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IN THE HIGH COURT OF KERALA AT ERNAKULAM
Dinesh Kumar Singh, J.
St.George Church – Petitioner
Versus
The State of Kerala And Ors. – Respondents
WP(C) NO. 20621 OF 2022
Decided On : 24-01-2024
Building Tax Exemption - Religious Building - Kerala Building Tax Act, 1975, Section 3(1)(b), Section 5A - The court discussed the scope of Sections 3(1)(b) and 5, the charging provisions, and held that the residence of the Vicar of the Church and imparting of religious instruction to the students are activities integrally connected with the religious purpose of the Church, and therefore, prima facie, the view taken by the State Government does not appear to be correct.
Fact of the Case:
The petitioner, a Catholic Church, challenged the orders rejecting its claim for exemption of the building from payment of building tax and luxury tax. The building was used for conducting Sunday classes and as the residence of the Vicar of the Church.
Finding of the Court:
The court found that the residence of the Vicar of the Church and imparting of religious instruction to the students are activities integrally connected with the religious purpose of the Church, and therefore, the view taken by the State Government to decline the request of the petitioner for exemption from payment of the building tax is erroneous.
Issues: The main issue was whether the building was entitled to exemption from payment of building tax under Section 3(1)(b) of the Kerala Building Tax Act, 1975.
Ratio Decidendi: The court applied the interpretation of Sections 3(1)(b) and 5 of the Act as discussed in the case of Government of Kerala and Another v. Mother Superior Adoration Convent [(2021) 5 SCC 602] to determine that the activities conducted in the building were integrally connected with the religious purpose of the Church.
Final Decision: The present writ petition was allowed, the impugned order was set aside, and the matter was remitted back to the State Government to decide the issue afresh, after taking into account the decision of the Hon'ble Supreme Court in the case of Mother Superior Adoration Convent (supra).
JUDGMENT :
The petitioner, a Catholic Church, has filed the present writ petition impugning the orders rejecting its claim for exemption of the building from payment of building tax and luxury tax. Ext.P1 is the order of the Tahsildar dated 26.10.2015 assessing the area of the petitioner's building as 282.28 sq.metres and demanding onetime tax and luxury tax for the year 2015-16 onwards. Even though the petitioner filed appeal against Ext.P1, the Sub Collector referred the matter vide Ext.P3 dated 6.2.2016 to the Government for deciding the question of exemption of petitioner's building from payment of tax. The Government, vide Ext.P4 dated 7.2.2022, rejected the claim of the petitioner and restored Ext.P1 order of the Tahsildar. Hence, the petitioner is before this Court in the present writ petition challenging the aforesaid Exts.P1, P3 and P4 orders.
2. The petitioner has constructed the building having a plinth area of 277.84 sq.metres. On report of the concerned Village Officer, notices were issued to the petitioner for assessing one time building tax on the said building. However, despite service of notices, no objections were filed. Thereafter, the charge officer made measurement and reported that the plinth area of the building is 282.29 sq.metres. Since the threshold limit is 278.7 sq.metres, the petitioner's building was also assessed for luxury tax for the year 2015-16, vide the assessment order in Ext.P1 dated 26.10.2015. The petitioner aggrieved by the said assessment order filed appeal before the Sub Collector, Perinthalmanna. The petitioner filed objection in the appeal before the Sub Collector that the petitioner's building was exempted from payment of building tax, in view of Section 5 of the Kerala Building Tax Act, 1975 ('Act', for short) and the matter should be referred to the Government to take a decision underSection 3(1)(b) of the Act regarding exemption from payment of building tax on the building constructed by the petitioner. Thus the matter was referred to the State Government for considering the claim of the petitioner for exemption from payment of building tax under Section 3(1)(b) of the Act.
3. According to the petitioner, the Vicar of the Church, the building is owned by St.George Church, Kalikkavu, which comes under the Archdiocese of Thamarassery. The cellar portion of the building is covered and in that hall portion Bible classes are being conducted. The children of parishners numbering about 50 are attending the classes. The ground floor portion of the building is used for stay of the Vicar of the Church. The Church has no means to pay the tax on the building and therefore, exemption has been claimed.
4. However, the Tahsildar reported that he had made inspection of the building. All sides of the cellar portion is covered with provision for entrance. The plinth area of that hall is 119.5 sq.metres. The said portion of the building is used for conducting Sunday classes and the portion above hall portion is used for stay of Vicar of the Church.
5. The Government examined the contentions of the petitioner as well as the reports of the Tahsildar. On the basis of the report of the Tahsildar, the total plinth area of the building owned by St.George Church is 282.28 sq.metres. Out of the said area, 158.34 sq.metres portion is used
6. The Government has been of the opinion that the building, where Sunday school classes are conducted, will not come under Section 3(1)(b) of the Act for the purpose of granting exemption. Therefore, the claim of the petitioner for exemption from payment of the building tax under Section 3(1)(b) of the Act was rejected, against which the present writ petition has been filed.
7. Learned counsel for the petitioner submits that the building is integrally connected with the religious or education purpose and therefore the said building is also liable to be exempted from payment of building tax under the provisions of the Act. He further submits that the Hon'ble Supreme Court has co
AI
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Religious institutions are entitled to tax exemptions under the Kerala Building Tax Act when their dominant activity is religious, irrespective of residential use.
Buildings used principally for religious purposes qualify for tax exemption, regardless of the employment status of residents, provided the primary use aligns with religious activities.
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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Assessments under local tax statutes require proper adjudication, especially regarding claims for exemptions based on charitable use.
The classification of residential buildings for tax exemption purposes must be based on the factual nature of use, requiring thorough evaluation to determine if it qualifies as charitable under the l....
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