The absence of evidence for manufacturing activity in a building justifies the rejection of a claim for exemption from building tax under the Kerala Building Tax Act.

JUDGMENT :

(Bechu Kurian Thomas, J.)

Petitioner challenges Ext.P14 order, rejecting the claim for exemption from building tax.

2. Petitioner claims to be the Managing Partner of an establishment by name M/s.Spinner Marketing as well as the Managing Director of a company by name M/s.Spinner Plastic Industries Limited. It is alleged that both the aforesaid establishments are engaged in the manufacturing of various products of rubber and plastics in the name and style as “Spinner”.

3. Pursuant to a building permit bearing No.PW1-BA(312354)/2019, petitioner constructed a three storied building which was granted occupancy certificate on 01.07.2021. In the meantime, petitioner was issued with a notice to submit returns under Section 7(1) of the Kerala Building Tax Act, 1975 [for brevity, ‘the Act’], as per Ext.P3. On the basis of the said notice, petitioner filed Ext.P4, claiming exemption from building tax under Section 3(1)(b) of the Act, stating that the building is principally used as a factory for manufacturing and processing. Without considering the claim for exemption, the 4th respondent assessed the petitioner’s building to tax as per Ext.P11.

4. Since the claim for exemption was not referred to the Government, petitioner approached this Court and in W.P.(C)No. 25357/2022. By judgment dated 08.08.2022 this Court set aside the assessment and directed the 4th respondent to reconsider the matter on the basis of the claim for exemption. Thereafter, the 4th respondent referred the case to the Government for consideration on the claim for exemption. By Ext.P14 order dated 15.10.2024, the Government rejected the claim for exemption against which this writ petition has been preferred.

5. Sri.Shoby K.Francis, the learned counsel for the petitioner, submitted that the building of the petitioner is a factory entitled for exemption under Section 3(1)(b) of the Act. It was also submitted that petitioner’s building is a factory as defined under Section 2(m) of the Factories Act, 1948 as it is manufacturing various products like UPVC pipes, HDPE pipes, soft UPVC pipes, rain water cutter, water tanks, water barrels, LDPE pipes, exhaust fan pipes, fabricated bends, power transmission equipments etc., which aspect was not even considered by the Government while rejecting its claim for exemption.

6. Smt.Jasmine M.M., the learned Government Pleader, on the other hand, submitted that the building constructed by the petitioner is a three storied structure with a cellar portion. It was also submitted that on inspection by the Tahsildar, it was found that there was no manufacturing unit in existence while the building was used as a showroom and as a stockyard. It was also submitted that petitioner had not produced any documents to show that the building or any part of it can be regarded as a factory.

7. On a consideration of the rival contentions and on a perusal of Ext.P14, I am of the view that the petitioner’s claim for exemption was rightly rejected by the Government. In the impugned order Ext.P14, it is specifically mentioned that there was nothing to indicate that any manufacturing activity was being carried out in the building in question. The report of the Tahsildar referred to in the impugned order specifically stated that the ground floor of the building is being used as a showroom while the cellar portion is used as a stockyard of cement, water tank, PVC pipes and other electrical goods. The impugned order further stated that the inspection revealed that no machinery of any nature which could be used for any manufacturing purpose was found in the building.

8. Even in this writ petition, no documents have been produced by the petitioner to indicate that the building in question can be regarded as a factory. Petitioner has not obtained any registration under the Factories Act. A photocopy of a muster roll has been produced as Ext.P15, which also indicates that none of the employees allegedly engaged by the petitioner are engaged in any manufacturi