The Karnataka High Court held that buildings used for educational purposes are generally exempt from property taxes, except when it's proven they're used for purposes not incidental to educational purposes.

The Ballari City Corporation (Corporation) had raised a demand for property tax with respect to a primary school that was run by the Prudence Foundation (Trust), a registered trust.

The Trust had contended that Section 110 (1) (i) of the Karnataka Municipal Corporations Act, 1976 (the Act) provided an exemption to educational institutions from making payment of property tax. On the other hand, the Corporation contended that in order to be granted an exemption for property tax, an application had to be made by the Trust for the same.

A Single Bench of Justice Suraj Govindaraj observed, “There would be no requirement for application of mind to ascertain if the exemption is available to educational institution or not. It is only when the Corporation were to claim that the concerned building has been used for the purpose other than educational purposes or a purpose which is not incidental to educational purposes that a claim for property tax can be made.

Advocate T.M. Nadaf represented the petitioner, while AGA Ashok Kattemani appeared for the respondents.

The Court further explained that Section 110 (1) (i) of the Act provides for “general exemption from making payment of taxes in respect of building which is used for educational institution or purpose is concerned.

The Court held that there was a general exemption from making payment of property tax in respect of a building which was being used for educational purposes.

The Court stated that “there is no such assertion which has been made except to contend that an exemption application ought to have been filed by the petitioner which as aforesaid would not be applicable to the General Exemptions granted under Section 110 (1) (i) of the Act.

Consequently, the Court held that the Trust would not be liable to make payment of any municipal property taxes on premises used for educational purposes and that the Corporation could claim property tax if the property was used other than for educational purposes.

Accordingly, the High Court allowed the writ petition.

Cause Title: The Prudence Foundation v. The State Of Karnataka & Ors. (Neutral Citation: 2024:KHC-D:3517)


Petitioner: Advocates T.M. Nadaf and Gayatri S.R.

Respondents: AGA Ashok Kattemani

Click here to read/download the Order