KITEX GARMENTS LTD Vs. STATE OF KERALA

JUDGEMENT

(1.) The petitioner is a company engaged in the business of manufacturing and exporting garments. For the purpose of its business, the petitioner maintains a factory under the Factories Act. According to the petitioner, the factory employs about 1000 workers of which about 750 are female workers. The petitioner's buildings were assessed to building tax under the Kerala Building Tax Act. The petitioner claimed exemption from tax on the ground that the buildings are principally used as a factory. The petitioner was granted exemption as factory only in respect of a part of the buildings. Certain other buildings allegedly used as canteen, toilets, shelter and washing room were not exempted as part of the factory on the ground that the same are not part of the factory buildings. The mater was referred to the Government as required under Sub-section (2) of Section 3, pursuant to which Ext. P4 order has been passed by the Government refusing exemption in respect of a building stated to be used as a hostel, which, according to the Government, was functioning on a commercial basis. The petitioner is challenging Ext. P4 order.

(2.) According to the petitioner, the particular buildings for which exemption has been denied are provided for washing facilities, facilities for sitting, canteens, shelters, rest rooms and launch rooms which are mandatorily required to be provided in a factory as per Sections 42 to 48 of the Factories Act. According to the petitioner, since as per the Kerala Building Tax Act, buildings used principally as factories are eligible for exemption, the buildings which are provided in the exemption provision, which cannot be separated from the factory itself.

(3.) The learned Government Pleader stoutly opposes the claim of the petitioner. According to him, exemption is granted in respect of factory. The term 'factory' is not defined in the Kerala Building Tax Act. Therefore, the definition in the Factories Act has to be adopted for this purpose also. Section 2(m) of the Factories Act defines 'factory' as a place where manufacturing process is being carried on. Therefore, as per the provisions of Section 3(1)(b), only those part of the buildings of the petitioner, where manufacturing process is being carried on, are eligible for exemption under the Act. The learned Government Pleader also points out that even apart from that, in the reply statement dated 12-3-1997 submitted by the petitioner themselves before the Tahsildar, it has been specifically stated that the building in question is a hostel building for accommodating their employees. The learned Government Pleader argues that there is no provision in the Factories Act, which requires the petitioner to provide accommodation for its employees and therefore the hostel building for accommodating the petitioner's employees is not eligible for exemption. He also relies on a Division Bench decision of this Court in Josegiri Hospital v. Government of Kerala 2008 (3) KLT 627, wherein this Court has held that hostel attached to a nursing college is not eligible for exemption as a building used for educational purpose, despite the sanction from the Indian Council, the college is mandatorily liable to provide accommodation for its students also.