MEDICAL TRUST HOSPITAL Vs. STATE OF KERALA

JUDGEMENT

(1.) The petitioner is a limited company running a hospital by name, Medical Trust Hospital, at Ernakulam. The Tahsildar issued notice to the petitioner proposing building tax assessment on the hospital building vide notice Ext. P1 dated 16.4.1999. The petitioner filed a detailed reply claiming exemption from building tax in respect of the hospital - building on the ground that the building is principally used for charitable purposes and hence exempt from building tax under S.3(1)(b) of the Kerala Building Tax Act, 1975, hereinafter called the "Act". Since the question of exemption was raised by the petitioner, the Tahsildar referred the matter to the Government for decision under S.3(2) of the Act. The Government after hearing the petitioner's objections issued Ext. P4 order whereunder building tax exemption claimed by the petitioner in respect of the hospital building was rejected for the reason that the petitioner was not rendering "free medical relief " but was charging fees and remuneration for treatment and services rendered in the hospital. Pursuant to Ext. P4 order of the Government, the Tahsildar issued building tax assessment and demand notice in Form Nos. V and VI of the Building Tax Rules respectively, produced in the WP as Exts.P5 and P6 respectively. The petitioner is challenging Ext. P4 order of the Government denying building tax exemption for the hospital building and the consequent orders of assessment and demand of building tax by the Tahsildar.

(2.) I heard Shri M.P. Abraham, counsel appearing for the petitioner and Shri Sojan James, Government Pleader appearing for the respondents.

(3.) The main argument of the petitioner is that the petitioner is a charitable institution entitled to exemption in respect of the hospital building under S.3(1)(b) of the Act and the Government order declining exemption is illegal and arbitrary. In support of the petitioner's claim for exemption, the petitioner has produced a Division Bench judgment of this Court in ITR 6 and 7 of 1992 confirmed by Ext. P7 order of the Supreme Court dismissing of SLPs filed against the said judgment whereunder the income tax exemption claimed by the petitioner - company for the assessment years 1981-82 and 1982-83 stands allowed. Government Pleader Shri Sojan James, submitted that the decision referred to by the petitioner under the Income Tax Act has no relevance and according to him the exemption from building tax is available under S.3(1)(b) of the Act only if the building is "principally used for charitable purposes". According to him, the Explanation to the Section makes it clear that so far as charity in the form of medical relief is concerned, in order to qualify for exemption, "medical relief should be rendered "free" of cost and not on chargeable basis. In support of his contention, the Government Pleader has referred to the decision of the Supreme Court in Municipal Corporation of Delhi v. Children Book Trust, AIR 1992 SC 1456 , whereunder the Supreme