PodikunjU Musaliyar Memorial Charitable & Educational Trust v. State of Kerala and Others

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **&** **THE HONOURABLE MR. JUSTICE ASHOK MENON** **TUESDAY ,THE 04TH DAY OF SEPTEMBER 2018 / 13TH BHADRA, 1940** **WA.No. 1693 of 2016** **AGAINST THE ORDER/JUDGMENT IN WPC 10964/2013 of HIGH COURT OF KERALA DATED 14-06-2016** ## **APPELLANT/S:/4TH RESPONDENT** **PODIKUNJU MUSALIYAR MEMORIAL CHARITABLE & EDUCATIONAL TRUST** **AZEEZIA INSTITUTE OF MEDICAL SCIENCES & RESEARCH,CHANDANATHOPE,KOLLAM-691104,REPRESENTED BY THE CHAIRMAN AND AUTHORISED SIGNATORY MR.ABDUL AZEEZ.** **BY ADV. SRI.E.K.NANDAKUMAR (SR.)** **SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH MENON SRI.BENNY P.THOMAS SRI.JOHN MATHAI K SRI.JOSON MANAVALAN SRI.KURYAN THOMAS** ## **RESPONDENT/S:/RESPONDENTS** - **1 STATE OF KERALA REPRESENTED BY SECRETARY,DEPARTMENT OF REVENUE,SECRETARIAT,THIRUVANANTHAPURAM-695001.** - **2 THE TAHSILDAR KOLLAM,PIN-691001.** - **3 THE VILLAGE OFFICER PALLIMON,KOLLAM,PIN-691001.** **BY ADV. P . RAVEENDRANATH, SPL.GOVERNMENT PLEADER** **THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 04.09.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WA 1693/2016 -2- ## J U D G M E N T Ashok Menon, J. The question involved in this Writ Appeal is no longer res integra. The appellant/writ petitioner runs a Medical College, a Dental College and a Nursing College and seeks exemption from payment of building tax under the Kerala Building Tax Act, 1975 ('Act' for short) relying on the provision of Section 3(1) of the Act claiming that the buildings for which exemption is sought, are used principally for charitable or educational purposes. 2. The thrust of the argument advanced by the learned counsel appearing for the writ petitioner in the appeal is that the hospital run by the appellant/ petitioner-Trust is as per the mandate of the Medical Council of India (MCI) required for establishing and running a Medical College. This hospital attached to the Medical College would, for the purpose of the statutory provisions, come under the purview of "charitable purposes" and is also used for "educational purposes" is the argument. The Government rejected the exemption claimed WA 1693/2016 -3- by the petitioner-Trust as per Ext.P2 order dated 1.3.2013 and hence the petitioner challenged the order by filing the Writ Petition. The learned Single Judge relying on the decision of a Full Bench of this Court in 2015(1) KLT 815 (FB) [Alphonsa Hospital v. State of Kerala] which relied on a decision of the Honourable Supreme Court in 2014(1) KLT 316 (SC) [S.H.Medical Centre Hospital v. State of Kerala], and also considering the views taken by the Division Bench of this Court in 2011(4) KLT 104 [St.Sebastins Visitation Hospital v. State of Kerala] which was after considering the decision in 2011(1) KLT 236 [Unity Hospital v. State of Kerala], held that the petitioner's hospital buildings and other structures cannot be exempted from payment of building tax and refused to interfere with the impugned Ext.P2 order of the Government denying the exemption. 3. The Writ Petitioner is aggrieved with the same and is before us insisting that the appellant/petitioner is a charitable trust formed primarily with the object of establishing and maintaining educational institutions, developing and WA 1693/2016 -4- maintaining hospitals, medical and dental colleges, nursing institutions, dispensaries and other similar institutions in State of Kerala and other parts of the Country and that permission was granted by the Medical Council of India (MCI) for conducting MBBS course in the year 2008 pursuant to which a medical college was established affiliated to the University of Kerala. Similarly, Dental College was established in 2005 and a Nursing College in 2006. It is submitted that the MCI as well as the Dental Council of India (DCI) and the Nursing Council of India (NCI) have all prescribed the necessary infrastructure to be maintained by educational institutions for conducting courses recognized by them. Accordingly, buildings were constructed for the Medical College Academic Blocks, Hospital Building Blocks, hostel for boys and girls undergoing MBBS, BDS as well as Nursing Courses, apart from residential quarters for Doctors, canteen facility, nursing college etc. in the 50 acre campus and all these facilities were subjected to inspection by the authorities functioning under the MCI, DCI and NCI. It is submitted that the buildings and the WA 1693/2016 -5- infrastructure as mentioned above are essentially for the purpose of running educational institutions and hence the buildings are primarily used for educational purposes and the hospital is also used for educational purposes. It is urged by the learned counsel for the appellant that the learned Single Judge had not taken into account the fact that exemption sought for by the appellant was on the ground that the buildings are used primarily for educational purposes and not for charitable purposes. Providing charity is one of the objects of the Trust and therefore the dismissal of the prayer by the learned Single Judge relying on the decision in Alphonsa Hospital (supra) was on a wrong footing. The decision does not relate to claim of exemption on the ground that the building is used primarily for educational purposes and therefore, requests that the impugned judgment of the learned Single Judge be set aside and the Writ Appeal allowed. 4. It is pertinent to note that a very similar matter had come up before a Division Bench of this Court in 2017(1) KLT 679 [Clarist Medical Trust of the S.H. Province v. Secretary to Government] which was WA 1693/2016 -6- regarding the infrastructure required for a nursing school and the Division Bench held thus:- “9. We see that these submissions have its predication in Regulation No.21 of Ext.P8 Regulations issued by the Indian Nursing Council. We see that what is stated therein is that a School of Nursing should have a parent/affiliated hospital with a particular annual intake as an essential clinical facility for the college. However, it does not say in any manner that every Nursing College or School of Nursing should have a hospital attached to it as an adjunct institution. What is meant by this Regulation is that the School or College of Nursing should be affiliated to a hospital which could be part of the same management or of a separate management. If the hospital belongs to the same management, obviously, it could fall within the meaning of the word 'parent hospital' shown therein or otherwise, it would then be taken as an affiliated hospital. What is required, therefore, is only that the College or School of Nursing should have an affiliation with a hospital, answering the infrastructural requirements prescribed in the Regulations, so as to provide clinical facilities to the students. This does not, however, in any manner go to mean that every School or College of Nursing should have a hospital working as a part of it. We are, therefore, unable to countenance the submissions made by the learned counsel for the appellants.” 5. In view of the settled position in the above cited decision, apart from those relied upon by the learned Single Judge, we are of the considered view WA 1693/2016 -7- that there is no indication in the instant case that the hospital is being used solely or principally for the purpose of providing education. The hospital building would definitely not come within the purview of exemption under Section 3(1). No interference whatsoever is found necessary in this matter insofar as the hospital building is concerned. 6. However, on the question of exemption to hostel buildings, the Division Bench of this court has while considering an identical claim in Unity Hospital (supra) held thus : “We, therefore, feel accommodation is a necessary facility, which an educational institution is required to provide to its students; and so long as the purpose of stay of students in the hostel is to study in the educational institution, the purpose of such building, which is used for accommodation of students, qualifies as educational purpose.” 7. In Ext.P2, it is stated that the decision of the Kerala High Court in Unity Hospital (supra) stands challenged by the Government before the Supreme Court, and that the claim for exemption to hostel building can considered later subject to the decision of the Supreme Court. There is no stay granted by the Supreme Court WA 1693/2016 -8- and hence there is no justification in denying the exemption to hostel buildings. The hostel buildings shall be entitled for exemption for the present under Section 3(1) of the Act, subject however to the decision of the Honourable Supreme Court in the appeal against the Division Bench judgment. If the Apex Court overturns the decision of this Court, then necesarily the appellant would be liable to that extent also. The Writ Appeal is allowed in part. No costs **Sd/-** **K.VINOD CHANDRAN** **JUDGE** **Sd/-** **ASHOK MENON JUDGE** jg