Running a School Is Not Enough: Bombay High Court on Property Tax Exemption for Educational Trusts
Jai Hind Sindhu Education Trust v. State of Maharashtra (Writ Petition No. 987 of 2012), decided by the Bombay High Court in October 2026 If your trust runs a school, does it automatically get a property tax exemption? The Bombay High Court has just answered that question with a firm “no”. A Division Bench of Justice Bharati Dangre and Justice Manjusha Deshpande has held that education, by itself, is not a charitable purpose for the purposes of municipal property tax. The trust must prove, with material, that its buildings are used for a public charitable purpose, and it must do so every year. The background Jai Hind Sindhu Education Trust was registered in 1955 as a public charitable trust under the Bombay Public Trusts Act. It runs a primary school, a high school and junior college, and a commerce college in Pimpri, Pune. Some of these institutions are aided and some are unaided, and the trust runs them as linguistic minority institutions. The dispute began when the Pimpri Chinchwad Municipal Corporation (PCMC) issued a notice in 1999 seeking property tax going back to 1982. A demand of about Rs 6.5 lakh was later confirmed. The trust went to the High Court, asking for a declaration that it is exempt from property tax and for the demands and any future demands to be quashed. The petition was filed in 2012 and was decided only in October 2026. The Advocate General assisted the Court at its request. What the trust argued The trust’s case was simple. Its only object is to promote and manage educational institutions. It works on a no-profit basis, and its funds are used only for education. Because it is a public charitable trust and a minority institution, it said, its buildings fall within the exemption in Section 132(1)(b) of the Maharashtra Municipal Corporations Act, 1949. It also leaned on the Supreme Court’s decision in Municipal Corporation of Delhi v. Children Book Trust. The Corporation and the State countered on two fronts. First, they raised a preliminary objection that a statutory appeal was available, so a writ petition was not the right route. Second, on merits, they argued that simply calling oneself a charitable educational institution is not enough to claim an exemption. What the Court held Education per se is not automatically “charitable”. The Court refused to accept the blanket proposition that every educational institution is entitled to exemption. It read Children Book Trust as not laying down any such absolute rule. For education to count as a charitable purpose, there must be an element of public benefit or philanthropy. A school run on commercial lines does not qualify merely because it is a school. Both conditions in Section 132 must be met. Section 132(1)(b) exempts buildings and lands that are solely occupied and used for a public charitable purpose. Section 132(2) takes away the exemption where trade or business is carried on, or where rent is derived. Reading this with Section 9 of the Maharashtra Public Trusts Act, the Court held that the exemption requires sole occupation and use for a public charitable purpose. Being a linguistic […]
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