Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(SC) 116

SUPREME COURT OF INDIA
R. F. NARIMAN, B.R. GAVAI, JJ.
GOVERNMENT OF KERALA & ANR – APPELLANT
VERSUS
MOTHER SUPERIOR ADORATION CONVENT – RESPONDENT
CIVIL APPEAL NO. 202, 203, 204, 205, 206, 207 OF 2012, 6589 OF 2015, 10298, 10297, 10881 OF 2016, 8351, 8352 OF 2014, 5036, 4445, 4446, 4447 OF 2015, 7368 OF 2016, 745 OF 2021 (ARISING OUT OF SLP (CIVIL) NO.905 OF 2012), 746 OF 2021 (ARISING OUT OF SLP (CIVIL) NO.12235 OF 2014), 747 OF 2021 (ARISING OUT OF SLP (CIVIL) NO.13874 OF 2014)
Decided On : 01-03-2021

Advocates appeared:
For the parties :Mr. C. K. Sasi, M. P. Vinod, Liz Mathew, Jishnu M.L., Priyanka Prakash, Beena Prakash, G. Prakash, P.A. Noor Muhamed, Giffara S., Bilal Niamathulla, Ruxana P.N., Rameshwar Prasad Goyal, A. Venayagam Balan, Sajith. P, T. G. Narayanan Nair, P. A. Noor Muhamed, Giffara S., Bilal Niamathulla, Ruxana P.N., Jose Abraham, Pawanshree Agrawal, Advocates

Headnote:
Kerala Building Tax Act, 1975 - Section 3(1)(b) - Building tax - Assessment order - Assessment to tax - Petitioner was heard and he claimed that building is exclusively used for accommodating nuns who are engaged in religious and charitable activities - No part of building is rented out or used for any other purpose - On perusal of records the documents produced at time of hearing it has become evident that convent is not principally used for any religious or charitable purpose - District Collector, Idukki as per letter read as fourth paper above has also informed that no charitable activities are undertaken in convent and building is used for residential purpose of nuns - Whether building used for accommodating a school can be treated as a building used for charitable purposes or religious activities - Held, it is obvious that beneficial purpose of exemption contained in Section 3(1)(b) must be given full effect to, line of authority being applicable to facts of these cases being line of authority which deals with beneficial exemptions as opposed to exemptions generally in tax statutes - This being case, a literal formalistic interpretation of the statute at hand is to be eschewed - Court must first ask ourselves what is object sought to be achieved by provision, and construe statute in accord with such object - And on assumption that any ambiguity arises in such construction, such ambiguity must be in favour of that which is exempted - Consequently, for reasons given by Court, Court agree with conclusions reached by impugned judgments of Division Bench and Full Bench - Appeals filed by State of Kerala are dismissed - Appeal filed in Civil Appeal No.204 of 2012 is allowed - Appeals filed by State of Kerala are dismissed - Appeal filed in Civil Appeal No.204 of 2012 is allowed.

Judgement Key Points

Point 1 (!)
Point 2 (!)
Point 3 (!)

What is the scope of exemption under Section 3(1)(b) of the Kerala Building Tax Act, 1975 regarding buildings used principally for religious, charitable or educational purposes or as factories or workshops?

What is the interpretation approach for exemptions in fiscal statutes when beneficial exemptions are involved, and should they be construed liberally or strictly?

What is the ruling on whether hostel buildings owned by educational institutions and used to accommodate students qualify for exemption under Section 3(1)(b) of the Act?

JUDGMENT :

R.F. NARIMAN, J.

1. Leave granted.

2. All these appeals pertain to an exemption provision contained in the Kerala Building Tax Act, 1975. Under Section 3(1)(b) buildings that are used principally for religious, charitable or educational purposes or as factories or workshops are exempted from building tax under the Act. All of the appeals, except one, are by the State of Kerala against a judgment dated 22.11.2007 passed by a Division Bench of the Kerala High Court in Government of Kerala & Anr v. Mother Superior Adoration Convent (Civil Appeal No.202 of 2012) and a Full Bench judgment in State of Kerala & Ors v. Unity Hospital (P) Ltd. (Civil Appeal No. 207 of 2012), being a judgment dated 21.12.2010. Both judgments decided to exempt the buildings in question. The other appeals by the State contain judgments which follow either or both of these judgments. The only appeal by an assessee namely, Administrator, Jos Giri Hospital v. Government of Kerala (Civil Appeal No.204 of 2012), is from a judgment of the Division Bench of the Kerala High Court deciding the case in favour of the State. However, this judgment was referred to the Full Bench which decided the judgment in State of Kerala & Ors v. Unity Hospital (P) Ltd. (Civil Appeal No. 207 of 2012) and has been stated to have reached an incorrect conclusion.

3. On facts, there is a similarity in most of the cases before us. Either there are residential accommodations for nuns as in the first appeal before us or there are hostel accommodations which are attached to various educational institutions. In both cases, the State claims that no exemption should be granted as residential accommodation for nuns and hostels for students would be for residential as apart from religious or educational purposes and would not therefore be covered by the exemption contained in Section 3(1)(b) of the Act.

4. We may take up the facts in Civil Appeal No.202 of 2012. In this case, by an order of assessment dated 14.03.2002, building tax was levied on residential accommodation for nuns who underwent religious training to become nuns in a convent. Against the aforesaid assessment to tax, the respondent filed O.P. No.11246 of 2002 and the High court vide its judgment and order dated 29.5.2002 quashed the aforesaid assessment order and directed the Tehsildar to refer the case to the Government for its decision. A representation was made to the Government by the respondent on 10.2.2004 in which it was stated:

“2. At present we the 8 sisters residing here are deputed to render services in religious as well as charitable needs of the Vinjan Matha Church, East Thodupuzha and the people around the Church, irrespective of caste, creed and community.

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In order to become sisters, we had undergone 8 years rigorous religious education and training and then decided to lead a life of a SANYASINI throughout our life.

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8. The vow of obedience, is intended to make use of the individual sisters by their elected superior sisters, where their services are most needed. It means, we the present sisters attached to this convent at present are not permanent members here. We have come from different places, and each one of us will be individually transferred to other places, as our Superior’s Council decides.

9. So much so, the convent is a permanent set up here to render the religious and charitable needs of the locality, whereas the members are individually deputed to render the services for a period found proper.

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11. The convent was established by the Council decision of the St. Mary’s Province of the Congregation of the Sisters of Adoration of the Blessed Sacrament.

12. The building is also intended for accommodating the junior sisters who are undergoing their college education in the nearby Newman College - Thodupuzha. Thus, at present 8 students-sisters also are residing here.

13. The Building is two storeyed and measures approximately 5000sq.ft. The ground floor contains a prayer hall, k

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