Regional Sports Centre Vs State of Kerala (Kerala High Court)
Summary: The Kerala High Court set aside the Kerala Government’s order dated 25.04.2023 rejecting Regional Sports Centre, Cochin’s claim for exemption from building tax and directed fresh consideration of whether its buildings were principally used for charitable purposes under Section 3(1)(b) of the Kerala Building Tax Act, 1975. The petitioner, a society registered under the Travancore Cochin Literary, Scientific and Charitable Societies Registration Act, 1955, operated a sports complex in Cochin and claimed to provide training facilities in 33 sports. It sought exemption on the ground that its buildings were principally used for charitable and educational purposes. The petitioner also relied upon exemptions/registrations granted under Section 12A and Section 80G of the Income Tax Act, 1961 and contended that promotion of sports constituted an object of general public utility without profit motive.
The Government opposed the claim, pointing to membership, user and coaching fees and contending that free training was extended only to four persons. On the claim of “educational purposes”, the High Court referred to Sole Trustee, Loka Shikshana Trust v. Commissioner of Income Tax, Mysore and Assistant Commissioner of Income-Tax (Exemptions) v. Ahmedabad Urban Development Authority and held that sports promotion could not be brought within “education” in the relevant sense. The Court, however, found that the claim under “charitable purposes” required reconsideration. The Government’s conclusion that free training was given only to four persons did not adequately account for Ext.P7, which showed free coaching being provided to various persons in different sports, including on recommendations of MPs, MLAs and Councillors.
