In a recent ruling, the division bench of the Kerala High Court comprising Justice Thottathil B Radhakrishnan and Justice Devan Ramachandran held that the exemption from Bulding Tax is limited to those educational institutions whose entire resources utilised for the welfare of its students.
The petitioner, The Clarist Medical Trust Of The S.H. Province, a college of nursing as well as a school of nursing, earlier approached this Court claiming exemption from Building Tax wherein, the Single Judge denied the same.
Aggrieved by the same, they preferred an appeal before the division raising a question that whether an education institution imparting teaching in nursing gets itself attached or affiliated to a hospital for its clinical requirements would then obtain itself to be viewed as being used principally for educational purposes.
The appellants contended that they are running a College and a School of Nursing by name Sanjoe School of Nursing and Sanjoe College of Nursing with an annual intake of 56 students in both B.Sc. Nursing and M.Sc. Nursing courses. According to them, the hospital run by them, is a parent hospital for the College and School of Nursing and that it being an integral part of it, ought to be deemed as an educational institution, thus, deserving exemption from payment of building tax. Further, the principal use of the hospital building, being the parent/affiliated hospital of the School and College of Nursing is for educational purposes and thus authorised to exemption.
Rejecting the contentions, the division bench, relying upon precedents, said that, merely because a hospital is attached to an educational institution is not suffice to hold the same entitled for exemption from paying tax under the guise of being an educational institution.
The bench further held that if at all to claim any exemption, such an institution, hospital in this case, should utilise their entire resources /profits for the benefit of the students, school, college etc. it was further opined that the said institution should cater solely to the purposes of students of such school or college, perhaps even to subsidise the education of students. “We would assume that if at all a claim is laid out that a hospital exists only for the purpose of a College or School of Nursing, it would then have to be made manifest by the asserter that the hospital caters solely to the purposes of students of such School or College and that all the profits and earnings from such hospital is being used solely for the purposes of the School or College Nursing, perhaps even to subsidise the education of the students.”
“Perhaps, if the appellants had a case that even though the hospital does not offer medical relief free of cost but that all the amounts or at least all the profits received from the hospital are put to use for the educational institutions, then we would suspect that they could have possibly gained a better footing to claim exemption. In any event of the matter, the case of the appellants is quite to the contrary. They admit that the hospital does not offer free medical relief nor that it is meant only for the purpose of the School and College of Nursing. They do not admit in any manner that all the profits from the hospital are used for the educational institutions or that the hospital is being run solely for the purposes of the educational institutions,” the bench added.
Read the full text of the Judgment below.
