Area Used For Ancillary Purposes Related To Factory Is Also Eligible For Exemption U/s 3(1)(B) Of Kerala Building Tax Act: Kerala High Court

While considering a petition challenging the order wherein the building tax has been imposed on the factory premises of the petitioner situated in Ramanattukara Village, Kozhikode District, the Kerala High Court held that if the predominant purpose is running the factory, the area in which ancillary purposes related to the factory are being carried out is also liable for exemption under Section 3(1)(b) of the Kerala Building Tax Act 1975.

A Single Judge Bench of Justice Dinesh Kumar Singh observed that “The word ‘principally’ has to be assigned some meaning while examining an order denying the exemption from payment of building tax in respect of the factory. ‘Principally’ means predominantly”.

If the predominant purpose of the building is the factory, the Bench clarified that the ancillary purposes carried out in relation to the factory, in a part of the building which houses the factory, cannot be excluded from the exemption of payment of building tax.

Advocate Biju Abraham appeared for the Petitioner, whereas Advocate Jasmine M.M appeared for the Respondent.

The brief facts of the case were that the petitioner is one of the leading printing and publishing unit that publishes magazines, papers, yearbooks, etc., having wide circulation. The petitioner had constructed a building for housing its printing unit and has been granted a license under the Factories Act in respect of the said building. The first respondent had divided the factory building into two parts, i.e., one for factory and other for ‘other purpose’. While rejecting the application of the petitioner for exemption for payment of building tax under Section 3(1)(b) of the Kerala Building Tax Act 1975, the respondent has imposed building tax in respect of part which was for other purpose.

After considering the submission, the Bench found that the godown, security room and news bureau are related to the work of printing and publishing, which is being carried out from the factory premises.

Therefore, the exclusion of the said area from the purview of exemption under Section 3(1)(b) of the Act does not appear to be correct, added the Bench.

Accordingly, the High Court set aside the order denying exemption from payment of building tax.

Cause Title: Mathrubhumi Printing & Publishing Company v. State of Kerala and Anr. [Neutral Citation: 2023/KER/67635]

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