DM Education & Research Foundation v. State of Kerala & Department of Revenue, Government Secretariat, Thiruvananthapuram & The Tahasildar, Vyathiri, Wayand

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE A.K.JAYASANKARAN NAMBIAR** ## **&** **THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.** **WEDNESDAY, THE 2[ND] DAY OF AUGUST 2023/11TH SRAVANA, 1945** ## **W.A.NO.1274 OF 2023** **AGAINST THE ORDER DATED 14.6.2023 IN WP(C).NO.19320/2023 OF HIGH COURT OF KERALA** ## **APPELLANT/WRIT PETITIONER:** **1 DM EDUCATION & RESEARCH FOUNDATION, A CHARITABLE AND EDUCATIONAL TRUST HAVING ITS REGISTERED OFFICE AT NASEERA NAGAR, MEPPADI P.O. WAYANAD DISTRICT – 673577 REPRESENTED BY ITS AUTHORIZED SIGNATORY & LAW OFFICER, MR.ZALAZI KALLANGODAN, AGED 45 YEARS, S/O.MOIDEEN KALLANGODAN.** **BY ADV.SRI.P.MARTIN JOSE BY ADV.SRI.P.PRIJITH BY ADV.SRI.THOMAS P.KURUVILLA BY ADV.SRI.AJAY BEN JOSE BY ADV.SRI.MANJUNATH MENON BY ADV.SRI.R.GITHESH BY ADV.SRI.SACHIN JACOB AMBAT BY ADV.SMT.ANNA LINDA EDEN BY ADV.SRI.HARIKRISHNAN S. BY ADV.SRI.S.SREEKUMAR (SR.)** ## **RESPONDENTS/RESPONDENTS:** - **1 THE STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001** **2 THE SECRETARY, DEPARTMENT OF REVENUE, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM – 695 001.** **W.A.NO.1274/23 & WP.(C).NO.19320/23 :: 2 ::** **3 THE TAHASILDAR VYTHIRI, WAYANAD, PIN – 673 576.** **BY SMT.M.M.JASMINE, GOVT. PLEADER** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02.08.2023 ALONG WITH WP(C).NO.19320/2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **W.A.NO.1274/23 & WP.(C).NO.19320/23 :: 3 ::** ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE A.K.JAYASANKARAN NAMBIAR** ## **&** **THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.** **WEDNESDAY, THE 2[ND] DAY OF AUGUST 2023/11TH SRAVANA, 1945** **W.P(C).NO.19320 OF 2023** ## **PETITIONER:** **DM EDUCATION & RESEARCH FOUNDATION, A CHARITABLE AND EDUCATIONAL TRUST HAVING ITS REGISTERED OFFICE AT NASEERA NAGAR, MEPPADI P.O. WAYANAD DISTRICT – 673577 REPRESENTED BY ITS AUTHORIZED SIGNATORY & LAW OFFICER, MR.ZALAZI KALLANGODAN, AGED 45 YEARS, S/O.MOIDEEN KALLANGODAN.** **BY ADV.SRI.P.MARTIN JOSE BY ADV.SRI.P.PRIJITH BY ADV.SRI.THOMAS P.KURUVILLA BY ADV.SRI.AJAY BEN JOSE BY ADV.SRI.MANJUNATH MENON BY ADV.SRI.R.GITHESH BY ADV.SRI.SACHIN JACOB AMBAT BY ADV.SMT.ANNA LINDA EDEN BY ADV.SRI.HARIKRISHNAN S. BY ADV.SRI.S.SREEKUMAR (SR.)** ## **RESPONDENTS:** **1 THE STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695001** - **2 THE SECRETARY,** **W.A.NO.1274/23 & WP.(C).NO.19320/23 :: 4 ::** ## **DEPARTMENT OF REVENUE, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695001** **3 THE TAHASILDAR, VYTHIRI, WAYANAD, PIN – 673576** **BY SMT.M.M.JASMINE, GOVT. PLEADER** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02.08.2023 ALONG WITH W.A.NO.1274/2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **W.A.NO.1274/23 & WP.(C).NO.19320/23 :: 5 ::** ## **J U D G M E N T** ## **A.K. Jayasankaran Nambiar, J.** The writ appeal aforementioned has been preferred challenging the interim order dated 14.6.2023 passed in W.P. (C).No.19320/2023. It was while considering the legality of the interim order passed in the writ petition that we felt that in the nature of the relief that was sought in the writ petition, the writ petition and the writ appeal could be disposed by a common judgment. We therefore called for the writ petition to be posted before us, and we have heard the writ petitioner and the respondents in both the writ petition and the writ appeal. 2. The writ petition was preferred impugning Exts.P6 to P9 orders passed by the respondents finding the writ petitioner liable to amounts by way of building tax in respect of some buildings constructed by it. While Ext.P7 is the order passed by the Government denying the benefit of exemption from building tax to some of the buildings constructed by the writ petitioner, Ext.P6 is **W.A.NO.1274/23 & WP.(C).NO.19320/23 :: 6 ::** the consequential order passed by the Tahsildar/Assessing Authority under the Kerala Building Tax Act and Ext.P9 is the recovery notice issued for recovery of the amounts quantified by the Tahsildar. Ext.P8 is the demand notice demanding luxury tax under the same enactment. Inasmuch as all the demands were consequent to Ext.P7 order that denied the benefit of exemption to some of the buildings constructed by the writ petitioner, the communications were impugned along with Ext.P7 in the writ petition. 3. The essential contention of the writ petitioner/appellant is that the Government had erred in considering the claim for exemption by taking the entire plinth area of all the buildings constructed by the petitioner and thereafter calculating the plinth area in respect of which the appellant satisfied the conditions for exemption as for charitable purpose, and demanding building tax on the plinth area pertaining to those spaces where the activity carried on by the petitioner did not come under charitable purpose as defined under the Kerala Building Tax Act, 1975. When the interim prayer for a stay of the demand covered by Exts.P6 to P9 was refused by the learned Single Judge through the interim order dated 14.6.2023, the writ petitioner/appellant preferred the Writ Appeal No.1274/2023 before us. **W.A.NO.1274/23 & WP.(C).NO.19320/23 :: 7 ::** 4. On a perusal of Ext.P7 order that is impugned in the writ petition, we find that the Government, while considering the claim for exemption in terms of Section 3(2) of the Kerala Building Tax Act, did not really consider the issue of exemption in the correct legal perspective. What the Government appears to have done, while considering the claim for exemption, is to calculate the total plinth area covered by all the buildings in question, and then reckoned the plinth area pertaining to the areas where the petitioner was engaged in charitable purpose and excluded the same while reckoning the balance area for the levy of building tax. In our view, the Scheme of the Kerala Building Tax Act clearly envisages that the exemption is to a building, which is principally used _inter alia_ for religious, charitable or educational purposes. The scope and ambit of the terms 'principally used for religious, charitable or educational purposes' has been clearly delineated by the Supreme Court through its judgment in **Government of Kerala and Another v. Mother Superior Adoration Convent - [2021 (2) KHC 188 (SC)]** and through the judgment dated 9.2.2023 in Civil Appeal No.6799/2017 **[M/s.Lisie Medical Institutions v. The State of Kerala and Ors.]** . It is clear from a reading of the said judgments that the consideration for exemption has to be in respect **W.A.NO.1274/23 & WP.(C).NO.19320/23 :: 8 ::** to a building as a unit and not with regard to the plinth area of a building. In other words, the test to be applied is whether each building is principally used _inter alia_ for religious, charitable or educational purposes, and while determining so, the provisions of Explanation 1 which clarifies the ambit and scope of charitable purpose has also to be looked into. The result of this exercise would be that depending upon whether or not a building is used principally for _inter alia_ religious, charitable or educational purposes, the building as a whole would qualify for the exemption or otherwise. The Kerala Building Tax Act does not envisage a situation where a part of the building alone qualifies for exemption whereas the remaining part does not. The exemption is to a building, specifically as a unit, although there may be situations where a part of the building also qualifies to be a building within the meaning of the expression under the Kerala Building Tax Act and Rules. 5. We find from a perusal of Ext.P7 order that is impugned in the writ petition that the exercise of the Government while adjudicating on the claim for exemption by the petitioner has not been on the lines indicated above. We therefore deem it necessary to quash Ext.P7 order impugned in the writ petition, as also Exts.P6, P8 and P9 orders/communication that are incidental thereto, and **W.A.NO.1274/23 & WP.(C).NO.19320/23 :: 9 ::** remit the matter back to the Government for a fresh adjudication of the claim for exemption preferred by the writ petitioner under the Kerala Building Tax Act in the light of the principles stated in the judgments of the Supreme Court referred above as also the judgment of this Court in **Lisie Medical Institutions v. State of Kerala - [2023 (4) KLT 432]** . Thus, we allow both the writ appeal and the writ petition, and direct the Government to pass fresh orders in the matter taking note of the observations above, within a period of two months from the date of receipt of a copy of this judgment after hearing the writ petitioner as well. The Writ Appeal and Writ Petition are allowed. **Sd/A.K.JAYASANKARAN NAMBIAR JUDGE** **Sd/MOHAMMED NIAS C.P. JUDGE** **prp/** **W.A.NO.1274/23 & WP.(C).NO.19320/23 :: 10 ::** ## **APPENDIX OF W.P(C).NO.19320/2023** ## **PETITIONER'S EXHIBITS:** **Exhibit P1 TRUE COPY OF DOCUMENT NO.214 OF 2010 OF KOZHIKODE SUB REGISTRY DATED 04.08.2010 Exhibit P2 TRUE COPY OF EXEMPTION LETTER UNDER SECTION 80(G)(5) OF THE INCOME TAX ACT, 1961 ISSUED BY THE INCOME TAX DEPARTMENT, GOVERNMENT OF INDIA** **Exhibit P3 TRUE COPY OF JUDGMENT DATED 30-01-2019 IN WP(C) NO:2836 OF 2019 OF THIS HON'BLE COURT Exhibit P4 TRUE COPY OF ORDER NO:C2-14309/17 DATED 10-6-2019 OF THE 3RD RESPONDENT Exhibit P5 TRUE COPY OF JUDGMENT DATED 01-03-2021 IN WA NO:319 OF 2021 OF THIS HON'BLE COURT Exhibit P6 TRUE COPY OF ORDER DATED 27-4-2023 ISSUED BY THE 3RD RESPONDENT Exhibit P7 TRUE COPY OF GO(RT.) NO:686/2023/RD DATED 10-2-2023 ISSUED BY THE 2ND RESPONDENT Exhibit P8 TRUE COPY OF PROCEEDINGS OF THE 3RD RESPONDENT DATED 29-4-2023 Exhibit P9 TRUE COPY OF ORDER UNDER FORM V [RULE 9(1)] ISSUED BY 3RD RESPONDENT DATED 29-04-2023 Exhibit P10 TRUE COPY OF RELEVANT PORTIONS OF THE AUDITED BALANCE SHEETS OF THE PETITIONER FOR THE FINANCIAL YEAR 2018-2019 Exhibit11 TRUE COPY OF RELEVANT PORTIONS OF THE** ## **W.A.NO.1274/23 & WP.(C).NO.19320/23 :: 11 ::** **AUDITED BALANCE SHEETS OF THE PETITIONER FOR THE FINANCIAL YEAR 2019-2020** ## **Exhibit P12** **TRUE COPY OF RELEVANT PORTIONS OF THE AUDITED BALANCE SHEETS OF THE PETITIONER FOR THE FINANCIAL YEAR 2020-2021** **Exhibit P13** **TRUE COPY OF RELEVANT PORTIONS OF THE "MINIMUM REQUIREMENTS FOR ANNUAL M.B.B.S. ADMISSIONS REGULATIONS, 2020" ISSUED BY THE NATIONAL MEDICAL COMMISSION** ## **RESPONDENTS EXHIBITS: NIL.** **//TRUE COPY//** **P.S. TO JUDGE**