KITEX GARMENTS LTD., KIZHAKKAMBALAM, ALWAYE Vs. STATE OF KERALA, REPRESENTED BY PRINCIPAL SECRETARY TO GOVERNMENT, TAXES(H)DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM

JUDGEMENT

(1.) The petitioner is aggrieved with Exhibit P8 order passed by the Government, on directions issued by this Court in Exhibit P5, after conducting an inspection through Tahsildar; the report of which is produced at Exhibit P7.

(2.) The petitioner was assessed under the Kerala Building Tax Act, 1975 [for brevity "Building Tax Act"]. The petitioner claimed that the entire building is to be exempted from payment of tax, as a factory, for reason of the same being used for ancillary activities of the factory; which are a mandate under The Factories Act, 1948 [for brevity "Factories Act"]. Earlier the petitioner, after the statutory remedies, had been before this Court [O.P. No.20032 of 1999], in which Exhibit 5 judgment was passed on 24.02009.

(3.) In Exhibit P5, this Court noticed that the petitioner was granted exemption as a factory only in respect of a part of the building. Certain other buildings allegedly used as canteen, toilets, shelter and washing room were not granted exemption as part of the factory on the ground that they do not form part of the factory. This Court specifically noticed the exemption granted under Sec. 3(1)(b) of the Building Tax Act and found that the exemption is for buildings which are principally used as a factory. Referring to Sections 42 to 48, of The Factories Act, it was found that any facility provided therein was a mandatory requirement for obtaining licence as a factory, the absence of which would invite penal proceedings against the petitioner. On an interpretation of the exemption granted under Sec. 3 of the Building Tax Act and the definition of "factory" read in conjunction with Sections 42 to 48 of the Factories Act, it was held that the buildings provided by the owner of a factory to satisfy the statutory requirements under Sections 42 to 48 would also be eligible for exemption under Sec. 3 of the Building Tax Act.