IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH FRIDAY, THE 31ST OCTOBER 2008 / 9TH KARTHIKA 1930 WP(C).No. 31961 of 2008(E) -------------------------- PETITIONER(S): --------------- P.HAMSA KUTY HAJI, PRESIDENT, BADAKARA JUMA ATH PALLE DARUS COMMITTEE, VATAKARA, KOZHIKODE. BY ADV. SRI.C.P.MOHAMMED NIAS SMT.M.LISHA RESPONDENT(S): --------------- 1. STATE OF KERALA, REPRESENTED BY ITS SECRETARY, DEPART OF REVENUE, (SLMC) DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM. 2. REVENUE DIVISIONAL OFFICER, KOZHIKODE. 3. TAHASILDAR, KOZHIKODE. GOVERNMENT PLEADER SRI. BEJOY CHANDRAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 31/10/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.M.JOSEPH, J. - - - - - - - - - - - - - - - - - - - - - - - - - WP.(C) No.31961 of 2008 - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 31st day of October, 2008 JUDGMENT Petitioner challenges Ext.P8. Ext.P8 is an order passed in the purported exercise of jurisdiction under Section 37 of the Kerala Building Tax Act. Petitioner took up the contention that petitioner is entitled to exemption under the Building Tax Act as the building is used for charitable purpose. This contention of the petitioner came to be rejected by Ext.P8. In arriving at the conclusion that there is no merit in the contention of the petitioner, it is stated as follows: “Government have examined the matter in detail. A chance was given to the party for personal hearing on 13.8.2007. At the time of the hearing the assessee had stated that the building in question is a double-storied one. Ground floor is used as shop rooms. A godown and Post Office are also functioning in the ground floor. Auditorium is used for renting out to marriages, reception, meetings and religious discourses. The income generated from the rent is being utilized for conducting orphanage, women's college etc. As per the report of the Tahsildar, Vadakara read as 2nd paper above the building constructed in Re-survey No.79/2 of Vadakara Desom, Vadakara Village is a commercial building which earns a big amount by way of rent from shop rooms and WPC.31961/2008. 2 auditorium. He has further reported that the building is a three storied one. The ground floor is having shop rooms given on rent in which shops are functioning in 2 rooms and a post office is functioning in another room. First and second floors are used as auditorium on rent basis. The assessee has not produced any documentary evidences in support of the claims that the income from rent is used for charitable purposes. Section 3(1)(b) of the Kerala Building Tax Act, 1975 provides that buildings used principally for religious, charitable or educational purposes or as Factory or Workshop can be exempted from building tax. In the instant case, it is reported that the building is used for commercial purpose and no charitable activity is carried out there. Exemption under Section 3(1)(b) of the Kerala Building Tax Act, 1975 is granted on the basis of the use of the building and not on the basis of its ownership.” 2. Section 3 reads as follows: “3. Explanation.- (1) Nothing in this Act shall apply to - (a) buildings owned by the Government of Kerala or the Government of India or any local authority; and (b) buildings used principally for religious, charitable or educational purposes or as factories or workshops.” 3. Going by the use to which the building is put, as found by the Government, it is quite clear that it cannot be charactarised as a use which comes under Section 3(b) of the Act. This view is supported by the WPC.31961/2008. 3 judgment of this court in Medical Trust Hospital v. State of Kerala (2004(2) K.L.T. 139). 4. Sri. C.P.Mohammed Nias, learned counsel appearing for the petitioner however would contend that the earlier decisions of this court are to be considered in the light of the decision of the Apex Court in Municipal Corporation of Delhi v. Children Book Trust (AIR 1992 SC 1456). Section 115 of the Delhi Municipal Corporation Act (66 of 1957) provided for levying of property tax in respect of land and building. However, exception was carved out in favour of the building used for charitable purpose. In the context of the said provision, the court made certain observations which related to the user of the income. It is however important to consider the exact statutory provision, which fell for consideration. In so far as they are relevant they read as follows: “(4) Save as otherwise provided in this Act, the general tax shall be levied in respect of all lands and buildings in Delhi except - (a) lands and buildings or portions of lands and buildings exclusively occupied and used for public worship or by a society or body for a charitable purpose: Provided that such society or body is supported wholly or in part by voluntary contributions, applies its profits, if any, WPC.31961/2008. 4 or other income promoting its objects and does not pay any dividend or bonus to its members.” 5. In the context of the said provision it is that the court apparently made those observations. It is the terms of the proviso which apparently was the focus of the court in making the said observations. An inquiry regarding the employment of the income by the owner of the building, in my view, is irrelevant and foreign to the question as to whether the building is used for a charitable purpose under Section 3(b) of the Kerala Building Tax Act, 1975. What is important is the use to which the building is put and not what is done with the income that may be derived from the user of the building. In such circumstances, I see no merit in the writ petition. The writ petition is dismissed. (K.M. JOSEPH, JUDGE) sb