Catholic religious congregations in Kerala are to challenge a state court’s order which withdrew tax exemption that religious priests and nuns enjoyed as employees of government-aided educational institutions for decades.
The court in the southern Indian state refused to accept their argument that they do not take their salaries for their personal use but instead they go to their respective religious societies.
“We have now decided to appeal against the order before the Supreme Court of India,” said Father Jacobi Sebastian, president of the Kerala Conference of Major Superiors.
Father Sebastian, a member of the Oblates of St. Joseph, told UCA News on Aug. 9 that they are also planning a larger meeting of church officials, major superiors and financial consultors on Aug. 16 to chart the next steps.
The court quoted the Bible to say “Render unto Caesar the things that are Caesar’s, and unto God the things that are God’s.”
“We are reminded of the above teachings of Jesus Christ … while we consider an engrossing question on the liability of tax deduction at source from the salary paid to teachers who are nuns or priests of the religious congregations,” the court said.
The court also said canon law has no overriding impact ‘on the laws of the land’
The legal clash began in 2014 after the federal Income Tax Department ordered an end to tax exemption given to the Catholic religious priests and nuns since 1944. It asked the government treasury to deduct tax before paying salaries.
Three priests and a nun challenged the order soon after it was issued. A single bench of Kerala High Court dismissed their demand for exemption and upheld the Income Tax Department’s order.
The petitioners appealed before a higher bench of the court along with 49 others, but the court dismissed their demand on July 13.
The lawyers of the petitioners also quoted from the Church’s canon law to say that people who take “a perpetual vow of poverty” undergo a civil death and thereafter they are not considered persons under the Church’s laws.
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Such an argument, the court said, is “too far-fetched and is legally untenable.” The court also said canon law has no overriding impact “on the laws of the land.”
The court said canon law cannot be extended to cover all situations in the life of a nun or a priest or situations governed by statutes enacted by the legislature. The income tax law does not recognize the concept of civil death.
The petitioners also argued that tax deduction infringes upon their “right to profess, practice and propagate religion” guaranteed in the Indian constitution.
But the court said if a valid law permits deduction of tax, “we find ourselves at a loss to assimilate the scope of the contention that deduction of tax at source violates the fundamental right to freedom of religion. We reject the said contention.”
A section of Catholics, including some priests, said the priests and nuns should accept the verdict and pay tax just as other citizens. They warn that moving Supreme Court would only waste time and resources.
The religious keep no income on their own and if they need to be a taxpayer a lot of changes will have to be made in the functioning of religious congregations
“I was a teacher in a government-aided institution and I paid my taxes like any other employee. The religious should not seek such exemption,” said a diocesan priest, who asked not to be named.
Father Sebastian admitted that diocesan priests pay their taxes but that is because “they do not take a vow of poverty,” he said.
“The religious keep no income on their own and if they need to be a taxpayer a lot of changes will have to be made in the functioning of religious congregations,” Father Sebastian said.
Madras High Court, the state court in the southern state of Tamil Nadu, in March 2019 also ordered religious priests and nuns to pay taxes on their salaries.
The Tamil Nadu religious have now moved the Supreme Court and the top court has given a temporary suspension of the execution of the high court’s order.