SHRI MAHANTESH EDUCATION SOCIETY vs THE STATE OF KARNATAKA

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IN THE HIGH COURT OF KARNATAKA AT DHARWAD


TH
DATED THIS THE 9 DAY OF OCTOBER, 2026


BEFORE

THE HON'BLE MR. JUSTICE T.M.NADAF
WRIT PETITION NO.108508 OF 2026 (LB-TAX)

BETWEEN:

SHRI MAHANTESH EDUCATION SOCIETY,
SOPPADLA, TQ. SAVADATI, DIST. BELAGAVI-591126,
REP. BY ITS SECRETARY,
SRI SHRISHAIL S/O. APPAYAPPA KOTRASHETTI,
AGE. 62 YEARS.
…PETITIONER
(BY SRI. K.S. PATIL, ADVOCATE)

AND:

1. THE STATE OF KARNATAKA,
REP/BY ITS PRINCIPAL SECRETARY,
DEPARTMENT OF RURAL DEVELOPMENT
AND PANCHAYAT RAJ, M.S. BUILDING,
DR. AMBEDKAR ROAD, BENGALURU-560001.

2. THE PANCHAYAT DEVELOPMENT OFFICER,
GRAM PANCHAYAT OFFICE, SOPPADLA,
TQ. SAVADATTI, DIST. BELAGAVI-591126.
…RESPONDENTS
(BY SRI. SHARAD V.MAGADUM, AGA FOR R1;
SRI. BHUSHAN KULKARNI, ADVOCATE FOR R2)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA, PRAYING TO A. ISSUE WRIT IN
THE NATURE OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT,
ORDER OR DIRECTION, QUASHING DEMAND NOTICE DATED
23.02.2026, PROPERTY ID NO.150401003200301125, ISSUED BY
RESPONDENT NO.2, VIDE ANNEXURE D IN THE INTEREST OF
JUSTICE AND EQUITY; B. ISSUE A WRIT OF MANDAMUS OR ANY
OTHER APPROPRIATE WRIT, ORDER OR DIRECTION, DECLARING
THAT THE PETITIONER IS EXEMPTED FROM PAYMENT OF PROPERTY
TAX UNDER RULE 6(C) OF THE KARNATAKA GRAM SWARAJ AND
PANCHAYAT RAJ (GRAM PANCHAYAT TAXES AND FEES) RULES,
1994; AND C. GRANT SUCH OTHER RELIEFS AS DEEMED FIT IN THE
CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE
AND EQUITY.












Digitally signed by
THEJAS KUMAR N
Location: High
Court of Karnataka,
Dharwad Bench

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING,
THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE T.M.NADAF

ORAL ORDER
With consent of both the parties, this petition is taken
up for final disposal, though it is listed in the caption of ‘fresh
matters’.
2. This petition is filed seeking following reliefs:
“a. Issue Writ in the nature of certiorari or any other
appropriate Writ, Order or direction, quashing
Demand Notice dated 23.02.2026, Property ID
No.150401003200301125, issued by Respondent
No.2, vide Annexure D in the interest of justice and
equity;

b. Issue a writ of mandamus or any other appropriate
writ, order or direction, declaring that the Petitioner
is exempted from payment of property tax under
Rule 6(c) of the Karnataka Gram Swaraj and
Panchayat Raj (Gram Panchayat Taxes and Fees)
Rules, 1994; and

c. Grant such other reliefs as deemed fit in the
circumstances of the case and in the interest of
justice and equity.”

3. Heard, Sri K.S.Patil, learned counsel appearing for
the petitioner and Sri Sharad V. Magadum, learned AGA is
for respondent No.1/State and Sri Bhushan Kulkarni, learned
counsel for respondent No.2.

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4. The lis involved in this matter is no more res integra ,
in view of authoritative pronouncement by the coordinate
bench of this Court in W.P.No.16323 of 2021 (LB-RES) with
connected matters, disposed of on 23.12.2021. The order
passed by the co-ordinate Bench of this Court in the
aforesaid writ petition reads as under:
“Petitioners, in the conglomeration of these cases,
are all Educational Institutions calling in question
imposition of property tax by the respective Panchayats
under whose precincts the Institutions exist. The
petitioners are different Trusts claiming to be charitable
and running Educational Institutions. Since the issue is
with regard to imposition of property tax the
establishments of the Institutions in these cases are not
gone into.

2. For facts, Writ Petition No.19423 of 2021 is
taken as base petition, for the purpose of convenience.
The 1st petitioner in this petition - A.H.Memorial
Educational Trust is running Presidency University coming
within the precincts of the 2nd respondent
Singanayakanahalli Gram Panchayat. It is the claim of the
petitioners that the Institution is established in a rural
area with the intention of eradicating illiteracy in rural
areas of the State and also claims to be providing
education at concessional fee to hundreds of children
studying in all the Educational Institutions run by the 1st
petitioner/Trust. This is the identical claim in all the
petitions which are Trusts running Educational
Institutions.
nd
3. The 2 respondent/Panchayat in this writ
petition issued a demand notice on 29-09-2021
demanding property tax from the hands of the petitioner
in a sum of Rs.56,89,180/- on the strength of circular
dated 19-11-2016 issued by Government directing
demand of such tax which is claimed in furtherance of
Section 199 of the Karnataka Gram Swaraj and Panchayat
Raj Act, 1993 (‘the Act’ for short). Identical demand

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notices are issued by the respective Gram Panchayats
under whose precincts the Institutions or the trusts exist,
all again on the strength of the aforesaid circular issued
by Government. It is this circular and the demand notices
that are called in question by the petitioners in the cluster
of these petitions.

4. Heard the learned Senior Counsel Sri
S.Basavaraj for Sri A.R.Goutham, learned counsel for the
petitioners, Smt Prathima Honnapura, learned Additional
Government Advocate for respondent No.1/State, Sri
M.S.Devaraju and Sri T.P.Srinivasa, learned counsel
appearing for respective Panchayats who have issued
such demand notices.

5. The learned Senior Counsel Sri S.Basavaraj
would vehemently argue and contend that under Section
199 of the Act, the Karnataka Panchayat Raj (Grama
Panchayat Taxes and Fees) Rules, 1994 (‘the Rules’ for
short) have been framed by Government. The Rules
exempt lands which are being used solely for charitable or
religious purposes and the property tax now levied
against the petitioners are without application of mind, as
there is no determination with regard to the fact that the
petitioners either running the Institutions or not using
their lands solely for charitable or public religious
purposes as the exemption was always available to the
petitioners under the Karnataka Municipal Corporations
Act, 1976 as well. He would contend that the demand as
made on the strength of a circular which has no legal legs
to stand would run counter to the Act and the Rules.

6. The learned Additional Government Advocate
would vehemently refute the submissions of the learned
Senior Counsel and submit that the circular is in
furtherance of the Rules and is not contrary to the Rules.
The circular cannot be held to be ultra vires the Act or the
Rules, as it does not in any way direct anything contrary
to the Rules and would further submit that the demand is
made by the Panchayats and it is for the Panchayats to
determine the property tax and raise a demand, if they
have not done so.

7. The Panchayat in W.P.No.16323 of 2021 has
also filed its statement of objections in W.P.No.16323 of

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2021 and other Panchayats in other petitions would seek
to adopt same objections in their cases also. The claim of
the learned counsel appearing for the respective
Panchayats is that the petitioners are not running any
charitable Institutions as they are charging fees close to
Rs.5/- lakhs to Rs.10/- lakhs per student, which cannot
be termed to be a charity. Charging such huge fees
cannot in any way mean charity to claim exemption under
the Rules. Therefore, no fault can be found with the
demand of property tax made by the
respondents/Panchayats is what is contended.

8. I have given my anxious consideration to the
submissions made by the learned Senior Counsel and
other respective learned counsel and have perused the
material on record.

9. The facts, afore-narrated not being in dispute,
are not reiterated. The question to be decided is, whether
the petitioners /Trusts which run Educational Institutions
can be assessed to property tax?

10. Section 199 of the Act reads as follows:

“199. Levy of taxes, rates, etc., by Grama
Panchayats.- (1) Every Grama Panchayat shall in
such manner and subject to such exemptions as
may be prescribed and not exceeding the
maximum rate specified in Schedule IV levy tax
upon buildings and lands based on capital value of
the property which are not subject to agricultural
assessment, within the limits of the panchayat
area:

Provided that where an owner of the building
or land has left the Panchayat area or cannot
otherwise be found, the occupier of such building
or land shall be liable for the tax leviable on such
owner.

(2) A Grama Panchayat may levy water rate
for supply of water for drinking and other purposes.

(3) A Grama Panchayat may also levy all or
any of the following taxes and fee at such rates as

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the Grama panchayat may by bye-laws determine
but not exceeding the maximum specified in
Schedule IV and in such manner and subject to
such exemptions as may be prescribed, namely:-

(a) tax on entertainment other than
cinematograph shows;

(b) tax on vehicles, other than motor
vehicles;

(c) deleted

(d) pilgrim fee on person attending the
jatras, festivals, etc., where necessary
arrangements for water supply, health
and sanitation are made by the Grama
Panchayats;

(e) market fee on persons who expose their
goods for sale in any market place;

(f) fee on the registration of cattle brought
for sale in any market place;

(g) fee on buses and taxies and auto-stands
provided adequate facilities for the
travellers by the Grama panchayat; and

(h) fee on grazing cattle in the grazing lands.

(i) tax and fee shall be as specified in
schedule IV.

(j) such other fees as may be prescribed.”

Section 199 of the Act controls levy of tax and rate of tax
by the Gram Panchayat. Sub-section (1) of Section 199
depicts the manner in which the tax could be levied
subject to exceptions. The State Government in exercise
of powers conferred under Sections 199, 200 and 201 has
framed the Rules. Rule 3 reads as follows:

"3. Procedure for levying taxes on Buildings and
Lands.-(1) Every Grama Panchayat shall, before

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levying the taxes on buildings and lands under
subsection (1) of the Section 199.-

(a) Pass a resolution to levy the taxes;

(b) Publish a notice of such resolution by affixing
copies thereof on the notice board of the
office of the Gram Panchayat and at other
conspicuous places in the Panchayat area,
specifying therein the rate of tax and the date
not earlier than thirty days from the date of
such publication with effect from which the
said taxes shall be levied and also announce
by beat of drum in the Panchayat area the
fact of such publication.

(2) The taxes under sub-rule (1) shall be levied for
any year or part thereof and shall be paid for every
quarter commencing from the 1st day of April, 1st
day of July, 1st day of October and 1st day of
January of the year."

Chapter II of the said Rules depicts procedure for levy of
tax on building or land. Sub-rule (1) of Rule 3 of the
Rules directs that every Gram Panchayat shall, before
levying tax on buildings, pass a resolution of such levy of
tax, publish a notice of such resolution by affixing notice
thereof on the notice board of the Gram Panchayat. Rule
6 deals with exemption from payment of property tax.
Rule 6 reads as follows:

“6. Exemption. – The following buildings and lands
shall be exempted from the levy of tax under
subSection (1) of Section 199 namely. –

(a) Buildings and lands belonging to the Zilla
Panchayats, Taluk Panchats and Gram
Panchayats.

(b) Buildings and lands belonging to Central
Government or any State Government and
used for the purposes of such Government
and not used for intended to be used for
residential or commercial purposes.

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(c) Building and lands, used solely for charitable
or public religious purposes and not let out
for rent; and

(d) Lands measuring less than one hundred
square meter and buildings having an annual
letting value of less than rupees twenty-fife.”

The Rules exempt buildings and lands used only for
charitable or public religious purposes and not let out for
rent. Therefore, the tax will have to be demanded in
terms of the Rules.

11. Identical Rules under the Karnataka Municipalities
Act, 1964 had fallen for consideration, way back in the
year 1985 before a Co-ordinate Bench of this Court in
TOWN MUNICIPAL COUNCIL v. VIJAYA COLLEGE1 wherein
this Court posed to itself the following question:

“Whether the Town Municipal Council can levy tax
on the buildings of Respondent-1, which is an
educational institution?

The question that was posed was whether the Town
Municipal Council therein could levy tax on the building of
an Educational Institution. Answering the said question,
the Co-ordinate Bench holds as follows:

“6. It was held by this Court that the object of
Section 101 of the Corporation Act (Act No. 69 of
1949) was to grant exemption from payment of
property tax on certain buildings and lands and
Sub-Clauses (e-1) and (e2) were added by
amendment Act 3 of 1969. The said Sub-clauses are
reproduced here in:

“(e-1) buildings or lands exclusively used for
student hostel which are not established or
conducted for profit;

(e-2) buildings or lands exclusively used for
educational purposes by educational institutions
receiving grant-in-aid from the Government;”

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Therefore, the discrimination made under the
impugned provision, while granting exemption from
payment of tax between grant-in-aid institutions
and other private educational institutions, was held
to be violative of Article 14 of the Constitution.

Though no such provision is incorporated in
the Town Municipality Act, it is contended oil behalf
of the respondent that the legal position cannot be
different and the levy of tax on its buildings by the
Mulki Municipality should be struck down for the
same reasons.

7. That education is a charitable purpose, is
well settled by the several decisions of the Supreme
Court starting from the case of Sidraj Bhai v. State
of West Bengal [AIR 1963 SC 540.]. The Supreme
Court observed while interpreting Article 26 of the
Constitution, in a larger sense an educational
institution may be regarded as charitable. The Court
was interpreting Article 26 vis-avis the right to
interfere by a Government in the management of a
private educational institution. Under Article 26,
freedom to establish and maintain institutions for
religious and charitable purposes is conferred on
every religious denomination or any section thereof,
while dealing with the scope of Article 26, the
Supreme Court held, that imparting education may
be regarded as charitable.

8. The next decision relied upon by Sri
Shivashankar Bhat is the one reported in The Sole
Trustee Lokashikshana Trust v. The Commissioner
of Income Tax, Mysore [(1976) 1 SCC 254 : AIR
1976 SC 10.].

9. The Supreme Court was dealing with the
interpretation of ‘education’ occurring in Section
2(15) of the Income-Tax Act, 1961. Under that
definition, ‘charitable purpose’ includes, relief to the
poor, education, medical relief and the
advancement of any other general public utility not
involving the carrying of any activity.

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10. Their Lordships held, that the term,
‘education’ as used in Section 2(15) of the Act has a
wider and more comprehensive meaning than
education through educational institutions, such as,
universities, whose income is exempted from
income tax, under Section 10 of the Act. The
question that arose in that case was: whether the
appellant-trust was entitled to exemption? The sole
Trustee, the appellant' before the Supreme Court,
had claimed that the publication of a newspaper
cannot be treated as solely an activity for profit, but
the publication of news and the dissemination of the
information should be construde as predominantly
for educational purpose in its ordinary and usual
sense.

11. While rejecting the contention of the
appellants the Supreme Court held, that there is an
element of charity in the first three purposes
referred in Section 2(15) of the Act, but to qualify
for the exemption under the last and the widest
category of objects of public utility, inquiry is
necessary to find out the nature of activities
considered and whether they are truly charitable in
nature.

On the facts of that case the Court held, that
the Trust was not entitled to seek shelter under the
definition of charitable purpose in Section 2(15).

The next decision of the Supreme Court
referred by Sri Shivashankar Bhat is:

Additional Commissioner of Income-tax,
Gujarath v. Surat Arts Silk Manufacturers'
Association, Surat [(1980) 2 SCC 31 : AIR 1980 SC
387 : 101 ITR 796.]

The Supreme Court was interpreting the last
category of charitable purpose, viz., the
advancement of any other object of general public
utility not involving the carrying of any activity for
profit.

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12. Though, we are not directly concerned in
this case about the interpretation of Section 2(15)
of the Income-Tax Act, the enunciation of the
Supreme Court while approving the decision of this
Court in The Commissioner of Income-tax v. The
Sole Trustee Lokashikshana Trust, Hubli [AIR 1970
Mysore 285.] is only relevant for our purpose. It
was laid down by this Court by Justice Sri Govinda
Bhat (as he then was) that the first three heads of
charitable purposes, viz., relief of the poor,
education and medical relief, the Court will assume
it to be for the benefit of the Community and
charitable unless the contrary is shown.

13. Therefore, the important aspect with
which we are concerned in this case is:

Whether the buildings which are exclusively
used by the Respondent-institution for education
could be subjected to building tax under Section 94
of the Town Municipalities Act?

14. In the light of the above discussion and
the enunciation of law, which is well settled, the
levy of property tax by the Town Municipal Council,
Mulki, on the buildings belonging to the
Respondent-institution should be struck down. It is
ordered accordingly and the Writ Petition is
dismissed.”
(Emphasis supplied)

The issue that is answered by the Court was after
considering the building being used predominantly for
educational purpose would be exempted from the levy of
tax under Section 94 of the Karnataka Municipalities Act.
12. Yet again, this Court in the case of THE
SAPTHAGIRI EDUCATIONAL AND CHARITABLE TRUST v.
2
THE SAMANDUR GRAMA PRANCHAYAT AND ANOTHER
interpreting exemption under Rule 6(c) of the Rules has
held as follows:

“5. Indisputably, Sec. 199 of the Act controls
the levy of taxes, rate etc., by Grama Panchayats.
sub.Sec. (1) states that the manner and subject to
such exemptions, as may be prescribed, the Grama

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Panchayat could levy taxes not exceeding the
maximum rate specified in Schedule IV, upon
buildings and lands not subject to agricultural
assessment within the limits of the Panchayat area.
Schedule IV to the Act at Sl.No. 1 states that tax
on building shall be at the maximum rate of 10% of
the annual value (per annum) and the explanation
states that the word ‘annual letting value’ means
the annual rent for which any building or land,
exclusive of furniture or machinery contained or
situated therein or thereon, might reasonably be
expected to be let from year to year.

6. The State Govt. in exercise of the power
conferred under Sees. 199, 200 and 201 framed
‘Taxation Rules’ which came into force in the year
1995. Rule 3 under Chapter II provides for
procedure to levy tax on building and land. Sub-
rule (1) states that every Grama Panchayat shall,
before levying taxes on buildings and lands under
sub-Sec. (1) of the Section 199, pass a resolution
to levy the taxes; publish a notice of such
resolution by affixing copies thereof on the notice
board of the office of the Grama Panchayat and at
other conspicuous places in the panchayat area,
specifying therein, the rate of tax and the date not
earlier than thirty days from the date of such
publication, with effect from which, the said taxes
shall be levied and also announce by beat of drum
in the Panchayat area the fact of such publication.
sub. Rule (2) provides that the taxes under sub.
Rule (1) shall be levied for any year or part thereof
and shall be paid for every quarter commencing
from the 1st day of April, 1st day of July, 1st day of
October, and 1st day of January of the year. Rule 5
provides for rate of tax to be levied on the building
at 10% of the annual letting value of such building,
per annum; while Rule 6 provides for exemptions.
sub. Rule (c) of Rule 6 provides exemption for
buildings and lands used solely for charitable or
public religious purposes and not let out for rent,
under sub.Sec. (1) of Sec.199. Rule 7 states that
the Secretary of the Grama Panchayat shall, as
soon as may be after the publication of the notice
of resolution under Rule 3 but not later than the

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1st day of December, next following, prepare an
assessment list relating to the buildings and lands
in the Panchayat area showing the—

(a) serial number of each house or land;
(b) name of the owner and occupier, if any;
(c) annual letting value of the buildings; and
(d) amount of tax assessed thereon.

7. Rule 8 extends an opportunity for filing
objections to the assessment list, when completed
and notice published by affixing it on the notice
board of the office of the Grama Panchayat, and
also by beat of drum in the Panchayat area, stating
that list is open for inspection at the office of the
Grama panchayat and that objections will be
considered and decided by the Grama Panchayat
on a date which shall not be earlier than 30 days
from the date of publication of the aforesaid notice.
Rule 9 provides for inspection of assessment list
whereby every person whose name appears in the
assessment list, every person claiming to be the
owner or occupier of any building or land, and the
agent of any such persons shall be at liberty to
inspect the list and to make extracts therefrom
without any charge. Rule 10(1) states that all
objections to the assessment shall be considered
and decided by the Grama Panchayat on the date
specified in the notice published under Rule 8 or
any later date and the decision of the Grama
Panchayat shall be communicated to the person
objecting to the assessment

8. In the facts of this case, the specific
allegation of the petitioner that the levy and
demand of tax over the building belonging to it, by
the 1st respondent-Panchayat, did not comply with
the ‘Taxation Rules’, is well founded. This Court on
22.4.2009, directed the Grama Panchayat to place
on record the documents relating to the compliance
of Rules 3 to 10 of the ‘Taxation Rules’ in so far as
it relates to the immoveable property belonging to
st
the petitioner. Learned Counsel for the 1
respondent submits that despite reminders to his
client, the records are not made available. The

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notices Annexures-A, C&D, much less the
st
statement of objections of the 1 respondent to the
writ petition do not disclose compliance of the
st
aforesaid rules. Suffice it to state that the 1
contention of the Learned Counsel for the
petitioner, deserves acceptance that the levy and
demand of building tax pursuant to notice
Annexure A and followed by notices Annexures —
C&D, deserves acceptance, as they stultify the
statute and hence illegal, arbitrary and not
‘Taxation Rules’ complaint.

9. Though, it is strenuously urged that the
petitioner has put to use the building and land for a
charitable purpose and not let out for rent, being a
pure question of fact, must be established before
the Grama Panchyath and not for a decision by this
Court in exercise of writ jurisdiction under Art.226
of the Constitution of India. It is for the petitioner
to lay relevant material as available in law, to
establish that the building in question is put to
charitable use, so as to fall under Rule 6(c) of the
‘Taxation Rules’, for exemption from levy of tax for
the said building. If the petitioner places such
material before the 1st respondent-Grama
Panchayat, with an appropriate representation,
seeking exemption from payment of building tax,
within one month from today, there is no reason to
believe that the Grama Panchayat would not
consider the petitioner's request.

10. An examination of the order dated
29.3.2007 Annexure-B of the Executive Officer,
Zilla Panchayath does not animate consideration of
compliance of rule of law and hence, the reasons,
findings and conclusions arrived at are illegal and
arbitrary.

In the result, this petition is allowed in part.
The impugned demand notices Annexures-A, C and
D and the order Annexure-B of the Appellate
Authority are quashed. It is needless to state that it
is open for the Grama Panchayat to comply with
the provision of the ‘Taxation Rules’ to impose and
collect from the petitioner the tax over the building

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in question, if the petitioner's building is not
entitled to an exemption, under Rule 6(c) of the
‘Taxation Rules’.

The petitioner, is directed to deposit Rs.
1,50,000/- within one month from today, with the
1st respondentGrama Panchayat, to be adjusted as
against tax dues, if any, for the period from 2003
st
to 2009. It is made clear that if the 1 respondent
exempts the building and land, belonging to the
petitioner from levy of tax, the said sum shall be
refunded to the petitioner.”
(Emphasis supplied)

The Co-ordinate Bench of this Court interprets exemption
under Rule 6(c) of the Rules and holds that if the
Educational Institution would supply such material before
the Gram Panchayat with an appropriate representation
seeking exemption from payment of building tax, the
same should be considered. This direction was arrived at
on the basis of the reason that the notices issued did not
disclose compliance with the Rules and holds that the
notices being contrary to the Rules would be arbitrary.

13. Therefore, both the issues with regard to whether the
Educational Institutions could be imposed with property
tax are dealt with in the case of VIJAYA COLLEGE and the
exemption under Rule 6(c) and its purport is dealt with by
the Co-ordinate Bench in the case of THE SAPTHAGIRI
EDUCATIONAL AND CHARITABLE TRUST (supra).

14. In the light of the Act, Rules and the judgments
rendered by this Court noticed (supra), the demand of
property tax by the respective Panchayats is admittedly
on the basis of a circular. The Circular though refers to
Section 199 of the Act and the Rules direct that all
buildings will have to be imposed property tax excluding
Government buildings and Government run Educational
Institutions and all other buildings will have to be brought
under the ambit of tax, the exemption that is available
under the Rules is not even considered in the said
circular. Therefore, the State Government will have to
suitably amend the circular to bring it in tune with the
exemption clause under Rule 6, explicitly depicting as to
the components of imposition of tax, failing which,

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imposition of tax can never be on any inference. If there
is no provision for tax, there can be no tax.

15. If the Rules exempt payment of tax on a particular
category, the circular cannot impose tax on such
category. The circular which runs counter to the Rules,
without determination to be made under the Rules, is
rendered unsustainable only insofar as such
determination is concerned. The circular need not in its
entirety be ultra vires as is sought by the petitioners, as
determination of tax and its exemption is under the Act
and the Rules. Since demand notices impugned in these
cases are not preceded by the procedure stipulated under
the Rules and do not bear consideration of exemptions to
charitable institutions under the Rules, they are rendered
unsustainable. Rendering of the demand notices, as
unsustainable would not absolve the
petitioners/Institutions from payment of property tax, if
they are amenable to payment of such tax under the
taxation laws, but that shall be only after consideration
and determination of exemption of tax in terms of Rule
6(c) of the Rules. Those determinations will have to be
made by the Gram Panchayats prior to issuance of
demand notices.

16. Therefore, the petitioners, in all these cases, shall
place such material before the respective Gram
Panchayat, in justification of claim of exemption under
Rule 6(c) of the Rules and the Gram Panchayats shall
consider the same, determine that the Institutions,
notwithstanding the exemptions, are amenable to
payment of tax and then demand such tax.

17. For the aforesaid reasons, I pass the following:

O R D E R

(i) The Writ Petitions are allowed.

(ii) The impugned circular dated 19.11.2016 is held
to be unenforceable only with regard to absence
of method of assessment under Rule 6(c)
(supra). The State is at liberty to bring it in tune
with the Rules.

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(iii) The impugned demand notices in all these cases
stand quashed and the matters are remitted
back to respective Panchayats for re-
determination of payment of property tax on
receipt of justification of claim for exemption
under Rule 6(c) of the respective Educational
Institutions, consider the same on the basis of
the Rules and then pass appropriate orders, in
accordance with law.

(iv) The Educational Institutions are directed to
submit their justification in terms of Rule 6(c) of
the Rules to claim exemption from property tax
within four weeks from the date of receipt of a
copy of this order and the respective
Panchayats shall consider the same, pass
appropriate orders justifying such demand and
then issue such demand notices within eight
weeks thereafter.

(v) Till such time no precipitate action shall be
taken against the petitioners/Educational
Institutions with regard to issue of payment of
property tax.”

5. The order passed by the co-ordinate bench in the
aforesaid writ petition is followed in W.P.No.103808 of 2017
(LB-RES), disposed of on 18.06.2024 by a co-ordinate bench
of this Court. Since the lis involved in this writ petition is also
identical, in view of principles laid down by the co-ordinate
bench of this Court stated supra , which is followed by
another co-ordinate bench in the writ petition stated afore,
this Court proceeds to pass the following:

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ORDER

(i) Writ petition is allowed.

(ii) The impugned demand notice at
Annexure-D dated 23.02.2026 is quashed.

(iii) The respondents are directed to consider
the case of the petitioner for exempting
their institution from payment of Property
Tax under Rule 6C of the Karnataka
Panchayat Raj (Grama Panchayat Taxes
and Fees) Rules, 1994.

(iv) The petitioner shall place all materials
before respondent No.2/Grama Panchayat
while seeking the exemption stated supra
within a period of 4 weeks from today
along with representation and copy of this
order.

(v) On receipt of such representation along
with copy of this order with the
documents in support of the exemption

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claimed, the respondent No.2 shall
consider the case of the petitioner strictly
adhering to the law laid down by the
Coordinate Bench of this Court in
W.P.No.16323 of 2021 (LB-RES) and
connected matters in terms of Rule 6C of
Rules, 1994, within a period of 4 weeks
thereafter.


Sd/-
(T.M.NADAF)
JUDGE
CKK
List No.: 1 Sl No.: 30