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IN THE HIGH COURT OF KERALA AT ERNAKULAM
SHAJI P.CHALY, J.
India Bible College And Seminary India Gospel Outreach (IGO) Campus – Appellant
Versus
The State Of Kerala – Respondent
WP(C) No. 9443 of 2014
Decided on : 18-11-2022
Travancore Cochin Literary Scientific and Charitable Societies Registration Act, 1955 - Kerala Building Tax Act, 1975 - Section 3(1)(b), (2), (1)(a) - Charitable Societies - Declining Exemption to Part of Buildings - Filed being aggrieved by order passed by State, respondent No.1, declining exemption under Section 3(1)(b) of Kerala Building Tax Act, 1975 to some part of buildings of petitioner – Government, having found that building constructed by petitioner, is used principally for religious purposes - Para 11.
Finding of the Court :
Action which flows from charitable thinking is not directed towards benefiting oneself and it is always directed at benefiting others - It is this direction of thought and effort and not result of what is done in terms of financially measurable gain, which determines act as charitable and which qualifies for exemption under Section 3 of Act - Therefore, charitable purpose contemplated in Section 3 of Act does not necessarily exclude carrying on activities for which charges are levied on those who can pay and what is relevant is whether building is principally used for charitable purposes - Provisions of Section 3(1)(b) of Act, 1975 and principles of law evolved in aforesaid case, Court have no hesitation to hold that Exhibit P5 order passed by Government declining exemption to part of buildings belonging to petitioner, such as kitchen, dining hall, staff quarters and car porch, cannot be sustained under law - To put it otherwise, aforesaid areas of buildings principally used for religious purpose are integral and inevitable parts of buildings, and also incidental to sustain principal use of religious purpose - There is also no case for Government that those portions are used for any commercial purposes - Needless to say, Exhibit P5 order passed by Government and consequential Exhibits P3, P4 and P4(a) orders of assessment demand etc., cannot be sustained under law they are quashed.
Result: Petition allowed.
JUDGMENT :
The petitioner, a religious educational institution owned and managed by K.E. Abraham Foundation, is a society registered under the Travancore Cochin Literary Scientific and Charitable Societies Registration Act, as is evident from Exhibit P1 registration certificate dated 04.10.1989.
2. The writ petition is filed being aggrieved by the order passed by the State of Kerala, respondent No.1, declining exemption under Section 3(1)(b) of the Kerala Building Tax Act, 1975 (‘Act, 1975’ for short) to some part of the buildings of the petitioner institution, such as kitchen, dining hall, staff quarters and car porch, despite finding that the principal activities in the entire building are to provide religious education. According to the petitioner, the society is established for the purpose of providing religious education and other religious and charitable services to the needy and poor people.
3. It is also the case of the petitioner that as part of the said project, the foundation is running several institutions, including the institution referred to in the writ petition. That apart, it is pointed out that the main aim of the institution is to equip the students with a thorough understanding of the teachings of the Bible to give a total view of life in its spiritual, cultural, political and environmental dimensions. Various other contentions are raised with respect to the manner in which the institution is conducted.
4. According to the petitioner, after the completion of the construction of the building in an extent of 36 acres of property situated in various survey numbers of the Eraviperoor Village, Thiruvalla Taluk, the petitioner has submitted nil reports and claimed exemption from the building tax as provided under Section 3(1)(b) of the Act, 1975, since all the buildings are completely used for religious and educational purposes.
5. However, the matter was referred by the third respondent to the State Government as provided under Section 3(2) of the Act, 1975, since the assessing authority was disputing the claim for exemption. Even though the Government has granted exemption for the area used for the bible college, balcony, prayer hall, generator room; and the area of the hostel building, subject to the final outcome of the appeal pending before the Apex Court. However, exemption was declined in respect of kitchen, staff quarters and car porch, as is evident from Exhibit P3 order dated 24.03.2014 and Exhibit P4(a) demand notice dated 24.03.2014. The petitioner was also served with Exhibit P5 order issued by the State Government dated 17.03.2014. It is, thus, challenging the legality and correctness of the aforesaid orders, the writ petition is filed.
6. A counter affidavit is filed by the State Government, respondent No.1, justifying the stand adopted by it and also stating that the Government has exempted portions of the building which is to be exempted as per the provisions of the Act, 1975, and that the assessment has been done only in respect of those building which are found to be assessable by the Government as per due process as laid down under the Act, 1975. Other contentions are also raised to justify the order of assessment and the order passed by the Government in the reference made by the Tahsildar.
7. I have heard the learned counsel for the petitioner Sri. Lal K. Joseph and Smt. M. M. Jasmine, learned Government Pleader, and perused the pleadings and material on record.
8. The learned counsel for the petitioner has advanced arguments in accordance with law deliberations made above.
9. The learned Government Pleader has advanced arguments supporting the orders of assessment and the Government order declining exemption. Exemption to a building is provided under Section 3(1) of the Act, 1975. Section 3(1)(a) of the Act, 1975 deals with the buildings owned by the Government of Kerala or the Government of India or any local authority. Clause (b) of Section 3(1) deals with buildings used principally for religious,
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Charitable purpose contemplated in Section 3 of Act does not necessarily exclude carrying on activities for which charges are levied on those who can pay and what is relevant is whether building is p....
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