{"id":24532,"date":"2010-09-15T00:00:00","date_gmt":"2010-09-14T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/st-sebastians-visitation-vs-state-of-kerala-on-15-september-2010"},"modified":"2016-10-09T00:30:21","modified_gmt":"2016-10-08T19:00:21","slug":"st-sebastians-visitation-vs-state-of-kerala-on-15-september-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/st-sebastians-visitation-vs-state-of-kerala-on-15-september-2010","title":{"rendered":"St.Sebastian’S Visitation … vs State Of Kerala on 15 September, 2010"},"content":{"rendered":"
Kerala High Court<\/div>\n
St.Sebastian’S Visitation … vs State Of Kerala on 15 September, 2010<\/div>\n
       \n\n  \n\n  \n\n \n \n  IN THE HIGH COURT OF KERALA AT ERNAKULAM\n\nWP(C).No. 6626 of 2007(L)\n\n\n1. ST.SEBASTIAN'S VISITATION HOSPITAL,\n                      ...  Petitioner\n\n                        Vs\n\n\n\n1. STATE OF KERALA, REPRESENTED BY\n                       ...       Respondent\n\n2. THE ASSESSING AUTHORITY (BUILDING TAX),\n\n3. TAHSILDAR,\n\n                For Petitioner  :SRI.BECHU KURIAN THOMAS\n\n                For Respondent  :GOVERNMENT PLEADER\n\nThe Hon'ble MR. Justice P.R.RAMACHANDRA MENON\n\n Dated :15\/09\/2010\n\n O R D E R\n                   P.R. RAMACHANDRA MENON J.\n                      ~~~~~~~~~~~~~~~~~~~~~~~\n                      W.P. (C) No. 6626 of 2007\n                      ~~~~~~~~~~~~~~~~~~~~~~~\n             Dated, this the 15th day of September, 2010\n\n                             JUDGMENT\n<\/pre>\n
       The issue involved in this case is, whether the rejection of the<\/p>\n
claim for exemption under Section 3 (1) (b) of the Kerala Building Tax,<\/p>\n
by the Government under Section 3 (2) of the Act,             is correct or<\/p>\n
sustainable.\n<\/p>\n
       2. The case of the petitioner is that, the petitioner is a ‘Hospital’,<\/p>\n
which is registered as a charitable institution and the income derived<\/p>\n
therefrom is used only for the purpose of charity, maintenance and up<\/p>\n
keep of the hospital. The building of the petitioner was subjected to<\/p>\n
assessment by the 3rd respondent\/assessing authority, who passed<\/p>\n
Ext.P3 assessment order, fixing the liability to the tune of Rs.<\/p>\n
2,88,000\/-.     The petitioner put forth a claim for exemption under<\/p>\n
Section 3 (1) (b).     The matter was referred to the Government for<\/p>\n
decision under Section 3 (2). After considering the merits, the claim for<\/p>\n
exemption was rejected as per Ext. P5, which in turn is under challenge<\/p>\n
in this Writ Petition.\n<\/p>\n
       3. The learned counsel for the        petitioner submits that, the<\/p>\n
reasoning given by the Government for negating the claim for<\/p>\n
exemption preferred by the petitioner is not at all correct or sustainable<\/p>\n
W.P. (C) No. 6626 of 2007
\n                                   : 2 :<\/span><\/p>\n
and that the same is contrary to the law declared by a Division Bench of<\/p>\n
this Court in State of Kerala Vs. St. Gregorious Medical Mission<\/p>\n
(1999 (2) KLT 230). The learned counsel further submits that, the very<\/p>\n
nature of the activities being pursued by the petitioner is discernible<\/p>\n
from Ext. P2 ‘bye law’ and that the financial status of the petitioner is<\/p>\n
also revealed from its audited income and expenditure statement.<\/p>\n
Placing reliance on the said documents, the learned counsel for the<\/p>\n
petitioner submits that, the hospital is running on loss and no profit is<\/p>\n
generated, as a natural consequence of the charity being extended by<\/p>\n
the petitioner and that the Government ought to have relied on the<\/p>\n
decision cited supra, while considering the issue\/claim for exemption.<\/p>\n
       4. The respondents 2 and 3 have filed counter affidavit rebutting<\/p>\n
the allegations and averments raised in the Writ Petition, with reference<\/p>\n
to the actual facts and figures, seeking to sustain the impugned order.<\/p>\n
Reliance is also sought to be placed on the decision rendered by this<\/p>\n
Court in Medical Trust Hospital Vs. State of Kerala (2004 (2) KLT<\/p>\n
139). Referring to the materials on record, it is contended that the claim<\/p>\n
for exemption was considered and analyzed by the Government before<\/p>\n
passing Ext.P5 order and the same does not suffer from any infirmity,<\/p>\n
either on facts or in law, which hence is not assailable under any<\/p>\n
circumstances.\n<\/p>\n
 W.P. (C) No. 6626 of 2007
\n                                     : 3 :<\/span><\/p>\n
       5. With regard to the crucial issue raised in the Writ Petition as to<\/p>\n
whether the petitioner, who is stated as running a charitable institution,<\/p>\n
is entitled to have the benefit of exemption mainly based on the ‘bye<\/p>\n
law’ and that no ‘profit’ is being generated is the point which has to be<\/p>\n
considered first. True, the requirement under the statute has been<\/p>\n
discussed in detail, in a decision rendered by a Division Bench of this<\/p>\n
Court in State of Kerala Vs. St. Gregorious Medical Mission (1992<\/p>\n
(1) KLT 230),       wherein some observation has been made with<\/p>\n
reference to the ‘profit’ i.e. being generated. But, it has to be borne in<\/p>\n
mind that the issue projected in that case (challenging the judgment of<\/p>\n
the Single Judge) was that admittedly ‘some income’ was being<\/p>\n
generated by the concerned institution and this being the position, the<\/p>\n
building was not liable to be exempted under the 3 (1) (c). Referring to<\/p>\n
the factual position, it was observed by this Court that, the generating of<\/p>\n
some income by itself will not take the institution outside the purview of<\/p>\n
the charitable activities to deny the benefit of exemption.    By virtue of<\/p>\n
the mandate under the provision, if the building is principally being used<\/p>\n
for charitable, religious or educational purpose, the party is entitled to<\/p>\n
get the benefit of exemption.      It was in the above belonged that, the<\/p>\n
factual position was analyzed and appreciated by the Court declining<\/p>\n
the interference in the appeal preferred by the State.<\/p>\n
 W.P. (C) No. 6626 of 2007
\n                                     : 4 :<\/span><\/p>\n
       6. With regard to the factual position in the present case, which<\/p>\n
led to issuance of Ext P5 is that, considering the nature of the challenge<\/p>\n
raised by the petitioner, the Deputy Tahasildar was required by the<\/p>\n
Government to conduct an inspection and to file a report, since during<\/p>\n
the course of hearing, it was revealed that, ‘separate wards’ are being<\/p>\n
provided for poor patients and such other factual aspects brought to<\/p>\n
light from the part of the petitioner. After conducting the inspection, the<\/p>\n
Deputy Tahasildar submitted a report stating that, the total plinth area<\/p>\n
of the building was 3553.84 Sq. M; the building is a three-storied<\/p>\n
building consisting of the central block having a total plinth area of<\/p>\n
1554.46 Sq. M which is being used for the office and the rest is used for<\/p>\n
hospital purposes. The ground floor of the south block is being used<\/p>\n
as ‘Chapel’, having a plinth area of 30.81 Sq. M. The first floor of the<\/p>\n
east block is 7 bedded portion, where it was displayed that, ‘no rent for<\/p>\n
serious patients’. Referring to the above vital statics, it is observed in<\/p>\n
Ext. P5 that, even if the said 69.05 Sq. M. is left out, the remaining<\/p>\n
3292.79 Sq. M. was being used as hospital, accepting fees from the<\/p>\n
patients. It was after considering the factual position as above, that the<\/p>\n
Government held that the building in question is not principally used for<\/p>\n
charitable purpose and hence is not eligible for exemption under<\/p>\n
Section 3 (1) (b) of the Act.\n<\/p>\n
 W.P. (C) No. 6626 of 2007
\n                                        : 5 :<\/span><\/p>\n
       7. There is absolutely no case for the the petitioner in the Writ<\/p>\n
Petition that the report submitted by the Deputy Tahasildar in the<\/p>\n
aforesaid terms is wrong or vitiated; nor is there any challenge with<\/p>\n
regard to the finding of the Government, as extracted in Ext. P5. The<\/p>\n
assertion made in the Writ Petition as well as during the course of<\/p>\n
hearing is that, the charging of fees from the patients, who can afford to<\/p>\n
pay, does not change the character of the charitable institution. But<\/p>\n
here, the question is whether exemption contemplated under the statute<\/p>\n
is to the ‘institution’ or the ‘building’. The provision clearly stipulates that<\/p>\n
the benefit under Section 3 (1) (b) is only in respect of the ‘building’ and<\/p>\n
not to the institution. The extent of use, so as to have it construed as<\/p>\n
being principally used for the activities eligible for exemption, has also<\/p>\n
been explained by a Division Bench of this Court as per the decision<\/p>\n
reported in Thirurangadi Muslim Orphanage Vs. Government of<\/p>\n
Kerala (2007 (2) KLT 822). Similar observation are also there, in the<\/p>\n
decision rendered by a learned Single Judge reported in Jacob Vs.<\/p>\n
Tahasildar (1988 (2) KLT 854).             With regard to the extent of the<\/p>\n
alleged charitable activities, to ascertain whether the building is<\/p>\n
principally used for the charitable activities, the building has to satisfy<\/p>\n
the requirements as made clear by this Court in the Medical Trust<\/p>\n
Hospital’s Case reported in Medical Trust Hospital Vs. State of<\/p>\n
 W.P. (C) No. 6626 of 2007
\n                                     : 6 :<\/span><\/p>\n
Kerala (2004 (2) KLT 139).\n<\/p>\n
       8. Coming to the case in hand, the question remains, what is the<\/p>\n
charitable extent being pursued in the building.          The extent of the<\/p>\n
income i.e being generated and also being used for such charitable<\/p>\n
activities could be ascertained from the documents or accounts in<\/p>\n
respect of the various activities as aforesaid. The only document which<\/p>\n
has been produced by the petitioner is Ext, P4, which is only a ‘profit<\/p>\n
and loss account’. The entire emphasis is sought to be placed by the<\/p>\n
petitioner on the said document stating that the institution not<\/p>\n
generating any profit and it is being run loss. Loss or absence of profit<\/p>\n
is not a ground to hold that the building is principally used for charity,<\/p>\n
loss may be resulted due to various circumstances like spend-thrift<\/p>\n
nature of the Management; mismanagement, lack of sufficient<\/p>\n
technical\/managerial skill or for such other reasons.        As such, merely<\/p>\n
for the reason that there is no profit and the institution is running on loss<\/p>\n
is not sufficient to arrive at an inference in favour of the petitioner, with<\/p>\n
regard to the liability to pay tax. Even otherwise, in view of the specific<\/p>\n
reference made by the Government in Ext. P5 order, that a substantial<\/p>\n
portion of the building is being used for accommodating patients from<\/p>\n
whom the fees are collected, the contention of the petitioner that the<\/p>\n
running of the hospital itself is a proof as to its principally being used for<\/p>\n
W.P. (C) No. 6626 of 2007
\n                                    : 7 :<\/span><\/p>\n
running a charitable institution, is not acceptable.    In the absence of<\/p>\n
any concrete evidence to substantiate that the building is principally<\/p>\n
being used for charitable activities, the finding made by the Government<\/p>\n
on the factual points as given in Ext. P5, stands intact.<\/p>\n
      In the said circumstances, this Court finds that, no interference is<\/p>\n
warranted. The Writ Petition fails and it is dismissed accordingly.<\/p>\n
                               P. R. RAMACHANDRA MENON, JUDGE<\/p>\n
kmd<\/p>\n","protected":false},"excerpt":{"rendered":"
Kerala High Court St.Sebastian’S Visitation … vs State Of Kerala on 15 September, 2010 IN THE HIGH COURT OF KERALA AT ERNAKULAM WP(C).No. 6626 of 2007(L) 1. ST.SEBASTIAN’S VISITATION HOSPITAL, … Petitioner Vs 1. STATE OF KERALA, REPRESENTED BY … Respondent 2. THE ASSESSING AUTHORITY (BUILDING TAX), 3. TAHSILDAR, For Petitioner :SRI.BECHU KURIAN THOMAS For […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,21],"tags":[],"class_list":["post-24532","post","type-post","status-publish","format-standard","hentry","category-high-court","category-kerala-high-court"],"yoast_head":"\nSt.Sebastian'S Visitation ... vs State Of Kerala on 15 September, 2010 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/st-sebastians-visitation-vs-state-of-kerala-on-15-september-2010\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"St.Sebastian'S Visitation ... vs State Of Kerala on 15 September, 2010 - 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