Summary
A two-Judge Bench doubted the observation in S.H. Medical Centre Hospital that the Explanation to Section 3(1) of the Kerala Building Tax Act, 1975 means that 'charitable purpose' is confined to relief of the poor and free medical relief. A three-Judge Bench answered the reference: the Explanation uses the word 'includes', which on settled principles is not exhaustive, so relief of the poor and free medical relief are only facets of charitable purpose, and S.H. Medical Centre Hospital is overruled to that extent; its reading of 'principally' in Section 3(1)(b) as the dominant substantive use, as distinct from an ancillary use, stands. Since the Kerala High Court had dismissed the hospital's writ appeal solely on the overruled decision, that judgment was set aside and the appeal restored for decision on the facts in light of the clarified interpretation.
Issues
- Whether the Explanation to Section 3(1) of the Kerala Building Tax Act, 1975 confines 'charitable purpose' to relief of the poor and free medical relief, as observed in S.H. Medical Centre Hospital v. State of Kerala.
- Whether the interpretation in that decision of buildings 'used principally' for charitable purposes as denoting the dominant use requires reconsideration.
Provisions considered
- Section 3(1)(b) and the Explanation to Section 3(1), Kerala Building Tax Act, 1975The exemption covers buildings used principally for religious, charitable or educational purposes; the Explanation that charitable purpose 'includes' relief of the poor and free medical relief is illustrative and not exhaustive, while 'principally' means the dominant substantive use as distinguished from an ancillary use. (¶¶ 3, 4, 7, 9, 10)
Held
- The two-Judge Bench conflated 'includes' with 'means'; the plain intendment of the Explanation is that relief of the poor and free medical relief do not exhaust the content of charitable purpose, and the contrary observation in paragraph 17 of S.H. Medical Centre Hospital does not correctly reflect the law and is overruled to that extent, as the referring judgment of Sikri J. had noted. (¶¶ 5, 6, 7, 10)
- The Division Bench of the High Court relied only on S.H. Medical Centre Hospital in dismissing the writ appeal, so its judgment is set aside and the writ appeal restored for decision on the facts, keeping the factual analysis open under the interpretation now clarified. (¶¶ 11, 12, 13)
Result
Reference answered; S.H. Medical Centre Hospital v. State of Kerala overruled to the extent of its interpretation of the Explanation to Section 3(1)(b) of the Kerala Building Tax Act, 1975; Kerala High Court judgment dated 18.07.2016 set aside and Writ Appeal No. 1386 of 2016 in WP (C) No. 20448 of 2016 restored to the High Court for disposal in light of the interpretation; appeal and pending applications disposed of.