Renting Dharamshala On Nominal Rent For Marriages Not Commercial, No Property Tax: Punjab and Haryana High Court
The Punjab and Haryana High Court has held that if Dharamshala is provided at a nominal rent for conducting marriages, it will not amount to a commercial purpose.The division bench of Justice Rintu Bahri and Justice Manisha Batra has observed that Dharamshalas are not liable to pay the property tax.The petitioner's tax on lands and buildings was assessed, and the assessee was served with a...
The Punjab and Haryana High Court has held that if Dharamshala is provided at a nominal rent for conducting marriages, it will not amount to a commercial purpose.
The division bench of Justice Rintu Bahri and Justice Manisha Batra has observed that Dharamshalas are not liable to pay the property tax.
The petitioner's tax on lands and buildings was assessed, and the assessee was served with a notice of demand, including arrears, in the prescribed forms.
In order to recover this amount, the Joint Commissioner, NIT Zone Faridabad, exercising the power of Commissioner 401(2) of the Haryana Municipal Act, 1994, ordered the attachment of the Khan Daulat Dharamshala and buildings constructed thereon. He gave the direction to put the property up for public auction in the Municipal Auditorium at the NIT in Faridabad for the recovery of the tax.
The department contended that the only reason for not extending the benefit of exemption is that the petitioner, Dharamshala, is charging money for marriage purposes. The petitioner, Dharamshala, has not undertaken any type of charitable activity and profits by renting the building for marriage parties and other commercial functions.
The court has observed that, with respect to conducting marriages, Dharamshala is registered for the use of the community as such, and conducting marriages amounts to extending further service to the community. This will not amount to any commercial activity as such. There are private institutes that are made only for marriage purposes and are very expensive. These are the institutes that can be considered to be commercial activities for conducting marriage ceremonies.
The court set aside the auction.
Case Title: Daulat Ram Khan Versus State of Haryana
Citation: CWP-5348-2007 (O&M)
Citation: 2023 LiveLaw (PH) 34
Date: 13.02.2023
Counsel For Petitioner: Rajesh Lamba
Counsel For Respondent: Prateek Mahajan