MEDICAL TRUST HOSPITAL Vs. STATE OF KERALA

JUDGEMENT

(1.) Medical Trust Hospital, M. G. Road, Ernakulam is the appellant before us. It is being run by M/s Pulikkal Medical Foundation Limited, a public company registered under the Company Act, 1956. It received a notice dated 16.4.1999 proposing assessment of building tax under the Kerala Building Tax Act, 1975 (hereinafter called 'the Act'). A detailed reply was filed claiming exemption from building tax in respect of the hospital building on the ground that the building was primarily used for charitable purpose and was, therefore, exempt from building tax under section 3(1)(b) of the Act. The Assessing Authority referred the matter to the Government for its decision under section 3(2) of the Act. It was urged before the State Government that the hospital was being run for charitable purpose and, therefore, in view of the judgment of this Court in (ITR Nos. 6 and 7 of 1992) which was affirmed by the Apex Court which dismissed the SLPs, it was exempt from the provisions of the Act. The Government examined the contentions raised by the appellant and came to the building the principal use of which is for charitable purpose. It found that the principal use of the building of the hospital was not for charitable purpose but the building was actually being for remunerative purpose and since the hospital authorities were charging fee for treatment and collecting room rent from the patients it could not be exempted under section 3(1) of the Act. The objections filed by the appellant were rejected by order dated 4.4.2003 and it was held that it was not entitled to exemption from payment of building tax under the Act. Feeling aggrieved by this order the appellant filed W. P. No. 15583 of 2003 in this Court which came up for hearing before a learned single Judge. On a consideration of the matter the learned single Judge upheld the order of the State Government to the extent that the appellant was not entitled to exemption under Section 3(1) of the Act but set aside the order f assessment on the ground that the appellant had not been afforded a proper opportunity of hearing and remanded the case to the assessing authority to pass a fresh order. It is against this order that the present appeal has been filed under Section 5 of the Kerala High Court Act.

(2.) We have heard the learned counsel for the appellant and gone through the records and are of the view that the appeal deserves to be dismissed.

(3.) The primary argument raised before the learned single Judge has been reiterated before us and it is urged that the appellant is a charitable institution entitled to exemption under Section 3(1) (b) of the Act and that the Government Order declining exemption is illegal and arbitrary. Reliance has also been placed on the Division Bench judgment of this Court in (ITR Nos. 6 and 7 of 1992). At this stage it would be necessary to refer to the provisions of section 3 of the Act under which exemption is claimed.