APHC010282302014 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI WRIT PETITION NO: 29450 of 2014 AND WRIT PETITION No:29484 of 2014 Bench Sr.No:-71 [3584] Jawahar Bharathi Degree College, Nellore Dist. ...Petitioner Vs. commr kavali mun kavali ...Respondent ********** Advocate for Petitioner: V R MACHAVARAM Advocate for Respondent: Gudapati Lakshminarayana SC for Municipalities in Rayalaseema Region CORAM : THE CHIEF JUSTICE LISA GILL SRI JUSTICE CHALLA GUNARANJAN DATE : 16th July 2026 ORDER: (per Hon’ble Sri Justice Challa Gunaranjan) Both these writ petitions are preferred challenging the action of respondent municipality in levying and demanding property tax on the buildings and other structures where respective petitioners have been running educational institutions to be in contravention to Section 88(c) of Andhra Pradesh Municipalities Act, 1965 and consequently, to direct respondents not to levy the property tax. 2. (a) Both the educational institutions i.e., PHR Jawahar Bharathi Junior College in W.P. No.29484 of 2014 and Jawahar 2 HCJ & CGR, J W.P. Nos.29450 and 29484 of 2014 Bharathi Degree College in W.P. No.29450 of 2014, are sponsored by the very same society, namely ‘Visvodaya’, society registered under the provisions of Societies Registration Act, 1960. It is stated that both these institutions are recognized institutions and were admitted to grant-in-aid in the year 1968 itself. It is claimed that the institutions collect barely minimum tuition fee and are essentially charitable in nature. (b) That being so, the respondent municipality had issued a demand notice dated 20.04.2013 demanding payment of property tax in respect of various buildings where colleges are being run. Appropriate reply was issued on 29.04.2013 raising a plea that recognized educational institutions were exempted from payment of property tax by virtue of Section 88(c) of A.P.Municipalities Act, 1965. (c) Despite offering said explanation, the respondent went ahead in issuing demand notices even dated 31.07.2014 levying property tax. (d) Assailing the same, present writ petitions are preferred. 3. Sole respondent filed counter stating that though subject institutions are aided educational institutions and that the salaries 3 HCJ & CGR, J W.P. Nos.29450 and 29484 of 2014 of staff are borne by Government from time to time, nevertheless the institutions are collecting fees from the students, indicating that the same are being run on profit basis, therefore, rightly the respondent imposed property tax. Further, in the counter, it is also pleaded that Full Bench of composite High Court in Kakinada Education Society, Kakinada v. Kakinada Municipal Corporation1 has held that merely being recognized educational institutions does not absolve from the liability of property tax, unless it is established that the buildings used by the institutions are put to charitable use and purpose. Therefore, the respondent has pleaded for dismissal of the writ petitions. 4. Heard Sri V.R.Machavaram, learned counsel, appearing for the petitioners in both writ petitions and Sri Gudapati Lakshmi Narayana, learned standing counsel for Municipalities, appearing for the respondents. 5. The primary contention of learned counsel for petitioners is that by virtue of Section 88(1)(c), all the recognized educational institutions are exempt from payment of property tax on the buildings where the colleges are run. Very same issue has been considered by Full Bench of composite High Court in Kakinada 1 W.P. No.4214 of 2006 and batch, dated 28.12.2006 4 HCJ & CGR, J W.P. Nos.29450 and 29484 of 2014 Education Society, Kakinada1. Interpreting Section 88(1)(c), it has been held as follows: “Under Section 85 of the A.P. Municipalities Act the Municipality has been empowered to levy tax and section 88 is a provision which grants certain exemptions. The relevant clause for the purpose of the present controversy is sub- section (1) (c) of Section 88 which lays down, "recognized educational institutions including hostels, public buildings and places used for the charitable purpose of sheltering destitute or animals and libraries and playgrounds which are open to the public" This sub-section was redrafted in 1994 by Act 3 of 1994. There was a sub-section (bb) to Section 88 of the Act which was deleted subsequently. Sub-section (bb) was in the following terms, "Educational institutions upto 10th class, the buildings of which are donated by charitable institutions or Philanthropists, or which are depending on the grant- in-aid by the government for the maintenance and such other educational institutions which are not running purely on commercial lines, but serving the cause of primary education which the Government may consider from time to time." Sub-section (c) before the amendment was in the following terms, 5 HCJ & CGR, J W.P. Nos.29450 and 29484 of 2014 "buildings used for hostels, public buildings and places used for the charitable purpose of sheltering the destitute or animals, and libraries and playgrounds which are open to the public." The redrafting of sub-section (c) and deletion of sub- section (bb) would also be a pointer for coming to the correct interpretation of sub-section (c). Mr.C.Kodanda Ram, learned counsel appearing for the petitioners submits that sub-section (c) can be interpreted to mean that all recognized educational institutions are exempt from tax under Section 85 of the Act. He places emphasis on the word "and" before ‘places' and after 'buildings' to give such an interpretation. But, in our view, the most important word in the whole sub-section is the word "including" before 'hostels' and after ‘institutions'. If the word "including" is read along with the word "and", which is found in between 'places' and ‘buildings', it becomes crystal clear that recognized educational institutions shall be exempt from tax where the educational institutions which included hostels, public buildings and places used for the charitable purpose or for the purpose of sheltering destitute or animals and libraries and playgrounds which are open to the public. There was no need for the legislature to use the word "including", if the intention of the legislature was to exempt all the educational institutions. Therefore, in our view, all the recognized educational institutions including hostels, public buildings and places used for charitable purposes are exempt under Section 85 of the Act provided those institutions, hostels, 6 HCJ & CGR, J W.P. Nos.29450 and 29484 of 2014 public buildings and places are used for charitable purposes. That the charitable purpose is necessary only for the places other than recognized institutions as suggested by Mr.C.Kondanda Ram, learned counsel, is, according to us, not correct view. However, it will always be a question of fact whether a particular institution is charitable institution or not. Therefore, while answering the reference in the terms as mentioned hereinabove, we make it clear that we have not gone into the question as to whether the petitioners' institutions are charitable institutions or not. Therefore, with the consent of the learned counsel for the parties, we dispose of the writ petitions as well with an observation that before levying of the tax on the petitioners' institutions, the authorities concerned should address to the question as to whether the institutions are charitable institutions or not and for such purpose the petitioners are at liberty to make representations to the concerned authorities within one month and after considering such representations, the authorities may pass appropriate orders since at no point of time the authorities have considered whether the petitioners' institutions are charitable institutions or not. Therefore, we are passing such orders to enable the authorities to pass fresh orders after considering the submissions of the petitioners. We are also quashing the impugned notices. The respondents shall be at liberty to raise fresh claims, if any, after hearing the petitioners and deciding their claim that they are charitable institutions.” 7 HCJ & CGR, J W.P. Nos.29450 and 29484 of 2014 6. Therefore, we are of the view that above judgment of Full Bench squarely covers the issue raised even in the present writ petitions. Accordingly, these writ petitions stand disposed of with following direction: The petitioners are permitted to make representations to the respondent within one month from today and after hearing the petitioners and considering such representations, the respondent may pass appropriate orders to determine the question as to whether they are charitable institutions or not and subject to such determination, the respondent is at liberty to raise fresh demand, if any and till then, the impugned demand notices shall remain in abeyance. It is also clarified that in case petitioners do not adhere to the timeline mentioned above, the respondent is at liberty to pass appropriate orders. There shall be no order as to costs. As a sequel, miscellaneous petitions pending in this case, if any, shall stand closed. LISA GILL, CJ CHALLA GUNARANJAN, J ss