IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN FRIDAY, THE 11TH NOVEMBER 2011 / 20TH KARTHIKA 1933 WP(C).No. 14096 of 2007(C) -------------------------------------- PETITIONER(S): ---------------------- MORNING STAR MEDICAL CENTRE, NAZARETH MEDICAL SOCIETY, ADIMALY, IDUKKI DISTRICT REPRESENTED BY ITS DIRECTOR, SR.AQUINA. BY ADVS. SRI.V.M.KURIAN SRI.MATHEW B. KURIAN SRI.K.T.THOMAS RESPONDENT(S): ------------------------- 1. THE GOVERNMENT OF KERALA, SECRETARY TO GOVERNMENT, REVENUE(SPECIAL CELL), DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM. 2. THE TAHSILDAR, DEVIKULAM TALUK, DEVIKULAM, IDUKKI DISTRICT. R1 & R2 BY GOVT.PLEADER SRI.NOBLE MATHEW THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11/11/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: AV WPC.NO.14096/2007 APPENDIX PETITIONER'S EXHIBITS : P1 : COPY OF MEMORANDUM OF ASSOCIATION DATED 17.02.1985. P1(a) : COPY OF THE REGISTRATION CERTIFICATE DATED 17.04.1985 ISSUED BY THE REGISTRAR OF SOCIETIES. P2 : COPY OF CERTIFICATE ISSUED BY ADDITIONAL DISTRICT MAGISTRATE, COLLECTORATE, ERNAKULAM DATED 18.02.87. P2(a) : COPY OF THE CERTIFICATE DATED 19.10.1990 ISSUED BY THE SUB COLLECTOR, IDUKKI. P2(b) : COPY OF THE CERTIFICATE DATED 19.05.1999 ISSUED BY THE ADDITIONAL DISTRICT MAGISTRATE, ERNAKULAM. P3 : COPY OF THE CERTIFICATE DATED 16.11.2000 ISSUED BY THE COMMISSIONER OF INCOME TAX, ERNAKULAM. P3(a) : COPY OF THE CERTIFICATE DATED 12.01.1993 ISSUED BY THE COMMISSIONER OF INCOME TAX, ERNAKULAM. P4 : COPY OF INCOME AND EXPENDITURE STATEMENT FOR THE YEAR ENDED 31.03.2003. P5 : COPY OF INCOME AND EXPENDITURE STATEMENT FOR THE YEAR ENDED 31.03.2004. P6 : COPY OF INCOME AND EXPENDITURE STATEMENT FOR THE YEAR ENDED 31.03.2005. P7 : COPY OF THE REPRESENTATION DATED 08.08.2002 SUBMITTED BY PETITIONER BEFORE 2ND RESPONDENT. P8 : COPY OF THE ORDER DATED 26.09.2006 PASSED BY GOVERNMENT. P9 : COPY OF REVIEW PETITION DATED 10.10.2006 FILED BY THE PETITIONER. P10 : COPY OF ORDER DATED 13.02.2007 PASSED BY THE 1ST RESPONDENT. P11 : COPY OF THE ORDER DATED 25.03.2004 PASSED BY THE 1ST RESPONDENT. RESPONDENT'S EXHIBITS : NIL /TRUE COPY/ P.A TO JUDGE AV S. SIRI JAGAN, J. ---------------------------------------- W.P.(C) No. 14096 OF 2007 ------------------------------------------ Dated this the 11th day of November, 2011. J U D G M E N T The petitioner claims to be a Charitable Institution run by religious Congregation of Sisters of Nazareth rendering free medical service. They are running a hospital where medical relief is stated to be given to the people in the high ranges of Idukki district charging nominal fees. In respect of certain buildings in which the hospital is housed, the petitioner claimed exemption from payment of building tax under Section 3(1) of the Kerala Building Tax Act. By Ext.P8 order, the Government rejected the claim on the ground that although the building is owned by a charitable institution, the building is not principally used for charitable purposes without which the building cannot be exempted from building tax. The petitioner filed a review petition before the Minister for Revenue, which was disposed of by the government by Ext.P10 order, confirming Ext.P8 order. The petitioner is challenging Ext.P8 and P10 orders in this writ petition. W.P.(C) No. 14096 OF 2007 2 2. I have considered the contentions of the parties. Ext. P8 order reads thus:- “In the petition read above, the Director, Morning Star Medical Centre, Adimali, Idukki has requested to exempt the other building owned by them in Manamkandom Village, Devikolam Taluk comprising of a plinth area of 545 M2 from payment of building tax under Section 3(1) (b) of Kerala Building Tax Act, 1975. The District Collector, Idukki in his letter read as second paper above, has reported that the Morning Star Medical Centre is running on profit basis and the treatment given in the hospital is not free and as such no charitable service are conducted in this institution, and the institution is not eligible for exemption from Building Tax. Government have examined the matter in detail; The party was given a statutory hearing on 23.6.2004. The representative attended the hearing agreed to submit sufficient documents to prove his claim on 04.8.2004. But did not appear for further hearing. The party appeared on behalf of the hospital claims that the hospital is a charitable institution doing philanthropic services and functions under a society viz, Nazareth Medical Society which is a registered charitable society. The society includes nuns who are devoted for the services of poor and destitute. Though the Income & Expenditure Statement were produced, the party could not provide any documentary evidence to establish the claim of charitable services. The income for the year ending 31.3.2003 is seen as Rs.15,42,310/-. It is evident that even though the building is owned by a charitable institution, the building is not principally used for charitable purposes. In the above circumstances, it is seen that the building owned by the Morning Star Medical Centre in Manamkandom Village, Adimali Taluk in Idukki district is not eligible for exemption under section 3(1)(b) of the Kerala Building Tax Act, 1975 and order accordingly”. 3. The fact that a building is owned by a charitable institution does not ipso facto make a building owned by that W.P.(C) No. 14096 OF 2007 3 institution eligible for exemption under Section 3(1) of the Kerala Building Tax Act. It should further be proved that the building in question is actually and principally used for charitable purpose by proving which alone exemption can be claimed under Section 3(1). This legal position has been made clear by a Division Bench of this Court, very recently in St. Sebastian's Visitation Hospital Vs. State of Kerala and others (2011(4) KHC, 7 (DB). 4. Therefore notwithstanding the fact that the petitioner is a charitable institution, for claiming exemption, the petitioner has to prove that the building owned by them is principally used for charitable purposes. On the evidence produced before the Government, government found that the petitioner has not proved that the building is principally used for charitable purposes. I do not think that I can interfere with the finding on a question of fact in a writ petition, unless the same is shown to be demonstrably perverse on the basis of materials on record. In this case from the materials on record, I am unable to find that the said finding of fact that the building in question is not principally used for charitable purpose is in W.P.(C) No. 14096 OF 2007 4 anyway perverse. Ext.P4 Balance Sheet for the year ended on 31.3.2003 shows that more than Rs.1,20,00,000/- has been collected from patients, whereas concession and charity is only Rs.2,35,954/- for the year ended on 31.3.2004, more than Rs.1 Crore has been collected from patients whereas charity and donation comes to onlyRs.2,44,704/-. Ext. P6 shows that for the year ended on 31.3.2005, almost Rs.1.47 Crores have been collected from patients. Figures for concession and charity is not mentioned therein. As such treatment in the hospital cannot be stated to be free. Even apart from the same, the petitioner has not produced any material to show that the building in question is actually and principally used for charitable purposes. 5. In the above circumstances, I do not find any infirmity in the impugned order. Accordingly, this writ petition is dismissed. S. SIRI JAGAN, JUDGE. Scl.