Charitable hospital property tax exemption requires factual verification, not automatic relief, before the municipal authority decides entitlement.

Charitable hospitals are not entitled to automatic exemption from property tax under Section 122(e) of the Madurai City Municipal Corporation Act, 1971; the exemption depends on factual verification by the assessing authority, including whether the proviso applies where rent is payable by users. Charges collected from patients do not by themselves amount to rent, but receipts from patients and other income such as canteen and parking collections must be examined on the materials furnished by the assessee. The proper course is for the institution to file objections or revision with supporting evidence, after which the Corporation must inspect the premises and decide the exemption claim in accordance with law. Demand notices are not to be quashed straightaway on the assumption of automatic exemption.

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Issues: Whether charitable hospitals were entitled to automatic exemption from property tax under Section 122(e) of the Madurai City Municipal Corporation Act, 1971, and whether the demand notices could be quashed straightaway without the petitioners first pursuing objection or revision before the Corporation.

Analysis: Section 120 empowers levy of property tax subject to statutory exemptions, while Section 122(e) exempts charitable hospitals and dispensaries, but the proviso makes the exemption unavailable where rent is payable by the users of the premises. The fact that hospitals receive charges from patients does not, by itself, amount to rent, but the entitlement to exemption is not automatic. Where the Corporation relies upon receipts from patients and other collections such as canteen and parking income, the question whether the premises fall within the exemption has to be examined by the assessing authority on the materials furnished by the assessees. The appropriate course is to permit the hospitals to submit objections or revision with supporting evidence, after which the Corporation must inspect the premises and pass orders in accordance with law.

Conclusion: The hospitals were not entitled to immediate quashing of the demand notices on the ground of automatic exemption; they were relegated to the statutory remedy before the Corporation, and the demand was kept open for fresh consideration.

Final Conclusion: The writ petitions were not allowed on merits of exemption, but were disposed of by preserving the petitioners' right to seek exemption before the Corporation and by directing interim payment of part of the demand.

Ratio Decidendi: Exemption from property tax under the charitable-hospital clause operates only after the competent authority verifies the factual entitlement on the basis of a proper objection or revision, and it is not automatic merely because the institution is a hospital or charitable trust.

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