LISIE MEDICAL INSTITUTIONS Vs. STATE OF KERALA

JUDGEMENT

(1.) The appellant, M/s. Lisie Medical Institutions is a trust formed under a Trust Deed dtd. 3/4/1990 to take over the management of Lisie Hospital, Ernakulam. The present appeal comes before us pursuant to a remand by the Supreme Court through its judgment dtd. 9/2/2023 in Civil Appeal No.6799 of 2017. The said judgment was rendered by a three Judge Bench to which the judgment of a two Judge bench in Lisie Medical Institutions v. State of Kerala,(2017) 14 SCC 533. was referred after doubting the correctness of an earlier two Judge bench decision of the Supreme Court in SH Medical Centre Hospital v. State of Kerala,(2014) 11 SCC 381. The brief facts necessary for a disposal of this appeal are as follows:

(2.) The appellant trust runs a hospital by the name of Lisie Hospital at Ernakulam. In respect of a building that was constructed by it in 2013, wherein it was providing medical treatment at concessional rates, it was served with a notice demanding building tax under the Kerala Building Tax Act (hereinafter referred to as "the Act" for brevity). As per Sec. 3(2) of the Act, whenever any question arises as to whether a building qualifies for exemption in terms of Sec. 3(1) of the Act, the said question has to be referred to the Government which is then obliged to decide the question after giving the interested parties an opportunity to present their case. Sec. 3(3) of the Act makes it clear that a decision of the Government on the question referred to it under Sec. 3(2) shall be final and shall not be called in question in any court of law.

(3.) On a reference made to the government at the instance of the appellant, the Government, by Ext.P9 order dtd. 17/3/2016, found that the building constructed by the appellant in 2013 would not qualify for the exemption contemplated under Sec. 3(1) of the Act for "buildings used principally for religious, charitable or educational purposes" when read with Explanation 1 to the said provision which clarified that for the purposes of Sec. 3(1) of the Act, "charitable purpose includes relief of the poor and free medical relief". The Government reasoned that the appellant was not providing medical relief free of cost and hence it did not satisfy the definition of charitable purpose under the exemption provision. The Government also examined the income-expense statement of the appellant's institution and found that the appellant expended only a nominal amount for charitable purposes and that insofar as the appellant's hospital was providing medical relief by collecting fees, it would not qualify for the exemption.