Charitable property tax exemption depends on statutory scope and genuine public-service use, not fees alone.

Charitable-hospital property tax exemption under Section 123(e) was confined to genuinely charitable medical activity: a department forming an integral part of the hospital and using fee income to support free or subsidised care remained eligible for exemption. The collection of fees did not by itself negate charitable character where the revenue sustained public-service medical work. By contrast, after the 1994 amendment, the college buildings did not fall within Section 123(c) on the facts presented, so exemption was unavailable for those premises. The governing principle was that exemption must match the specific statutory category as amended, even where the educational institution had charitable features.

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Issues: (i) Whether the petitioner's Community Health and Development Department was entitled to exemption from property tax as part of a charitable hospital under Section 123(e) of the Coimbatore City Municipal Corporation Act, 1981; (ii) Whether the college buildings were entitled to exemption from property tax under the post-amendment scheme of Section 123(c) of the Coimbatore City Municipal Corporation Act, 1981.

Issue (i): Whether the petitioner's Community Health and Development Department was entitled to exemption from property tax as part of a charitable hospital under Section 123(e) of the Coimbatore City Municipal Corporation Act, 1981.

Analysis: The exemption for charitable hospitals depends on whether the institution is genuinely charitable in character and whether its activities are directed to medical relief and public service. The collection of fees from those able to pay does not by itself destroy the charitable character if the revenue is used to sustain free or subsidised medical services. The Department was found to be an integral part of the hospital and to carry on charitable medical work both within and outside the hospital.

Conclusion: The Community Health and Development Department was held entitled to exemption from property tax.

Issue (ii): Whether the college buildings were entitled to exemption from property tax under the post-amendment scheme of Section 123(c) of the Coimbatore City Municipal Corporation Act, 1981.

Analysis: After the 1994 amendment, the statutory language no longer supported exemption for the college buildings on the facts presented. Although the educational institution had charitable features and modest fee structures, the Court held that the amended provision did not permit exemption for the college buildings in the manner claimed. The distinction drawn was between a service-oriented teaching hospital and educational institutions where the dominant object may differ.

Conclusion: The college buildings were held not entitled to exemption from property tax.

Final Conclusion: The challenge succeeded only in part, with exemption granted for the charitable hospital component but refused for the college buildings.

Ratio Decidendi: A fee-earning institution may still qualify as charitable where the revenue is deployed to sustain genuine charitable activity, but exemption must be confined to the statutory category actually covered by the governing provision as amended.

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