Property-tax exemption under Section 136(c) is unavailable where educational premises are rented.

The petitioner was running a school in residential premises taken on rent/lease from the owner.

The Indore Municipal Corporation issued demand notice No. 08/30 dated 05.12.2025, apparently treating the premises as taxable following a reclassification.

Whether premises used for running a school are exempt from property tax under Section 136(c) of the Madhya Pradesh Municipal Corporation Act, 1956, when the premises are taken on rent or lease and are not owned by the educational institution?

Whether the demand notice dated 05.12.2025 and the order dated 04.08.2026 were liable to be quashed on the ground of illegal reclassification, violation of natural justice, or statutory non-compliance?

Whether the petitioner was entitled to refund of the ₹1,00,000 deposited pursuant to the interim order dated 24.04.2026?

The Court applied Section 135 of the Madhya Pradesh Municipal Corporation Act, 1956, under which property tax is leviable, subject to statutory exemptions.

Section 136(c) exempts buildings and lands, or portions thereof, used exclusively for educational purposes, including schools, only where such premises are either owned by the concerned educational institution or placed at its disposal without payment of rent.

The Court also considered the petitioner’s reliance on earlier co-ordinate Bench decisions, including W.P. No. 1587 of 2016 dated 20.03.2018, but treated the express conditions in Section 136(c) as controlling.

The Court found it admitted that the premises were residential, were not owned by the petitioner, and had been taken on rent/lease.

Although the premises were being used for conducting a school, educational use alone was insufficient to attract Section 136(c). The statutory exemption additionally required ownership by the educational institution or placement of the premises at its disposal without payment of rent. Since the petitioner was a tenant/lessee and paid rent, the essential statutory condition was absent. Consequently, the premises remained liable to property tax under Section 135, and the challenge to the Corporation’s decision and demand could not succeed.

The writ petition was dismissed as devoid of merit. The prayers for quashing the order dated 04.08.2026 and demand notice dated 05.12.2025, restoration of the residential/educational classification, and refund of ₹1,00,000 were consequently not granted.