JACOB Vs. THASILDAR

JUDGEMENT

(1.) The petitioner is the Administrator of Cosmopolitan Hospital, Trivandrum. It is owned and run by a private limited company M/s. Cosmopolitan Hospitals Private Limited. The matter arises under the Kerala Building Tax Act. The petitioner has put up a building for the purpose of a hospital. Proceedings were initiated to assess the building under the Building Tax Act. The petitioner contended that the building is entitled to exemption from the levy of tax under the Kerala Building Tax Act, 1975. The proceedings had a chequered career. Finally, in O.P. No. 6950 of 1984, this Court directed the Government to give an opportunity to the petitioner and decide the claim for exemption pleaded by the petitioner afresh. In pursuance thereto, the Government of Kerala heard the matter afresh and passed an order dated 13-9-1988, evidenced by Ext. P7, holding that the petitioner is not eligible for exemption from the levy of tax under the Kerala Building Tax Act, 1975. The challenge is against Ext. P7 order.

(2.) I heard counsel for the petitioner. Mr. C. S. Balagangadharan. It was argued that the building in question, constructed by the company, is eligible for exemption under S.3(1)(b) read with Explanation of the Kerala Building Tax Act, 1975. S.3(1)(b) along with the Explanation of the Act provides as follows: '

(3.) The question as to whether the predominant object of the institution is a charitable one and the building in the instant case is used principally for charitable purposes, is largely one of fact. It should be stated that though the various sub clauses in Clause III. B of Ext. P1 are labelled as objects incidental or ancillary to the attainment of the main objects, they are really powers and not objects. There is a distinction between the objects of the institution and the powers of the trustees or the directors. A perusal of sub clauses (1) to (34) of Clause III. B in Ext. P1 would go to show that the various sub clauses are really in the nature of powers. We have to read the Memorandum of Association (Ext. P1) as a whole in order to understand the real objects for which the company has been constituted. So read, Clause III. B and the various sub clauses therein are only powers and not the real objects for which the petitioner -Company had been constituted. The following observations of a Division Bench of this court in C. I. T. v. Shri Shaila Industrial and Spiritual Colony Charities ( 1973 (87) ITR 175 ) at page 182 are apposite, in this context: