# Banaras Hindu University, Varanasi v. State of U.P. and another

- **Citation:** (2010) 3 ILRA 1032
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2010-09-23
- **Case number:** Civil Misc. Writ Petition No. 347 of 2004
- **Bench:** Yatindra Singh, Rajes Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/banaras-hindu-university-varanasi-v-state-of-u-p-and-another-41718
- **Pages:** 4

## Headnote

Constitution of India Art 285-Demand of
Service
tax-the
building
owned
by
B.H.U.,IITK
ICAR-although
exempted
from tax-demand of service tax by
respective Municipal Corporation-heldthe
petitioners
being
statutory
corporation and society even being
established by union are not within of
definition of union of India-No service
charge can be charged.
Held: Para 18

The OM only applies to the buildings of
the Union. It does not apply to the
staturory corporation or the societies that
have independent identity. No service
charge
can
be
realised
from
the
petitioners in pursuance of the OM. In
view of this the impugned recoveries
against the petitioners are illegal and are
liable to be quashed.

## Text

1032 INDIAN LAW REPORTS ALLAHABAD SERIES [2010
enforceable. The petitioner is required to
be considered along with other candidates
for selection under the statutory rules,
provided he is eligible to apply and any
permanent vacancy is available and is
advertised.

18. The Special Appeal is dismissed
with the aforesaid observations.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 23.09.2010

BEFORE
THE HON'BLE YATINDRA SINGH, J.
THE HON'BLE RAJES KUMAR, J.

Civil Misc. Writ Petition No. 347 of 2004

Banaras Hindu University, Varanasi

 ...Petitioner
Versus
State of UP and another ...Respondents

Counsel for the Petitioner:
Sri V.K.Upadhya
Sri V.K.Singh
Sri Hem Pratap Singh
Sri Yashwant Verma
Sri D.K.Singh
Ms.Pooja Goel

Counsel for the Respondents:
Sri C.K.Parekh
Sri Vivek Verma
Sri Chandan Sharma
C.S.C.

Constitution of India Art 285-Demand of
Service
tax-the
building
owned
by
B.H.U.,IITK
ICAR-although
exempted
from tax-demand of service tax by
respective Municipal Corporation-heldthe
petitioners
being
statutory
corporation and society even being
established by union are not within of
definition of union of India-No service
charge can be charged.
Held: Para 18

The OM only applies to the buildings of
the Union. It does not apply to the
staturory corporation or the societies that
have independent identity. No service
charge
can
be
realised
from
the
petitioners in pursuance of the OM. In
view of this the impugned recoveries
against the petitioners are illegal and are
liable to be quashed.

(Delivered by Hon'ble Yatindra Singh, J.)

1. The main question involved in
these writ petitions relates to the power
of the Municipal Corporation to levy
service charge in pursuance of the office
memo of the Central Government dated
26.4.1994 (the OM).

THE FACTS

2. Article 285 of the constitution
exempts the property of the Union from
the State taxation. The OM was issued
that stating that, though the buildings of
the Union are exempted from the
municipal taxes but they are liable to pay
service taxes as contemplated therein.

First Writ Petition

3. The Banaras Hindu University,
Varanasi (the BHU) is a Central
University
established
by
Central
Government under the Banaras Hindu
University Act (Act No. 16 of 1915). It is
a statutory corporation established under
the Central Act.

4. The Municipal Corporation,
Banaras issued 10 notices dated 39.2.2004 (Annexures-11, 12 and 13 to
the writ petition) under the Municipal
Corporation Act (the Act) informing the
3 All] Banaras Hindu University, Varanasi V. State of U.P. and another
1033
BHU regarding the assessment of their
buildings and asking them to show cause
why service charges as contemplated in
the OM be not taken from them. Hence
the present writ petition by the BHU.

Second Writ Petition

5.

The
Indian
Institute
of
Technology, Kanpur (IIT-K) is an
engineering institute. Initially it was a
society.
Subsequently,
it
was
incorporated by the Central Government
under the Indian Institute of Technology
Act (Act No. 59 of 1961). IIT-K is also a
statutory body incorporated under the
Central Act.

6. The Municipal Corporation,
Kanpur issued notice in the year 2003
requiring the IIT-K to make available the
details of its building so that the
proceedings for assessment under the Act
may be undertaken.

7. Subsequently, an order was
passed on 21.7.2006 assessing the house
assessment
and
thereafter
charging
service charge according to the OM.
Hence the second writ petition by the
IIT-K.

Third Writ Petition

8. In 1926, a royal commission for
agricultural recommended setting up an
establishment for agricultural research.
In pursuance of the same Imperial
Council for Agricultural Research was
established as a society registered under
the Societies Registration Act. After
independent, it was renamed as Indian
Council
of
Agricultural
Research
(ICAR).
Indian
Institute
of
Pulses
Research, Kanpur (IIPR) is a branch of
the ICAR. The buildings etc. belong to
the ICAR.

9. The IIPR received a notice from
the Municipal Corporation, Kanpur dated
3.11.2009 regarding payment of general
house tax. The petitioner filed its reply
on 16.11.2006. Thereafter, the accounts
of the IIPR were attached on 29.3.2007
for payment of the general house tax
dues. Hence, the third writ petition.

10. The third writ petition was filed
by IIPR and not ICAR as the notices etc.
were in the name of IIPR otherwise, it is
for the benefit of ICAR.

11. In the counter affidavit in the
third writ petition, it is stated that the
accounts were attached not because of
recovery any general house tax but for
the recovery of service charge in
pursuance of the OM.

Service Charge Under the OM--Being
Demanded

12. In all the writ petitions, the
amount that is being demanded is the
service charge in pursuance of the OM
and not any other tax or fee. The
question is, does the OM apply to them.

POINTS FOR DETERMINATION

13. We have heard Sri VK Singh,
Sri Hem Pratap Singh, Sri Yashwant
Varma, Sri DK Singh, Ms. Pooja Goel,
counsel for the petitioners; and Sri Vivek
Verma,
Sri
Chandan
Sharma
and
standing counsel for the respondents.

14. The following points arise for
determination.
1034 INDIAN LAW REPORTS ALLAHABAD SERIES [2010

(i) Whether the OM is applicable to
buildings of the petitioners;

(ii) Whether a tax or a fees can be
charged by an office memo;

(iii) Whether the petitioners who are
imparting education (in the first and the
second writ petitions) and is a research
institute (the petitioner in the third writ
petition) are charitable institutions and
cannot be assessed in view of section 177
(b) of the Act.

1st Point: Not Applicable

15. The BHU as well as IIT-K are
statutory bodies incorporated under the
Central Government Act. They have
right to sue and can be sued in their own
name.

16. The IIPR is the branch of ICAR
that is a registered society under the
Societies Registration Act. It can also
sue and be sued in its own name.

17. A statutory corporation, or a
society or a company, even if it is State
within the meaning of Article 12 of the
Constitution or an instrumentality of the
Union, are not synonymous with it. They
have different identity and cannot be
treated to be Union (see below)1.

18. The OM only applies to the
buildings of the Union. It does not apply
to the staturory corporation or the
societies that have independent identity.
No service charge can be realised from
the petitioners in pursuance of the OM.
In view of this the impugned recoveries
against the petitioners are illegal and are
liable to be quashed.

2nd & 3rd POINT: NOT NECESSARY
TO DECIDE

19. The counsel for the petitioner cited
the following rulings in support of second
and third point:

(i)Second point,

•
Municipal Corporation, Amristar
Vs. Senior Superintendent of Post
Office; AIR 2004 SC 2912;

(ii)Third point,

•
PC Raja Ratnam Institution Vs
Municipal Corporation of Delhi;
AIR 1990 SC 816;

•
Municipal Corporation of Delhi Vs.
Children book trust; AIR 1992 SC
1456;

•
Christian Children fund INC Vs
Municipal Corporation Delhi;

•
Jindal Stainless Ltd. Vs State of
Haryana; 2006 (7) SCC 241 Para
39-45;

•
TMA Pai Vs. State of Karnakata

And submitted that these points should
be decided in their favour.

20. We are allowing the writ petition
on the first point. It is not necessary to
express any opinion on the second and the
third point.

CONCLUSIONS

21. Our conclusions are as follows:
3 All] Manoj Kumar Nagar and others V. The State of U.P. and others
1035

(i) The statutory corporation as well as
the societies are not Union even if they are
established by the Union Government. They
are not covered by the office memo dated
26.4.1994
issued
by
the
Central
Government;

(ii) The recovery of service charges in
pursuance of office memo dated 26.4.1994
is illegal and are quashed. However, it will
be open for the respondents to assess and
charge such tax or fee as permissible under
the law after giving reasonable opportunity
to the petitioners.

With these observations, the writ
petitions are allowed.
---------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 16.09.2010

BEFORE
THE HON'BLE SUNIL AMBWANI, J.
THE HON'BLE KASHI NATH PANDEY, J.

Special Appeal No. 828 of 2008

Manoj Kumar Nagar and others

...Petitioner
Versus
The State of U.P. and others

 ...Respondent

Counsel forthe Petitioner
Sri Pradeep Pandey
Sri Kamlesh Shukla

Counsel for the Respondent
Sri S.D.Sahai
C.S.C.

Constitution of India Art. 226-Grant inaid by G.O. Dated 7.9.2006 about 1000
institutions running Junior High Schoolrequired to be taken in grant in aid-the
application of the petitioner institutionrejection on ground of arrival after one
day and the institution in question upgraded to High School-held-not properas per law developed by Apex Court-up
gradation of institution shall not come in
consideration of grant in aid-to the
Junior High School Section-Single Judge
failed to consider this aspect-judgment
set-a-side-direction
issued
to
the
authorities to consider as fresh within
specified period.

Held: Para 7

Both the grounds cannot be sustained
inasmuch as the application was sent by
registered post, before the date fixed for
receiving the applications. The State
Government was as such not justified in
refusing
to
accept
the
application.
Further we find that inspite of the
objections of late arrival, the application
was
actually
considered
and
the
institution was not found qualified to
receive the ground on the ground that it
was upgraded to Junior High School. In
the Supreme Court judgment cited as
above, it has now been held that
upgradation of the institution as High
School cannot be a ground to refuse the
grant-in-aid
to
Junior
High
School
section.
Case law discussed:
2008 (2) ESC 1497 (All) (DB), Special Leave
Petition (C) No. 4630 of 2008

(Delivered by Hon'ble Sunil Ambwani, J.)

1. Heard Shri Kamlesh Shukla and
Shri Pradeep Pandey for the petitioners
appellants.

2. Shri Manoj Kumar Nagar,
Principal and 16 Assistant Teachers of
'Nain Singh Junior High School, Shivali,
District Bulandshahr are aggrieved by the
judgment of learned Single Judge dated
23.1.2008 in Civil Misc. Writ Petition No.
1317 of 2007 Manoj Kumar Nagar and
others vs. State of UP and others, by
which their writ petition for grant-in-aid