Judgment 1. Petitioner constructed buildings numbered as XII/832, XII/833-843 in Sy.No.353/2-2 of Komalapuram Village. The building was constructed in the year 1974. Initially the building was used as a factory which was also registered as an SSI unit. The pleadings also show that the actual date of occupation of the building was on 20/2/1974. In view of the provisions of Section 3 (1)(b) of the Kerala Building Tax Act exempting buildings which are used principally as factories from the levy of tax thereunder, the building was not assessed to building tax. 2. However, the factory functioned only upto 1989 and after renovating the building, the petitioner started a bar attached hotel in the building w.e.f. 3/11/1989 and it is still functioning. On the change of the user of the building as above, respondents initiated assessment proceedings under the Kerala Building Tax Act and issued an assessment order levying tax of `82,800/-. The appeal filed by the petitioner was dismissed by the Revenue Divisional Officer, Chengannoor. 3. Petitioner thereafter filed a revision before the District Collector and contended that the building is entitled to exemption from the levy of tax under the Kerala Building Tax Act. In view of the provisions contained in Section 3(2) of the Act, District Collector referred the claim of the petitioner to the Government for a decision. Accordingly, Government afforded the petitioner an opportunity of hearing and passed Ext.P12 order dated 2/3/2009 rejecting the petitioner's claim for exemption and directing the Tahsildar to assess the building under Section 3B of the Act. It is challenging the proceedings culminating in Ext.P12, this writ petition is filed. 4. Section 3 of the Kerala Building Tax Act provides for exemptions and Section 3(1)(b) provides that nothing in the Act shall apply to buildings used principally as factories or workshops. It was giving the benefit of this provision that the building of the petitioner was exempted from the assessment under the Kerala Building Tax Act. However, the building continued as a factory only till 3/11/1989 when the petitioner started a bar attached hotel in the building and that too after renovating the same. Therefore, with the change of user of the building in question, the building ceased to belong to any one of the eligible categories provided in Section 3(1)(b) and as a result, the petitioner lost the benefit of exemption. Therefore, with the change of user of the building in question, the building ceased to belong to any one of the eligible categories provided in Section 3(1)(b) and as a result, the petitioner lost the benefit of exemption. If that be so, for the period from 3/11/1989, the building in question is liable to be assessed in the manner as provided in the Kerala Building Tax Act applying the relevant entry in the schedule thereto. 5. However, the learned Government Pleader relied on the provisions of Section 3B of the Kerala Building Tax Act and contended that such assessment should be from the date of completion of construction. Section 3B providing for misuse of exemption by assessees reads thus; "3B Misuse of exemption by the assessee – Where any building which has been exempted from payment of building tax under the provisions of this Act, is found to be used in any manner which would nullify the eligibility for exemption, the owner shall be liable to be assessed and to pay building tax under this Act together with penal interest at the rate of 12% per annum from the date of completion of construction of the building." 6. A reading of this provision shows that it applies to buildings which are exempted from the payment of Building Tax Act and which are later found to be used in any manner which would nullify the eligibility for exemption. In other words, this provision can apply only in respect of buildings which are granted exemption treating it as falling in any of the categories mentioned in Section 3(1)(b) and at the same time, are used for purposes which are ineligible for such exemption. This provision therefore cannot apply to a case where a building is used as a factory but is later converted and used as a hotel as in the case of the petitioner. Therefore, the respondents cannot assess the building invoking Section 3B from the date of completion and levy penal interest as provided therein. This writ petition is therefore disposed of upholding the assessment proceedings but directing that the assessment shall be only from 3/11/1989 when the petitioner started using the building as a bar attached hotel.