IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE ACTING CHIEF JUSTICE MR.J.B.KOSHY & THE HONOURABLE MR. JUSTICE V.GIRI FRIDAY, THE 23RD JANUARY 2009 / 3RD MAGHA 1930 WA.No. 719 of 2005(B) --------------------- AGAINST THE JUDGEMENT/ORDER IN OP.26552/2002 Dated 04/02/2005 .................... APPELLANT/ PETITIONER: ------------------------- SOCIAL WELFARE SOCIETY, THATHAMPALLY, ZILLA COURT WARD, ALLEEPY, REPRESENTED BY IT'S PRESIDENT. BY ADV. SMT.ELIZABETH MATHAI IDICULLA SRI.RACHEL JOSEPH SRI.MOHAN IDICULLA ABRAHAM MARTIN.D.ALUMKARA RESPONDENT / RESPONDENT: -------------------------- THE GOVERNMENT OF KERALA, REPRESENTED BY ITS CHIEF SECRETARY, GOVERNMENT SECRETARIAT, TRIVANDRUM. GOVERNMENT PLEADER SRI.MOHAMMED RAFIQ SPL. GOVERNMENT PLEADER (TAXES) SRI. JULIAN XAVIER THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 23/01/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J.B.KOSHY, Ag.CJ & V.GIRI, J. =========================== W.A.No.719 of 2005 - B =============================== Dated this the 23rd day of January, 2009. J U D G M E N T Koshy, Ag.CJ. Appellant/Petitioner is a registered society under the Travancore Cochin Literary Scientific and Charitable Societies Act, 1955. Society runs a hospital by name Sahrudaya Hospital, a day care school for mentally retarded children, a day care centre for aged people etc. Appellant/petitioner claimed exemption from building tax under Section 3(I)(b) of the Kerala Building Tax Act. According to the appellant, it is running on loss. The entire income generated from the hospital is used for charitable purposes. Sahruda hospital was started mainly for the poor people. There is a general ward attached to the hospital where poor people are admitted and treated freely. There are also pay wards for those who can pay for it. But, whatever income generated is used for charitable purpose and for treatment of the poor people. The society is also running a day care centre for aged people and mentally retarded children. No profit was W.A.No.719 of 2005 - B 2 earned from this. Balance sheet of the society was produced. Even though this Court directed the Government to consider, that was decided against the appellant. The appellant was also exempted from payment of building tax on that part of the building which is used for training centre where the mentally retarded children are situated. The learned Judge rejected the petition relying on the decision of Medical Trust Hospital v. State of Kerala (2004 (2) KLT 139). But in that case, there was no contention that the entire income earned was used for charitable purposes. But, Division Bench of this Court in State of Kerala v. St.Gregorious Medical Mission (1992 (1) KLT 230) held that if the income earned is used for charitable purposes, it will become a charitable institution. But, unlike the decision reported in St.Gregorious's case, there was no proof in the Medical Trust Hospital's case that the entire income was used for charitable purpose. The decision in St.Gregorious's case was finally approved by the Honourable Supreme Court. The learned Government Pleader submitted that before the Government, only balance sheet was produced to show that the society was running W.A.No.719 of 2005 - B 3 on loss. But, that is not enough. Appellant has to prove before the Government that the total income generated is used for charitable purposes. Therefore, we set aside the order and remand the matter for giving one more opportunity to prove the above contentions. Only after the fresh decision is taken by the Government, assessment if any, can be made. Writ appeal is allowed partly. J.B.KOSHY, ACTING CHIEF JUSTICE. V.GIRI, JUDGE. bkn/-