v. The Vijayawada Municipality, represented by its Executive
Officer, the Municipal Commissioner(1) and Madura Municipal Council through its
Commissioner, Rajiah D. Paul v. Madura etc., Devasthanams represented by its
Executive Officer, R. S. Nayudu (2) and rejected the plaintiff's claim. On appeal
by the plaintiff to the High Court of Andhra Pradesh, the Division Bench
reversed the judgment ,and decree of the Trial Court and decreed the
plaintiff's suit holding that the plaintiff is entitled to exemption under
section 83 or the Act.
(1) 1959 (2) Andhra Weekly Reporter 325.
(2) A. I. R. 1942 Madras 658.
297 The evidence in the case is absolutely
one sided and there is no controversy about the facts. The High Court has found
that "there is only one institution, one building and that building provides
for rest of the pilgrims who visit the place and the pilgrims are numerous to
common knowledge. It is not enough to have merely accommodation in building but
the people would like to 'have other amenities and it is the other amenities
that are provided as stated above.
Therefore we have to treat all these
including the rooms as one single unit which is intended for resting of the
pilgrims who visit the place and should not as the lower court did, separate
these amenities from the main institution. No rent is charged except in one
case where there is one brass co-operative store which pays Rs. 30/- per month
towards rent. In this case the test laid down for deciding whether the
institution is a choultry or not is fully satisfied as there is much accommodation
in the ground and first floor for resting place. What is objected to and
contended is that it ceases to be, a choultry with all these amenities.
provided there. In our opinion if the institution is essentially one for
providing rest and shelter for pilgrims, the mere fact that there are amenities
attached to the institution should not detract from its being, a choultry. On
the other hand it amplifies and provides more comforts to the pilgrims without
charging anything for them". The High Court also found that "the
amount collected for services and other amenities is far less and it is not
sufficient to meet the expenditure to run the choultry.......... What is
derived by the choultry is only an amount of Rs. 15000/- and odd which is
service charges. But over and above that a large amount which equals double the
amount is spent. The charges, therefore, must necessarily, have been spent and'
are spent, as accounts show, for purposes of charity and whatever is collected,
whether from the cooperative society at the rate of Rs. 30/per mensem or
service charges levied from the pilgrims, it is only a small amount. All this
amount is not sufficient to meet the annual' expenditure of the institution and
the balance must come from the pocket of the Devasthanam. It is therefore
difficult to accept the con- tention that there is no proof that the
collections were applied exclusively for the choultry. The expenditure is one,
the institution is one and the collections are also exclusively for services
connected with the institution and not by way of rent. All these indicate and
point to the conclusion that the collections are applied only for purposes of
charity. It is not a business and the institution is not making any profit and
profit-motive is not behind the actions of the Devasthanam in levying small
charges for the services rendered. All these charges are meant mainly for the
30 rooms in the first floor." The High Court came to the above findings
and also noticed "that the learned Subordinate Judge over-looked the fact
that there were rooms on the ground floor and they are also used for the
pilgrims".
Mr. Natesan, learned counsel for the
appellant, submits that the plaintiff cannot in law claim exemption under
section 83 (1) (b) of the Act. We may, therefore, read the material provisions
in the section with which we are concerned :
298 83(1) "The following buildings and
lands shall be exempt from the: property tax :- x x (b) choultries for the
occupation of which no rent is charged and choultries the rent charged for the
occupation of which is used exclusively for charitable purposes;" x x The,
word "choultry" is not defined in the Act. The word is ,defined in
the Law Lexicon of British India compiled and edited by Ramanatha Aiyar, 1940
edition, as follows :- "Choultry : Chatram, A choultry is a corruption of
chavadi. It means a shelter or resting place for travellers. A chathram
(corruption of the Sanskrit Sathram) is a house where pilgrims and travellers
are fed".
In the Shorter Oxford English Dictionary, choultry
is described as an Anglo-Indian word "being corruption of Telugu
chawadi" and its meaning is given as "A caravanserai". In
Wilson's Glossary of Judicial and Revenue Terms, second edition, page 108,
"he word is given in different forms such as Chawati or Chauti, corruptly,
Choltry or Choultry and the meaning is given as "A public lodging place, a
shelter for travellers".
The earliest Act on the subject in Madras is
the Madras DiStrict Municipalities Act of 1884. Even there under section 63(1),
amongst others, choultries were exempted from payment of tax on buildings and
lands. The word choultry was not defined even in that Act. The present Act of
1920 has repealed the aforesaid old Act under section 2 read with Schedule 1.
In the absence of a statutory definition in the Act, recourse has to be taken
to the meaning attributed to the word in the dictionaries and the law lexicons
as well as to the popular concept of the term. Choultry is indeed an ancient
institution and is principally meant for lodging of pilgrims and travellers. It
is conceivable that in 1884, when the first municipal legislation was passed in
Madras.
such institutions were some humble sheds and
other structures to enable, the pilgrims to stay for a short while when they
came to visit temples and other religious places.
This institution, like similar others
elsewhere, has come to stay as a symbol of religious and charitable disposition
of human mind translated into physical manifestation in the shape of safe
shelter for the pilgrims. As man advances and ideas grow and expand, with his
ever increasing desire for comfort and convenience, the shape of the choultry
must needs also change. It is, therefore,only to be expected that with the
growing funds of the Devastbanams, such choultries will be constructed in a
modern way catering to the needs and requirements of the, pilgrims and visitors
of all classes in a self-contained unit or complex. It would be necessary to
look at the institution from the point of view of the predominant intention which
guides the building up of the complex as a. whole.
299 The object for which a choultry is built
is advanced and facilitated by making provisions for so many incidental
conveniences which the visitors and pilgrims coming from far and wide may need
in order to make their short stay in the neighbourhood of the temple
comfortable and convenient from all points of view so that they are not
required to go to and fro and face difficulties. The concept of a choultry
to-day may, therefore, be completely different from that with which one may be
familiar a hundred years ago. There must, however, be no idea of profit motive
in running or administering a choultry. Besides the expenditure for running a
choultry with amenities should not be made with an idea to realise it from the
visitors using the same. In other words, the choultry must in truth and reality
bear the hall mark of a charitable institution and should not partake of the
character of a hotel run for profit. The appellant concedes that the first
floor as well as the ground floor of the building which are used for lodging of
the pilgrims may be exempted from tax and indeed tax has not been realised in
respect of the rooms on the ground floor of the choultry.
The appellant, however, submits that the
offices, shops and other concerns some of which are located in the choultry and
others within the campus, cannot be considered as part and parcel of the
choultry and, therefore, are not exempt from tax. We have examined the entire
evidence in. this case and have given careful consideration to the findings of
the High Court with regard to the same and are clearly of opinion that the
choultry cannot be divorced from the other offices, shops and concerns which
are mainly located within its precincts in order to render much-needed and
other necessary services to the pilgrims coming to pay homage to the Holy
Shrine of Sri Venkateswara Swami. In the 'absence of a precise definition of
the word "choultry" in the Act excluding such offices, shops and
concerns in the precincts, we are unable to restrict the term
"choultry" in the context of the economic development and improved
standard of living of our people, to only that portion of the building which is
directly used for lodging of visitors and pilgrims. We arc, therefore, of the
view that the High Court is right in holding that the appellant is not entitled
to charge tax on the choultry as claimed.
Under section 81 of the Act, property tax is
leviable if the Municipal Council by resolution determines that it shall be levied
on buildings and lands within the municipal limits save and except those
exempted by or under the Act or any other law. Then section 83 provides for
general exemption under various heads and categories. There are exceptions
within exceptions in section 83 itself with a proviso and explanation with
which we are not directly concerned in this appeal. Some light is, however,
thrown by explanation to section 83 which it may be appropriate to quote
"Explanation-The exemption granted under this section shall not extended
to residential quarters attached to schools and colleges not being hostels or
to residential quarters attached to hospitals, dispensaries and
libraries".
Similarly there is a proviso in the section
with reference to clauses (a), (c) and (e) to the effect that nothing contained
in these clauses 300 shall be deemed to exempt from property tax any building
or land for which rent is payable by the person or persons using the same for
the purposes referred to in the said clauses". Nothing similar to this has
been superimposed upon the exemption allowed under the Act to choultries under
section 8 3 (1) (b) and the matter is kept unabridged even without attempting
to define the word and there is no carving out of any exception within the
exception as in the case of schools, hospitals, etc.
Even then a line will have to be drawn to
distinguish between what is incidental or subservient to the main object and
purpose of the choultry and the oblique motive of profit-making to deprive the
Municipality of its rightful dues.
It is well recognised that there is no equity
or morality about a tax and a taxing statute or provision has to be construed
strictly on its plain meaning where possible.
Similarly who so ever claims exemption from
tax under the law, has to establish his own case as falling within the
exemption clause. In case of any ambiguity the benefit will, however, go to the
tax payer.
Not being unmindful to the above principles,
we are unable to hold in this case that the New Choultry with its expending
beneficial complex, as established in the evidence, not viable by itself but
maintained in a substantially large measure out of the Devasthanam funds
predominantly in the interest of numerous visiting pilgrims from far and wide,
is not exempt from tax under section 83 (1) (b).
In the view we have taken about the choultry
in this case, we hold that there is no evidence to show that any rent as such
is charged for the occupation of the choultry and the minimal service charges
even for the rooms in the first floor cannot be treated as rent. There is only
evidence of realisation of rent of Rs. 30/- per month from the brass
cooperative store within the campus, but that is a very insignificant item when
we consider that everything else is found by the High Court to be rent-free.
The evidence has established that the entire income from whatever sources from
the choultry is not sufficient for the maintenance of the same. It is,
therefore, obvious that the entire income, including even the nominal rent charged
from the brass co- operative store, is used exclusively for the purpose of the
choultry which is indeed a charitable purpose. The case, therefore, falls
squarely under section 83 (1) (b) of the exemption clause.
The appellant relied upon a decision of the
Andhra Pradesh High Court in Kesarapalli Anjaneyulu and Another v. Eluru
Municipality, by its Executive Officer, The Commissioner and Another(1), where
the question arose as to whether a portion of choultry, which is used for
shops, can be brought within the purview of section 83 (1) (b) of this very
Act. The High Court held that the clause is attracted only to cases where rent
is charged in regard to a building used as a choultry i.e. where rent is
collected from persons who temporarily occupy (1) (1964) 1. L. R. Andhra
Pradesh (Part IV) 379.
301 tile rooms, such as pilgrims and
travellers, and it has no application to cases where the building is not used
as a choultry. It is not possible to find from the very short judgment in this
case as to the entire circumstances with regard to the connection of the shops
with the choultry.
The decision is, therefore, not of much
assistance to the appellant and We express no opinion on its correctness.
The next decision cited by the appellant is
in the case of Sri Kanyakaparameswari Anna Satram (supra). In this case ten
buildings that were involved in the suit were situated outside the choultry
building. It was alleged in the plaint that these ten buildings were rented and
the income realised therefrom was used and applied for maintaining the
choultry.
The High Court held that "the exemption
is only to choul- tries and if a building does not satisfy the definition of a
choultry, it is not entitled to the exemption. Any building or house property
acquireed by the plaintiff-committee cannot be called a choultry, and if the
plaintiff-committee should acquire a cinema-house and appropriate the income
therefrom for the charitable purpose", it cannot be said that the
cinema-house is a choultry. The High Court relied upon two decisions. If the
Madras High Court in Kodandaram Pillai v. The Municipal Council, Trichinopoly,
(1) and Pandarasannadhi, Tiruvannarnalai Adhinam v. The Corporation of
Madras(2). The facts of this case are entirely different from those of the
present case where shops, offices and other concerns are intended to provide
facilities and amenities to pilgrims and travellers staying in the choultry
without there being any motive of profit-making and are therefore part of the
choultry.
The appellant also relied upon Municipal
Council, Palni v. Sri Dhandayuthapani Devasthanam Palni(3), where the High
Court was dealing with the words "places set apart for public worship and
either actually so used or used for another purpose" under section 83(1)
(a) of the Act with which we are not concerned. The decision is, therefore, of
no assistance to the appellant. The appellant also relied upon Rajahmundry
Municipal Council v. Tripurari Malloya(4).
The High Court on the particular facts and
circumstances of the case held :
"If the property is a choultry when the
tax accrues due, then the tax cannot be levied. If it is not a choultry on that
date, being used for other purposes, then the tax is leviable even though in
the Past the property had been a choultry and might, become one again in the
future'.
This decision is also, therefore, of no
assistance to the appellant.
At any rate, we have looked at the matter
from an entirely different angle and have come to, the conclusion that section
83 (1) (b) is attracted in this case. The appeal is, therefore, dismissed and
the plaintiff's suit is decreed as held by the High Court. We will, however,
make no order as to costs in this appeal.
S.C.
Appeal dismissed.
(1) A. I. R. 1933 Madras 782 (1933) 65 M. L.
J. 678.
(2) A. I. R. 1941 Madras 908(1941) 2 M. L. J.
544.
(3) A. I. R. 1941 Madras 185. (4) A. I. R.
1938 Madras 923.
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