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2016 DIGILAW 16 (KER)

SAKEER HUSSAIN K. v. STATE OF KERALA

2016-01-07

A.K.JAYASANKARAN NAMBIAR

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JUDGMENT : A.K. JAYASANKARAN NAMBIAR, J. 1. The petitioner, who is an authorised dealer of Hyundai Motor Cars, is aggrieved by Exts.P3 and P4 orders, whereby the claim for exemption from building tax preferred by the petitioner has been rejected by the 1st respondent, and the buildings put up by the petitioner subjected to tax under the Kerala Building Tax Act. It is the case of the petitioner that, in the premises owned by it, there are two buildings, one of which is used as a show room for the display and sale of vehicles and the other, is used as a workshop/factory for repairing and servicing of vehicles that are sold by Hyundai Motors. Ext.P3 assessment order, as also Ext.P4 order of the 1st respondent that denies the petitioner the benefit of exemption under Section 3 of the Kerala Building Tax Act, proceed on the assumption that both the buildings constitute a single unit where only a small portion of 548.34 sq.mtrs. is used as the show room and an area of 1781.02 sq.mtr. is used as a workshop. It is the case of the petitioner that it is on the basis of this erroneous finding of fact, and application of law, that the petitioner has been denied the benefit of exemption in respect of the building that was being used as a workshop. 2. I have heard the learned counsel appearing for the petitioner as also the learned Government Pleader appearing for the respondents. 3. In the counter affidavit filed on behalf of the 1st respondent, Ext.P4 order of the 1st respondent is sought to be justified on the reasons stated therein. In particular, it is pointed out that the principal use of the building is not as a workshop but as a show room of Hyundai cars. It is stated that, it is because the principal use of the building was not as a workshop that the benefit of exemption was not extended to the petitioner's building. 4. On a consideration of the facts and circumstances of the case as also the submissions made across the bar, I find that in Ext.P4 order, the 1st respondent proceeded on the assumption that there is only one building with a total plinth area of 2329.36 sq.mtrs. and the principal use to which the building is put is not that of a workshop. and the principal use to which the building is put is not that of a workshop. This assumption of the 1st respondent in Ext.P4 order militates against the specific contention of the petitioner herein, based on Ext.P1 site plan, that there are in fact two buildings in the premises with separate building numbers, one of which is used as a show room and the other, which is used exclusively as a workshop. In Ext.P4, there is considerable ambiguity with regard to the number of buildings in the premises and the extent pertaining to the show room and the workshop respectively. Under the circumstances, I am of the view that the matter requires a fresh examination in the hands of the 1st respondent. 5. As per the provisions of the Kerala Building Tax Act, 1975 and in particular Section 3 (1)(b) of the said Act, the provisions of the Act will not apply to buildings used principally for religious, charitable or educational purposes or as factories or workshops. Under the scheme of taxation under the Building Tax Act, the assessment to tax is in respect of a building, and the tax is assessed on the owner of the building. It follows therefore, that the grant of exemption must also be in relation to a building and not to a business establishment. Thus, if in any premises belonging to a business establishment, there are more than one buildings situated, then the assessment for the purposes of Kerala Building Tax Act must be in relation to each of those buildings separately. The issue as to whether each of these buildings separately qualifies for the grant of exemption under Section 3 must be examined by the Government, and the exemption granted if the building qualifies for the same. In cases where, there is only one building owned by the assessee, and separate areas of the same building are used for varied purposes, the Government would have to examine as to whether the building, as a single unit, can be seen as principally used for religious, charitable or educational purposes or as factories or workshops. In cases where, there is only one building owned by the assessee, and separate areas of the same building are used for varied purposes, the Government would have to examine as to whether the building, as a single unit, can be seen as principally used for religious, charitable or educational purposes or as factories or workshops. In this exercise, the nature of activity carried on in the building by the owner of the same, as also the extent of the area in the building, that is set apart for activities that are religious, charitable or educational in nature or for the purposes of use as factories or workshops would be relevant, to aid the Government in deciding on whether or not an exemption can be granted under the Act. The Government cannot mechanically deny an exemption without adverting to the above factual aspects in each case. Inasmuch as in Ext.P4 order of the 1st respondent I do not see an examination of the issue as having been done in the manner stated above, I quash Exts.P3 and P4 orders and direct the 1st respondent to re-examine the matter and pass fresh orders, after hearing the petitioner, within three months from the date of receipt of a copy of this judgment. The writ petition is disposed as above.