Property tax exemption for charitable hospital preserved: patient service charges were not treated as rent.

Hospital charges, bed charges and allied service fees collected from patients were held not to constitute "rent" under the proviso to Section 123(3) of the Coimbatore City Municipal Corporation Act. The court reasoned that property tax is assessed on annual value with reference to gross annual rent, but the exemption for charitable hospitals is denied only where rent is payable for the premises. Itemised payments for treatment, medicines, tests, nursing, maintenance and utilities did not create a landlord-tenant relationship or a demise of the premises. The hospital therefore remained entitled to property tax exemption, and the denial of exemption was unsustainable.

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Issues: Whether hospital charges, bed charges, and allied service charges collected from patients constituted "rent" within the proviso to Section 123(3) of the Coimbatore City Municipal Corporation Act so as to deny exemption from property tax to a charitable hospital.

Analysis: The scheme of property tax under the Act is based on annual value, which is computed with reference to gross annual rent at which the building may reasonably be expected to let. The exemption for charitable hospitals under Section 123(e) is qualified by the proviso only where rent is payable by the person using the premises. The charges recovered from patients were itemised charges for treatment, medicines, tests, bed, nursing, maintenance, electricity, water, and other services, and did not evidence a demise of the premises or creation of a landlord-tenant relationship. In the context of the Act and the manner in which rent is used for property taxation, the term cannot be given a wide meaning to include hospital service charges. The payments made by patients were not rent in the strict legal sense.

Conclusion: The hospital charges were not rent, and the charitable hospital remained entitled to exemption from property tax.

Final Conclusion: The denial of exemption was unsustainable, and the writ appeal was allowed with costs, restoring the appellant's claim to property tax exemption.

Ratio Decidendi: For purposes of a property-tax exemption proviso, "rent" means payment made by a tenant to a landlord for demised premises and does not include charges paid for medical treatment and related hospital services.

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