Buildings Providing Free Housing To Aged, Disabled Persons Who Served Religious/Charitable Institutions Exempt From Building Tax: Kerala HC

The Kerala High Court has recently observed that a building used to provide free housing to aged and disabled persons, and their dependents, would be exempt from tax if these persons had rendered their services in the charitable/religious institutions managed by the building owner. The building owner would be granted the benefit of Section 3(1)(b) of the Kerala Building Tax Act, 1975.

Section 3(1)(b) provides for exemption from payment of building tax if the building is primarily used for religious, charitable or educational purposes or as factories and workshops.

Justice Ziyad Rahman A.A. observed:

"In other words, if the accommodation is provided without collecting charges, for the persons who rendered their services to the charitable/religious institutions managed by the owner of the building, it has to be treated as a charitable purpose within the meaning of section 3(1) (b) of the Act...It is clarified that, in case it is found that, the building is used for providing free accommodation to aged and disabled persons, who rendered their services to the petitioner in the charitable/religious institutions of the petitioner, and their dependent family members who have no other means, the benefit of section 3(1) (b) of the Kerala Building Tax Act, 1975 shall be extended to the petitioner."

In the present case, the building owner/petitioner is a church, and the building in question was residential apartments. It was stated that the building is used to provide free accommodation to retired and aged clergymen and their families, who have no means of livelihood and protection. However, the building was not attached to the church. Thus, the petitioner's application for exemption from building tax was rejected. The proceedings in the High Court were initiated to challenge the rejection order.

Referring to various decisions, including the Division Bench's decision in Lisie Medical Institutions v. State of Kerala and Others, the Court tried to decipher the meaning of 'charity' for the purposes of the provision. It observed:

"The term 'charity' has to be understood to be a service, which is extended to all without any remuneration collected from the parties concerned. Of course, even though some of the inmates are making any payment, that by itself would not disentitle the person concerned from claiming exemption...if the building is utilized for the benefit of the persons who have rendered their services to the institution alone, the same cannot be treated as a charity. However, even while holding so, a distinction has to be drawn by taking the nature of the institution which is operating the activities in the building in question."

Recording the submission of the petitioner that it is engaged in religious and charitable purposes, and noting that the rejection was solely on the ground that no religious activity was being carried out in the building, the Court opined that the matter can be reconsidered. It stated that an exemption can be granted after verifying whether the accommodation was granted free of charge.

Case No: WP(C) No. 5468 of 2025

Case Title: Marthoma Syrian Church v. State of Kerala and Ors.

Citation: 2025 LiveLaw (Ker) 581

Counsel for the petitioner: Santhosh Mathew (Sr.), Shinto Mathew Abraham, Arun Thomas, Karthika Maria, Anil Sebastian Pulickel, Mathew Nevin Thomas, Kurian Antony Mathew, Karthik Rajagopal, Leah Rachel Ninan

Counsel for the respondents: Reshmitha R. Chandran - Senior Government Pleader

Click to Read/Download Judgment