TMI Blog2010 (12) TMI 1303X X X X Extracts X X X X X X X X Extracts X X X X ..... tel building qualifies for exemption from building tax. In view of the above finding, we are unable to agree with the denial of exemption to hostel building attached to the nursing school. Whether hostel facility to students provided by other educational institutions, which are not compulsorily required under the educational regulations to provide accommodation to students, is an educational purpose qualifying the hostel buildings for tax exemption? - HELD THAT:- The hostel buildings are constructed by educational institutions to attract students to their institutions. Many educational institutions provide only basic facilities like building, electricity and water connections for hostels and in fact, students are running mess on sharing basis. So much so, the State's contention that hostels attached to educational institutions are commercial ventures intended to make profit, in our view, is unacceptable. In order to consider whether hostel provided by an educational institution is for educational purpose or not, we have to consider the consequences if such educational institution does not have hostel facility to provide accommodation to its students. Obviously, such educat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he building involved in Writ Appeal No.2495/2009 is a hostel W.A.Nos.1648 2495/2009 building attached to a Residential Higher Secondary School owned by a private management. 4. We have heard learned counsel appearing for both the appellants and have also heard learned Government Pleader appearing for the respondents. 5. The provision of the Act, which requires consideration with reference to the facts of these cases, is Section 3, which is extracted hereunder:- 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, charitable purpose includes relief of the poor and free medical relief. 6. The short question that arises for consideration is whether educational purposes referred to in the above Section has only a restricted meaning covering buildings, where students are imparted education; or whether it has a wider meaning covering hostel buildings owned by educational institutions to provide a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding W.A.Nos.1648 2495/2009 with education, is squarely satisfied in the cases of hostels attached to nursing schools and other medical educational institutions which require compulsory hostel facility for students for their approval. We, therefore, hold that wherever hostel is compulsory for approval of a course study or an educational institution by the regulatory body as in the case of medical and nursing colleges, hostel building is an integral part of the educational institution, and so much so, accommodation to students provided in the hostel building is for educational purpose and therefore the hostel building qualifies for exemption from building tax. In view of the above finding, we are unable to agree with the conclusion drawn by the Division Bench i.e. denial of exemption to hostel building attached to the nursing school. 7. The next question to be considered is whether hostel facility to students provided by other educational institutions, which are not compulsorily required under the educational regulations to provide accommodation to students, is an educational purpose qualifying the hostel W.A.Nos.1648 2495/2009 buildings for tax exemption. In this context, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to the College. Therefore, hostel buildings are constructed by educational institutions to attract students to their institutions. Many educational institutions provide only basic facilities like building, electricity and water connections for hostels and in fact, students are running mess on sharing basis. So much so, the State's contention that hostels attached to educational institutions are commercial ventures intended to make profit, in our view, is unacceptable. In order to consider whether hostel provided by an educational institution is for educational purpose or not, we have to consider the consequences if such educational institution does not have hostel facility to provide accommodation to its students. Obviously, such educational institutions have to source students locally, which may be possible only in the case of Schools. In fact, thousands of schools and colleges in the State do not have hostel facility because they depend on students from the local area only. However, wherever an W.A.Nos.1648 2495/2009 educational institution has students from different parts of the State, and Non Resident Indians sending their children for studies in Kerala, necessarily t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upposed to make profit. The legislature, however, has chosen to grant exemption to factory and workshop buildings and the purpose is obviously to promote industrialisation, goods production, generation of employment etc. So much so, Section 3(1)(b) of the Act does not limit exemption to buildings, where services are rendered free. In fact, education is a separate head and there is nothing to indicate that in order to claim exemption for a building used for educational purpose, education should be rendered free. Though education is not a business, it involves collection of reasonable tuition fees as well as hostel charges, where accommodation is provided. Of course, when education is rendered by way of charity, it has to be free, and so much so, charitable institution can run free educational institutions and such buildings would be exempted both under the heads charity as well as W.A.Nos.1648 2495/2009 education . However since exemption is available for all buildings used for educational purposes, exemption would be available even if charges are levied from students for coaching as well as for hostel facilities. So much so, we hold that charging of fees from students for pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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