Kerala Building Tax Exemption Can Be Given To Buildings Providing Free Accommodation To Aged & Disabled Persons Who Rendered Services To Charitable & Religious Institutions: Kerala High Court

The Petitioner Church challenged an order passed by the Government by which the exemption sought by the petitioner from payment of building tax under Section 3(1)(b) of the Kerala Building Tax Act, 1975 was rejected.

The Single Bench of Justice Ziyad Rahman A.A. held, “It is clarified that, in case it is found that, the building is used for providing free accommodation to aged and disabled persons, who rendered their services to the petitioner in the charitable/religious institutions of the petitioner, and their dependent family members who have no other means, the benefit of section 3(1) (b) of the Kerala Building Tax Act, 1975 shall be extended to the petitioner.”

Advocate Shinto Mathew Abraham represented the Petitioner while Senior Government Pleader Reshmitha R Chandran represented the Respondent.

Factual Background

The petitioner had constructed a building, mainly intended for using it as a housing complex for retired and aged clergymen and their families. The same was constructed with the charitable and religious aim of conducting worship and providing shelter and care for retired, aged and indigent clergymen and families of the deceased clergymen, who have no other means of livelihood and protection in their old age. Applications were submitted by the petitioner, seeking an exemption. However, the Government considered the said application and rejected the claim, after hearing the authorised representative of the petitioner. It was in such circumstances that the Petition came to be filed before the High Court.

Reasoning

The Bench referred to Section 3(1)(b) of the Kerala Building Tax Act, 1975, which provides for exemption from payment of building tax in respect of buildings used principally for religious, charitable or educational purposes or as factories or workshops. “What is relevant for granting exemption is the principal use of the building and it must be either for religious, charitable or educational purposes or as factories or workshops”, it added.

The Bench took note of the contention of the Government Pleader that the purpose was to accommodate the persons who are related to the petitioner alone, and the access was provided only to those persons who had rendered their services to the institution. Reference was made to the judgment in Lisie Medical Institutions v. State of Kerala and Others (2023), where it was held that no exemption could be granted in a case where the predominant activity of the hospital was to provide treatment by collecting charges, and the free treatment was extended only to a limited number of patients.

“Therefore, in the light of the decisions referred to above, the term ‘charity’ has to be understood to be a service, which is extended to all without any remuneration collected from the parties concerned. Of course, even though some of the inmates are making any payment, that by itself would not disentitle the person concerned from claiming exemption”, it said while also adding, “Thus, the conclusion as to the legal position possible from the above discussions is that, if the building is utilized for the benefit of the persons who have rendered their services to the institution alone, the same cannot be treated as a charity. However, even while holding so, a distinction has to be drawn by taking the nature of the institution which is operating the activities in the building in question.”

It was the case of the petitioner that they were engaged in charitable activities and not for profit. The Bench explained that in a case in which, the building is utilized for free accommodation of the aged and disabled persons who rendered their services to establishments exclusively engaged in charitable/religious activities and managed by the institution owning the building in question, a different yardstick needs to be applied. “In other words, if the accommodation is provided without collecting charges, for the persons who rendered their services to the charitable/religious institutions managed by the owner of the building, it has to be treated as a charitable purpose within the meaning of section 3(1) (b) of the Act. The claim of the petitioner in this regard has to be verified by the authority concerned, for determining the eligibility of the petitioner for exemption.”

Considering the fact that the rejection order was passed only on the ground that no religious activity was being carried out therein, the Bench held that the matter required reconsideration. The Bench disposed of the petition with a direction to the Government to reconsider the application for exemption.

Cause Title: Marthoma Syrian Church v. State of Kerala (Neutral Citation: 2025:KER:69036)

Appearance

Petitioner: Advocates Shinto Mathew Abraham, Santhosh Mathew, Arun Thomas, Karthika Maria, Anil Sebastian Pulickel, Mathew Nevin Thomas, Kurian Antony Mathew, Karthik Rajagopal, Leah Rachel Ninan

Respondent: Senior Government Pleader Reshmitha R Chandran

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