Judgment Jayant Patel, J.—The short facts of the case appear to be that the Petitioner No.1 is a charitable Trust registered under the Bombay Public Trust Act. It is having the property located at Palitana and the property comprises of Dharamshala, which is used for the pilgrimage of the people believing in Jainism. As per the petitioner Trust, in the said Dharamshala, various facilities of accommodations are being provided to thousands of pilgrims visiting the holy place of Palitana and there is no condition precedent for charging any amount. It is the case of the petitioners that the entire premises of Dharamshala are used for giving accommodation free of charge for the pilgrims. If the pilgrims so feel, they may offer amount by way of donation, but the same is not compulsory and the donation is also being used for charitable purpose. 2. As per the petitioners, the property of the petitioner Trust is exempted for the levy of education cess and for such purpose, the Government has issued Notification dated 24.12.1963. Therefore, no education cess can be recovered from the property held by the petitioners, but it appears that the Municipality had taken action and notices were issued for recovery of education cess by coercive measure and the petitioner had preferred Special Civil Application No. 921 of 1986, wherein this Court observed that the petitioners can approach the State Government by preferring the appeal. A copy of the order passed by this Court on 09.04.1986 in Special Civil Application No. 921 of 1986 is also produced on record. It was also observed by this Court that till the applications are decided, the Municipality shall not proceed to collect any education cess from the petitioners. It appears that thereafter the State Government considered the matter and vide order dated 25.11.1987 - Annexure “C”, the State Government took the view that as the portion of the Dharamshala is given on rent for business purpose, the petitioner is not entitled for exemption and, therefore, the decision is taken accordingly. It is under these circumstances, the petitioners have approached this Court by preferring the present petition. 3. It may be recorded that as per the contention of the petitioners earlier respondent No. 3 Municipality did grant exemption to the portion of the premises, which was used for Dharamshala and for the property, which was given on rented basis, a separate assessment was made. 3. It may be recorded that as per the contention of the petitioners earlier respondent No. 3 Municipality did grant exemption to the portion of the premises, which was used for Dharamshala and for the property, which was given on rented basis, a separate assessment was made. Hence, the petitioners have approached this Court with the prayer to declare that the petitioners are entitled for the exemption from payment of education cess as per the Government Notification dated 24.12.1963 on the land and building of Dharamshala and have prayed for setting aside of the order of the State Government dated 25.11.1987 - Annexure “C”. The petitioners have also consequently prayed to direct respondent Municipality to refund the amount of the cess already collected with the interest at the rate of 9% per annum. 4. None has appeared for the petitioners. However, I have heard Mr. Pandya, learned AGP appearing for the State Authorities and Mr. Vyas, learned Counsel appearing for respondent No. 3 Municipality. 5. Section 13 of the Gujarat Education Cess Act, 1962 (hereinafter referred to as the ‘Act’), inter alia, provides for enabling power to the State Government to grant exemption. It is an admitted position that the State Government has issued Notification dated 24.12.1963 for grant of exemption to the class of the land and building solely for public worships or for public charitable purpose and owned by a public Trust registered under the Bombay Public Trust Act or for a Society registered under the Societies Registration Act. The explanation provides that if the building or the land or the portion thereof is used for any trade or any business is carried on or any rent is derived from such building or the land or the portion thereof, it shall not be deemed solely occupied and used for public worship or for public charitable purpose. The relevant portion of the Notification for ready reference reads as under:— “2. Lands and buildings or portions thereof solely used for public worship or for a public charitable purposes and held for a public trust registered under the Bombay Public Trust Act, 1950 or for a society registered under the Societies Registration Act, 1960. The relevant portion of the Notification for ready reference reads as under:— “2. Lands and buildings or portions thereof solely used for public worship or for a public charitable purposes and held for a public trust registered under the Bombay Public Trust Act, 1950 or for a society registered under the Societies Registration Act, 1960. Explanation:—The following buildings and lands or portions thereof shall not be deemed to be solely occupied and used for public worship or for a public charitable purposes within the meaning of Clause 2 namely:— (a) buildings or lands or portions thereof in which any trade or business is carried on, and (b) buildings or lands or portions thereof in respect of which rent is derived, whether such rent is or is not applied solely to religious or charitable purposes.” 6. The aforesaid resolution, if read as it is, it is apparent that if the land or building is solely or a portion thereof is solely used for public worship or public charitable purposes and then held by a Public Trust registered under the Bombay Public Trust Act or Society registered under the Societies Registration Act, the exemption is available. The explanation if considered would not go beyond the Clause 2 itself and at the most, can be read as an exception to the category of Clause 2. Therefore, if the building or the portion thereof is used for trade or business is carried over such land or portion thereof, it may not be deemed to be solely occupied for the public worship or public charitable purpose. Such explanation can be given effect to the extent of the portion which is used for trade or business purpose or for deriving rental income. The explanation cannot mean to convey that if out of the whole building which is used for religious or charitable purpose, a portion thereof is used for trade or business or rental income is derived therefrom, no exemption whatsoever would be available for the whole building. 7. In such circumstances, the exemption may not be available in respect of the portion which is used for business or trade or rental income as derived therefrom. But, the exemption would still be available for the property which is used for public worship or public charitable purpose. 7. In such circumstances, the exemption may not be available in respect of the portion which is used for business or trade or rental income as derived therefrom. But, the exemption would still be available for the property which is used for public worship or public charitable purpose. It may be that in a given case, a premises in part or a portion thereof is used for public worship or public charitable purpose and a portion thereof is also used for trade or business. In such circumstances, it will be required for the concerned Municipality to separately make assessment for the portion which is used for public worship or for public charitable purpose and a separate assessment for the portion of the premises which is used for trade or business or rental income is derived therefrom. In respect of the prior category, the exemption for the education cess would be available, whereas for the later category, the exemption would not be available. Such segregation for the purpose of assessment of tax is required under such contingencies. The aforesaid is apparent since in Clause 2, the language used is “lands and buildings or portion thereof”. Therefore, all contingencies are considered by the authority while issuing the notification that if the portion is used for pubic worship or public charitable purpose, the exemption would be available only qua that. But, if a portion thereof is used for trade or business or rental income is derived therefrom, such benefit of exemption would not be available. 8. If the facts of the present case are considered in light of the aforesaid observations, it appears that the State Government has declined the exemption on a mere ground that a portion of it is given on rental basis for trade purposes. It has ignored the aspects that the building as such, is used for Dharamshala and only a portion of it is used for trade or for deriving rental income. It was required for the State Government to direct the Municipality to undertake separate assessment and to grant exemption in respect of the property, which is used for public worship or public charitable purpose of Dharamshala and it could have disallowed the exemption qua the portion of the property which has been given for trade purposes on rental basis. It was required for the State Government to direct the Municipality to undertake separate assessment and to grant exemption in respect of the property, which is used for public worship or public charitable purpose of Dharamshala and it could have disallowed the exemption qua the portion of the property which has been given for trade purposes on rental basis. Therefore, the impugned decision of the State Government is not only arbitrary, but is running counter to the Government Resolution dated 24.12.1963 (Annexure-A) and also not in accordance with the Scheme for grant of exemption to the proportionate extent of utilisation of the property for public worship or for public charitable purpose. 9. In view of the above, the impugned order passed by the State Government dated 25.11.1987 is quashed and set aside with the direction that the matter shall stand restored to the Government for considering the question of exemption and the Government shall decide the said aspects keeping in view the observations made by this Court in the present Judgement and shall render the decision as early as possible preferably within a period of 3 months from the receipt of the order of this Court. 10. Petition is allowed to the aforesaid extent. Rule made absolute accordingly. No order as to costs.