Strict proof of charitable hospital status is required for municipal property-tax exemption; limited free treatment and patient fees defeated the claim.

Municipal property-tax exemption for a hospital requires strict proof that it falls within the statutory category of a charitable hospital and that the exemption conditions are actually met. The Court held that wider tax-law notions of charity were insufficient where the hospital collected room rent and patient fees, kept no convincing records of substantial free treatment, and showed concessional care only for a limited percentage of patients. An earlier municipal resolution could not override the statute. The hospital was therefore not entitled to exemption from property tax.

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Issues: Whether the respondent hospital was a charitable hospital entitled to exemption from property tax under Section 86(e) of the Tamil Nadu District Municipalities Act, 1920 and Section 123(e) of the Coimbatore City Municipal Corporation Act, 1981.

Analysis: The claim for exemption depended on proof that the institution fell within the statutory expression "charitable hospitals and dispensaries". The materials showed that the hospital collected room rent and fees from patients, maintained no convincing records to establish that a substantial part of its services was rendered free of charge, and had itself indicated that concessional treatment extended only to a limited percentage of patients. The Court also distinguished the wider concept of charity under the Income-tax Act, 1961 and the discretionary exemption under the Customs Act, 1962 from the narrower municipal property-tax exemption. The earlier municipal resolution granting exemption did not bind the Corporation when the statutory requirements were not satisfied.

Conclusion: The respondent hospital was not proved to be a charitable hospital within the meaning of the municipal statutes and was not entitled to property tax exemption.

Ratio Decidendi: For municipal property-tax exemption, the assessee must strictly establish that it squarely falls within the statutory category of a charitable hospital and that the conditions for exemption are actually satisfied; wider tax-law notions of charity and mere charitable objects are insufficient where the institution collects rent and fees and does not prove substantial free treatment.

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