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THIRURANGADI MUSLIM ORPHANAGE COMMITTEE v. THE GOVERNMENT OF KERALA REPRESENTED - WA No. 1747 of 2006(E)  RD-KL 9681 (6 June 2007)
IN THE HIGH COURT OF KERALA AT ERNAKULAMWA No. 1747 of 2006(E)
1. THIRURANGADI MUSLIM ORPHANAGE COMMITTEE,
1. THE GOVERNMENT OF KERALA REPRESENTED
2. THE TAHSILDAR, TIRURANGADI TALUK,
For Petitioner :SRI.V.M.KURIAN
For Respondent :GOVERNMENT PLEADER
The Hon'ble the Chief Justice MR.H.L.DATTU The Hon'ble MR. Justice K.T.SANKARAN
O R D E R
H.L.DATTU, C.J. & K.T.SANKARAN,J.W.A. NO. 1747 OF 2006 E
Dated this the 6th June, 2007
H.L.DATTU, C.J. In this appeal, the appellant calls in question the correctness or otherwise of the orders passed by the learned single Judge in O.P.No.24824 of 1999 dated 6th June, 2006. The learned Judge, relying on the decision of this Court in Medical Trust Hospital v. State of Kerala (2004 (2) KLT 139), has rejected the writ petition. While doing so, this Court has observed as under: Admittedly petitioner is not rendering medical service free of cost in the hospital even though petitioner has a case that in some cases free services were rendered.
2. The facts in brief are: The appellant before us is a registered charitable society. The aims and objects of the society include establishment and running of orphanages, educational institutions, vocational training centres, hospitals and other charitable institutions. It is in pursuance of its main aims and objects the society is running an orphanage, various educational institutions and a hospital known as `M.K.Haji Orphanage Hospital' at Thirurangadi. W.A. NO.1747 OF 2006
3. The appellant had approached the State Government claiming
exemption from payment of tax under the
provisions of the Kerala Building
Tax Act, 1975 (hereinafter, for the sake of brevity and convenience, referred
to as Act
1975). The State Government after taking into consideration the
statement of accounts produced by the appellant has
observed in its order
dated 7.9.1999 that the appellant is spending a very meager amount for the
treatment of poor patients
and, therefore, they are not entitled for exemption
under Section 3(1)(b) of the Kerala Building Tax Act. The order passed
the State Government is as under:
"GOVERNMENT OF KERALA Taxes (H) Department, Thiruvananthapuram,
No.18592/H3/98/TD Dated: 7.9.1999.From The Principal Secretary to Government. To The Secretary, Tirurangadi Muslim Orphanage Committee, Saudabad, Tirurangadi - 676306. Sir, W.A. NO.1747 OF 2006 Sub: Kerala Building Tax Act - Request for exemption from payment of building tax - Regarding. Ref: Your representation dated 24.8.1998. I am to invite your attention to the reference cited and to inform you that Government have examined your request for exemption from payment of building tax to the building in RS.No.113/4 of Tirurangadi Village of Malappuram District in which M.K.Haji Orphanage Hospital owned and managed by Tirurangadi Muslim Orphanage Committee is functioning. The statement of your Counsel at the time of hearing on 24.2.1999 were also considered. On verification of the available records it is found that the hospital functioning in the building in question is charging fees and other charges from the patients. The Income & Expenditure statement for the year ended 31.3.1998 shows that the hospital is generating income heavily from treatment of patients and it is spending a very small amount towards treatment of Orphans. It cannot be considered as a building principally used for charitable purpose. The building is not eligible for exemption under Section 3(1)(b) of the Kerala Building Tax Act. Your request for exemption is hereby declined. Yours faithfully, K.N.Vilasini, Addl.Secretary, For Prl.Secretary to Govt."
4. Aggrieved by the said order passed by the State Government, the appellant was before this Court in O.P.No.24824 of 1999. The learned Judge has rejected the original petition following the judgment of this W.A. NO.1747 OF 2006 Court in Medical Trust Hospital's case. Therefore, the appellant is before us in this appeal.
5. The learned counsel appearing for the appellant would submit that the hospital run by the appellant society is for a charitable purpose and the hospital is rendering services to the poor and also giving free medical relief and, therefore, the State Government was not justified in rejecting the claim of the appellant for exemption from payment of the building tax under Act 1975. In support of his contention the learned counsel takes us through the observations made by this Court in Medical Trust Hospital v. State of Kerala (2004(2) KLT 139) and also the decision of this Court in State of Kerala v. St.Gregorious Medical Mission (1992(1) KLT 230).
6. In order to appreciate the contentions canvassed by the learned
counsel for the appellant,
the provisions of Section 3 of the Act is to be
noticed and, therefore, we extract the same. It reads as under:
"3. Exemptions:- (1) Nothing in this Act shall apply to--
(a) buildings 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, W.A. NO.1747 OF 2006 "charitable purpose" includes relief of the poor and free medical relief. (2) If any question arises as to whether a building falls under sub-section (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."
7. Section 3 of the Act states that the provisions of the Kerala Building Tax Act will not apply to the buildings owned by the State Government or the Central Government or any local authority. Section 3 (1)(b) envisages that the Act will not apply in the case of buildings used principally for religious, charitable or educational purposes or as factories or workshops.
8. The explanation appended to sub-section 3(1)(b) of the Act defines `charitable purpose' for the purpose of Section 3 (1)(b) of the Act. It is an inclusive definition. It says: charitable purpose should include relief of the poor and free medical relief.
9. Assuming that the appellant society is a charitable institution it has to satisfy two more conditions. That is, it should cater to the needs of the poor people and also provide a free medical relief. W.A. NO.1747 OF 2006
10. Judicial review of an administrative action cannot be expanded to find fault with every order passed by an Executive. This can be done only as observed by Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service ((1985) AC 374), "one can conveniently classify under three heads the grounds upon which administrative action is subject to control by judicial review. The first ground I would call 'Illegality', the second 'irrationality' and the third 'procedural impropriety'. That is not to say that further development on a case by case basis may not in course of time add further grounds."
11. In the instant case, admittedly, the appellant had approached the State Government claiming exemption from payment of tax under Act 1975. At the time of hearing of the application, the appellant society had produced the statement of accounts maintained by them for the purpose of Income Tax Act. After going through the statement of accounts so produced, the State Government has come to the conclusion that the appellant has spent a very meager amount towards free medical relief to the poor patients. This is a finding of fact and this finding of fact cannot be disturbed by us unless we have sufficient and cogent material before us.
12. In the decisions on which reliance is placed by the learned W.A. NO.1747 OF 2006 counsel for the appellant it is made very clear that if major portion of the amount is spent by the hospital for catering to the needs of poor people and providing free medical relief, then such an institution is completely exempted under Section 3(1)(b) of the Act. In the instant case, as we have already noticed that though the appellant society is a charitable institution it has not fulfilled the other two conditions, namely, it does not cater to the needs of poor and does not provide free medical relief. In that view of the matter, we are of the opinion that the learned Judge was justified in holding that the appellant is not rendering medical services free of cost in the hospital. Therefore, they are not eligible for exemption under Section 3(1) (b) of the Act. We concur with the reasonings and conclusions rendered by the learned single Judge. Therefore, interference of the said order is not called for. Therefore, the appeal requires to be rejected and it is rejected. Ordered accordingly. (H.L.DATTU) Chief Justice (K.T.SANKARAN) Judge ahz/
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