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2002 DIGILAW 189 (KER)

Holy Family Hospital v. Tahsildar

2002-03-15

B.N.SRIKRISHNA, G.SIVARAJAN

body2002
Judgment :- Srikrishna, C.J. Appeal admitted. Notice made returnable forthwith. Respondents waive service through learned Senior Government Pleader. By consent, appeal called out for hearing and heard. 2. The High Court is vested with discretionary jurisdiction under Article 226 of the constitution to do justice; but it is not a tax collector for the State Government. If the facts and circumstances of the case so require, it is open to this court quash even an order of assessment of tax; nay it is its constitutional duty. All the more so, when there is no assessment or crystallized tax liability determined, but only rejection of an application for exemption from Building tax on untenable grounds and non application of mind to germane factors. Now, to the facts. 3. The appellant is a hospital which has already been recognized as a charitable institution by an order made under Section 3(1)(b) of the Kerala Building Tax Act, 1975 (hereinafter referred to as "the Act") on 24-1-1984 by the State Government (vide Ext. P4). The appellant has constructed additional buildings within its campus in respect of which it claimed exemption from building tax under Section 3(1)(b) of the Act by an application made on 26-3-2001 (vide Ext. P5). According to the appellant, the additional buildings are to be used for housing a nursing school, a hospital run building, and hospital quarters. An order of assessment of building tax was made (Ext. P8) without application of mind to the facts urged in the application at Ext. P7. This order was impugned in the Writ Petition. The Petition was disposed by the impugned order of the learned single judge who set aside the order of assessment and remitted the matter for consideration by the State Government, which would have to take into account the expansive meaning of "charitable purpose" as indicated in the explanation to Section 3(1)(b) of the Act. That the predominant activity of the appellant is charitable is beyond cavil, in as much as Ext. P4 order of the Government accepts it. It was necessary for the assessing officer to apply his mind to the purpose for which the additional building is going to be used. That the predominant activity of the appellant is charitable is beyond cavil, in as much as Ext. P4 order of the Government accepts it. It was necessary for the assessing officer to apply his mind to the purpose for which the additional building is going to be used. For that, he could have called upon the appellant to justify his claim on material, and if there was yet a doubt, then Sub-section (2) of Section 3 of the Act requires him to refer the matter to the State Government. Without any application of mind, the assessing officer rejected the claim of the appellant. This, to say the least, was illegal and impermissible. Being aggrieved, the appellant challenged the order by its original Petition. 4. The original Petition has been disposed of by the judgment of the learned Single Judge dated 27th February, 2002. The learned Single Judge has rightly directed that the matter be referred to the State Government for its decision under Section 3(2) of the Act. The learned Judge further went on to say; "however, having regard to the nature of the demand and the fact that prima facie there is no exemption available under the Circular of the Government referred to above, I feel the petitioner should be directed to pay some amount". Accordingly, the learned Single Judge stayed the recovery notice, Ext. P8, on condition that the appellant deposits Rs. 5,00,000/- (Rupees Five Lakhs) within two weeks from the date of the judgment. If the order of assessment is improper, the order has to be set aside in its entirety and the matter referred to the Government. Once that is done, it is the legal obligation of the State Government to apply its mind to all relevant aspects of the matter and take a consequential decision in the matter as to exemption from Building Tax. Till that is done, there is no question of depositing "some amount". The Government is neither asking for charity from the appellant, nor are we enforcing it. Hence, we set aside the judgment under appeal to the extent of the direction to deposit the amount of Rupees Five Lakhs made therein. The Writ Appeal is partly allowed.