Charitable hospital property tax exemption upheld despite nominal patient charges where the institution remained genuinely charitable.

A charitable hospital does not lose property tax exemption merely because it collects nominal charges from some patients, where the institution remains genuinely charitable and the collections are used for treatment and expansion of medical facilities. The Madras HC noted that the trust was a public charitable trust, its objects were charitable, and similar exemption had already been recognised for its other hospitals. As the statute exempts buildings and lands belonging to charitable hospitals and dispensaries, the refusal to extend the benefit to the Coimbatore and Salem hospitals lacked a sufficient basis and was unsustainable.

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Issues: Whether the petitioner-Trust's hospitals and lands were entitled to exemption from property tax as charitable hospitals and dispensaries under Section 123(e) of the Coimbatore City Municipal Corporation Act, 1981.

Analysis: The Trust was found to be a public charitable trust with objects falling within charitable purpose. The hospitals had already been granted exemption in respect of other locations, and similar objections had earlier been rejected in proceedings concerning the same Trust, with those decisions upheld. The fact that the Trust collected nominal charges from some patients did not alter the charitable character of the institutions, since the collections were explained as being used for treatment expenses and expansion of medical facilities. The Court also noted that the statute grants exemption to buildings and lands belonging to charitable hospitals and dispensaries, and the respondent had no sufficient basis to treat the Coimbatore and Salem hospitals differently from the Trust's other hospitals.

Conclusion: The petitioner-Trust was entitled to exemption from property tax for the hospitals in question, and the refusal orders were unsustainable.

Ratio Decidendi: A charitable hospital does not lose the statutory benefit of property tax exemption merely because it collects nominal charges from some patients, where the institution remains genuinely charitable and the levy is otherwise covered by the exemption provision.

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