Direct and integral use test governs building tax exemption for convent accommodation and student hostels under beneficial exemption law.

Buildings qualify for exemption when their principal use has a direct and integral nexus with religious or educational activity, because the statutory phrase "used principally for" is wider than exclusive use and turns on user rather than ownership. Accommodation for nuns in a convent was treated as integral to the convent's religious purpose, and hostel accommodation for an educational institution's own students was treated as integral to the educational purpose. The beneficial exemption was construed purposively, and the wider context of the Act supported that interpretation. Buildings used in those ways were therefore held eligible for exemption under Section 3(1)(b) of the Kerala Building Tax Act, 1975.

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Issues: Whether buildings used for accommodation of nuns in a convent are buildings used principally for religious purposes under Section 3(1)(b) of the Kerala Building Tax Act, 1975; whether hostel buildings owned by educational institutions and used to house their own students are buildings used principally for educational purposes under the same provision.

Analysis: The exemption turns on user, not ownership, and the statutory expression "used principally for" is wider than exclusive use. The relevant inquiry is the dominant object of the building and whether the use has a direct and integral connection with the religious or educational purpose. Accommodation for nuns residing in a convent for religious instruction and service was held to be integrally connected with the religious activity of the convent. Likewise, hostel accommodation for students, where such accommodation is necessary or integral to the educational institution and the students reside there to pursue their studies, was held to serve an educational purpose. The provision being a beneficial exemption, it was construed in a manner that furthers its object, and the wider context of the Act, including the separate treatment of residential buildings, supported that conclusion.

Conclusion: Buildings used for housing nuns in a convent and hostel buildings owned by educational institutions for their own students are eligible for exemption under Section 3(1)(b) of the Kerala Building Tax Act, 1975.

Final Conclusion: The exemption provision was held to cover buildings whose use is directly and integrally connected with religious or educational activity, and the State's challenge to the claimed exemptions failed except in the appeal where the assessee succeeded in obtaining relief.

Ratio Decidendi: A building qualifies for exemption under Section 3(1)(b) when its principal use has a direct and integral nexus with the exempt religious or educational activity, and a beneficial exemption must be construed purposively to give effect to its object.

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