Judgment :- N.K. Sodhi, Ag. C.J. Medical Trust Hospital, M.G. Road, Ernakulam is the appellant before us. It is being run by M/s Pulikkal Medical Foundation Limited, a public company registered under the Companies Act, 1956. It received a notice dated 16.4.1999 proposing assessment of building tax under the Kerala Building Tax Act, 1975 (hereinafter called ‘the Act’). A detailed reply was filed claiming exemption from building tax in respect of the hospital building on the ground that the building was primarily used for charitable purposes and was, therefore, exempt from building tax under section 3(1)(b) of the Act. The assessing Authority referred the matter to the Government for its decision under Section 3(2) of the Act. It was urged before the State Government that the hospital was being run for charitable purpose and, therefore, in view of the judgment of this Court in (ITR Nos. 6 and 7 of 1992) which was affirmed by the Apex Court which dismissed the SLPs, it was exempt from the provisions of the Act. The Government examined the contentions raised by the appellant and came to the conclusion that Section 3(1) of the Act provides exemption to a building the principal use of which is for charitable purpose. If found that the principal use of the building of the hospital was not for charitable purpose but the building was actually being used for remunerative purpose and since the hospital authorities were charging fee for treatment and collecting room rent from the patients it could not be exempted under Section 3(1) of the Act. The objections filed by the appellant were rejected by order dated 4.4.2003 and it was held that it was not entitled to exemption from payment of building tax under the Act. Feeling aggrieved by this order the appellant filed W.P. No. 15583 of 2003 in this Court which came up for hearing before a learned single Judge. On a consideration of the matter the learned single Judge upheld the order of the State Government to the extent that the appellant was not entitled to exemption under Section 3(1) of the Act but set aside the order of assessment on the ground that the appellant had not been afforded a proper opportunity of hearing and remanded the case to the assessing authority to pass a fresh order. It is against this order that the present appeal has been filed under Section 5 of the Kerala High Court Act. 2. We have heard the learned counsel for the appellant and gone through the records and are of the view that the appeal deserves to be dismissed. 3. The primary argument raised before the learned single Judge has been reiterated before us and it is urged that the appellant is a charitable institution entitled to exemptions under Section 3(1)(b) of the Act and that the Government Order declining exemption is illegal and arbitrary. Reliance has also been placed on the Division Bench judgments of this Court in (ITR Nos. 6 and 7 of 1992). At this stage it would be necessary to refer to the provisions of Section 3 of the Act under which exemption is claimed. “3. Exemptions: - (1) Nothing in this Act shall apply to- (a) building owned by the Government of Kerala or the Government of India or any local authority; and (b) buildings used principally for religious, charitable or educational purposes or as factories or workshops. Explanation: - For the purposes of this Sub-section, “Charitable purpose” includes relief of the poor and free medical relief. (2) If any question arises as to whether a building falls under sub-sec (1) or under Section 3A it shall be referred to the Government, and the Government shall decide the question after giving the interested parties an opportunity to present their case. (3) A decision of the Government under Sub-section (2) shall be final and shall not be called in question in any court of law. 3A. (1) XXX XXX (2) The Government may, if they consider it necessary so to do, by notification in the Gazette, make exemption from the payment of building tax either wholly or partly in respect of any building or buildings constructed utilizing the grant of the Central Government or the State Government, where such grant is not less than twenty-five per cent of the total cost of the construction of the building and such building is intended for such purposes as may be prescribed subject to the condition that the building tax if any, already paid shall not be refunded or otherwise adjusted. A reading of the aforesaid provision makes it clear that Section 3 deals with exemption of buildings from the levy of building tax. A reading of the aforesaid provision makes it clear that Section 3 deals with exemption of buildings from the levy of building tax. It has two clauses (a) and (b). Clause (a) deals with buildings which are exempted on the basis of ownership. According to this clause buildings which are owned by the Government of Kerala or by the Government of India or by any local authority are exempted. Under clause (b), exemption is granted not on the basis of ownership of the building but on the basis of its user. According to clause (b), buildings which are “used principally for religious, charitable or educational purposes” are exempt from building tax. The explanation to the Section tells us what charitable purpose includes. According to the explanation, charitable purpose includes relief of the poor and free medical relief. A reading of the explanation with clause (b), leaves no room for doubt that buildings which are “used principally” for giving relief to the poor and free medical relief would be deemed to be used principally for charitable purposes and would be exempt from tax, whatever be the objects of the institution owing them. A building which may be owned by a charitable institution but not “used principally” for giving relief to the poor and free medical relief would not be entitled to claim exemption. Similarly, a building may not be owned by a charitable institution but if it is used principally for religious, charitable or educational purposes or as a factory or workshop it would be entitled to the exemption. It is, thus, clear that a building is not exempt from tax merely because it is owned by a charitable institution. Such a building would be entitled to exemption only if it is “used principally” for any of the purposes referred to in clause (b) of Section 3(1) of the Act. As already observed, exemption on the basis of ownership is granted only under clause (a) and charitable institutions are not included therein. Buildings owned by them (charitable institutions) could claim exemption on the basis of their user in terms of clause (b). Again, in a broader sense, granting of medical relief could also be described as a charitable purpose but the kind of medical relief contemplated by the explanation is “free medical relief”. Buildings owned by them (charitable institutions) could claim exemption on the basis of their user in terms of clause (b). Again, in a broader sense, granting of medical relief could also be described as a charitable purpose but the kind of medical relief contemplated by the explanation is “free medical relief”. In other words, if a building is used principally for providing free medical relief which would include relief to the poor, it would be covered by clause (b) of Section 3(1) of the Act and could claim exemption there under but not otherwise. In this view of the matter, the argument of Sri. M.P. Abraham, learned counsel for the appellant that the appellant is entitled to exemption because the hospital is being run by a Trust which is a charitable institution cannot be accepted. The purpose for which the building of the hospital is being “used principally” will have to be seen to determine whether it is entitled to exemption or not. When this issue was raised before the assessing authority, the same was referred to the Government for its decision under Section 3(2) of the Act and the Government has found as a fact that “use of the building in question is not for charitable purpose but the building is actually used for remunerative purpose”. The Government also found that the affairs of the hospital were not carried on strictly in accordance with clause III A of the Memorandum of Association of Pulikkal Foundation Limited since the hospital authorities are charging fee for the treatment of patients and also collecting room rent from them. This issue was also raised before the learned Single Judge and the matter was thoroughly examined. He looked into the audited income and expenditure statement of the hospital for the year ending 31-3-2002 which was produced at the time of arguments. It has been found that the gross collection of the appellant was around 19.9 crores from charges for medical treatment under various heads whereas its expenditure under free medical treatment was only Rs.57,87,002/- which also includes the value of medicines and other items supplied free of cost. From these figures, the learned Single Judge rightly concluded that the appellant was rendering medical services not on charitable basis but was levying charges on commercial lines and that after all the expenditure, it has a profit of over Rs.1.2. crores. From these figures, the learned Single Judge rightly concluded that the appellant was rendering medical services not on charitable basis but was levying charges on commercial lines and that after all the expenditure, it has a profit of over Rs.1.2. crores. In view of this finding, the learned single Judge concluded that the building of the hospital was not “Principally used” for rendering free medical services and therefore it was not entitled to the exemption claimed under Section 3(1) of the Act. We are in agreement with the learned Single Judge and find no ground to take a view different from the one taken by him. 4. Learned counsel for the appellant placed reliance on a Division Bench judgment of this Court in L.T.R. Nos. 6 and 7 of 1992 decided on 5th August, 1993 in the case of the appellant to contend that it was entitled to exemption under Section 3(1) (b) of the Act. We are afraid this judgment can be of no help to the appellant. That was a case where the entire income for the assessment years 1981-1982 and 1982-1983 was sought to be exempted under Section 10(22A) of the Income Tax Act. There, the only question which arose for consideration was whether the hospital was “existing solely for philanthropic purposes and not for purposes of profit?” The provisions of Section 10(22A) of the Income Tax Act came to be considered and it was held that the primary purpose of hospital was philanthropic even if it did some profit earning business and was therefore entitled to exemption under Section 10(22A) of the Income Tax Act. The interpretation put on those provisions can be of no help in deciding whether the hospital building is being “used principally” for providing free medical relief to the poor in terms of Section 3(1) of the Act. In Municipal corporation of Delhi v. Children Book Trust, AIR 1992 S.C. 1456, it has been observed by the Apex Court that charitable purpose under the Income Tax Act could be different from the charitable purpose as understood under the municipal laws. As already observed, the issue involved in the income tax reference pertaining to the appellant was different from the one which is before us. 5. The only other judgment relief upon by the appellant is State of Kerala v. St. Gregorious Medical Mission, 1992 (1) KLT 230. As already observed, the issue involved in the income tax reference pertaining to the appellant was different from the one which is before us. 5. The only other judgment relief upon by the appellant is State of Kerala v. St. Gregorious Medical Mission, 1992 (1) KLT 230. In this case, the Court held that collection of some amount from patients who could afford to pay does not disentitle a hospital building from tax exemption under the Act when it was being used principally for charitable purposes. In the case before us, it has been found by the learned Single Judge that the appellant is running medical services on commercial lines and the free medical services rendered are insignificant which finding was recorded on the basis of the audited accounts of the appellant. We have already expressed our agreement with those findings of the learned Single Judge. This judgment too is of no help to the appellant. 6. The appellant had challenged the assessment order and also the demand notice issued by the Tahsildar on the ground that the assessment had been completed without affording proper opportunity to the appellant. It was observed that tax had been assessed for the building on the square area of 14368.80 square meters and it was not known whether the figure had been taken from the appellant’s return or from the approved plans and whether the Tahsildar had conducted any inspection. The contention was accepted and the Tahsildar has been directed to inspect the building, determine its plinth area and re-decide the matter, it has been left open to the appellant to raise all other issues before the Tahsildar. This part of the order was not challenged before us. 7. No other point was raised. In the result, there is no merit in the appeal and the same stands dismissed.