IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN TUESDAY, THE 9TH AUGUST 2011 / 18TH SRAVANA 1933 WA.No. 2415 of 2008() --------------------- AGAINST THE JUDGEMENT IN WPC.16423/2008 Dated 24/11/2008 .................... APPELLANT/PETITIONER: -------------- JUBILEE MISSION MEDICAL COLLEGE AND RESEARCH INSTITUTE,THRISSUR,REPRESENTED BY ITS DIRECTOR. BY ADV. SMT.JULIAN XAVIER RESPONDENTS/RESPONDENTS: --------------- 1. GOVERNMENT OF KERALA REPRESENTED BY ITS SECRETARY TO GOVERNMENT REVENUE (SPECIAL CELL) SECRETARIAT, THIRUVANANTHAPURAM. 2. THE DISTRICT COLLECTOR THRISSUR. 3. THE TAHSILDAR THRISSUR. G.P. SRI.MOHAMMED RAFEEQ FOR R1-3 THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 09/08/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.R. C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. .................................................................... Writ Appeal No.2415 of 2008 .................................................................... Dated this the 9th day of August, 2011. JUDGMENT Ramachandran Nair, J. Appellant is a Medical College which claimed building tax exemption in respect of buildings used as hostel for students and hospital for treatment of patients. Learned Single Judge relying on Division Bench judgment of this court in ADMINISTRATOR, JOSGIRI HOSPITAL, THALASSERRY Vs. GOVERNMENT OF KERALA & ANOTHER reported in 2008(3) KHC 612 held that the hospital building does not qualify for exemption from building tax under Section 3(b) of the Kerala Building Tax Act. However, the appellant's counsel relying on Full Bench judgment of this court in UNITY HOSPITAL (P) LTD. Vs. STATE OF KERALA reported in 2011(1) KLT 236 contended that the decision relied on by the learned Single Judge stands reversed by virtue of Full Bench judgment and appellant is entitled to exemption for the hostel building. The Full W.A. 2415/2008 2 Bench while considering scope of exemption on buildings used for educational purposes held that students' hostel attached to educational institutions are not run for commercial purposes but are essentially to provide accommodation to students near the educational institution. The Full Bench held that educational purpose has a wider meaning and, therefore, buildings used by educational institutions for accommodation of students qualify for exemption. Following the said Full Bench judgment we partially allow the Writ Appeal by reversing the judgment of the learned Single Judge to the extent of declining building tax exemption on hostel buildings. Consequently we direct the Tahsildar to identify the buildings used as hostel for students and grant exemption to such buildings. 2. The second contention raised by the appellant is with regard to claim of exemption for the building in which hospital is run. Even though counsel has relied on Division Bench judgment of this court in SACRED HEART HOSPITAL Vs. SECRETARY TO GOVERNMENT reported in 2011(2) KLT 15, what we notice is that the Division Bench while deciding the case has not taken into account earlier Full Bench judgment referred above wherein exemption to hospital building was also specifically dealt with by the Full Bench. W.A. 2415/2008 3 The Full Bench examined the scope of Section 3(1)(b) of the Act and held that medical relief as a charity incorporated in the Act through an inclusive definition is only free medical relief. So much so, the Full Bench held that in order to qualify a hospital building for exemption, medical relief for the patients treated in the hospital should be rendered free of cost. In other words where the hospital is run on chargeable basis, the building does not qualify for exemption under the head "charity" in relation to medical relief which as conceived in the statute is free medical relief. So much so, going by the Full Bench judgment appellant is not entitled to exemption for the hospital building because patients treated in the hospital are charged for the medical service rendered. 3. Counsel for the appellant raised an alternate contention that under the Medical Council Regulations in order to get approval from the Medical Council for starting Medical College, the college should have a hospital attached to it with the prescribed number of inpatient capacity. So much so, the contention raised by counsel is that the hospital attached to Medical College should also be treated as a building used for educational purpose. According to counsel, going by the very same reason applied by the Full Bench in the above referred W.A. 2415/2008 4 decision granting exemption to hostel buildings where students are given accommodation on chargeable basis, the hospital building attached to the Medical College should also be granted exemption as it also caters to the educational needs of the medical students. Government Pleader opposed the claim of the appellant by contending that practical training to medical students is only an incidental activity in the hospital where the essential activity is rendering medical service. According to Government Pleader, hospital building is granted exemption under the Act only when medical relief is rendered free of cost. We are unable to accept the contention of counsel for the appellant because exemption to a building has to be considered with reference to the principal use of the building. Unless the building is principally used for the purpose for which exemption is provided, building tax exemption is not available. No one can dispute that the principal use of the hospital building is for rendering medical aid to patients, no matter in the course of the same medical students attached as apprentices with the doctors treating the patients get trained. Therefore, the principal use of the hospital building being rendering medical relief to the patients, the category under which exemption has to be considered even to the hospital building attached to Medical W.A. 2415/2008 5 College is charitable purpose. The Full Bench has explained in the judgment above referred that medical relief constitutes charity within the meaning contained in Explanation to Section 3(1)(b) only when it is rendered free of cost. So much so, in our view, exemption from building tax can be granted to a hospital building only when medical relief is granted in the hospital free of cost. Admittedly the appellant's hospital is not rendering free medical relief to the patients treated in the hospital. So much so, exemption was rightly declined by the statutory authorities and upheld by the learned Single Judge. We, therefore dismiss the Writ Appeal on this issue. In the result, Writ Appeal is allowed in part by modifying the judgment of the learned Single Judge to the extent stated above. Sd/- C.N.RAMACHANDRAN NAIR Judge Sd/- P.S.GOPINATHAN Judge True copy P.S. to Judge pms