Property tax exemption for charitable hospital must be reconsidered after municipal reclassification and fresh factual review.

A charitable hospital that had earlier been treated as exempt from property tax under the Tamil Nadu District Municipalities Act could not be denied consideration of that exemption merely because the area later came within Corporation limits. The Court noted that the Corporation had acknowledged the earlier exemption, and held that the exemption claim had to be examined on the basis of the institution's charitable character, the materials produced, and the actual use of the property. The authority was required to inspect the premises, consider the documents and representations, and decide the claim afresh in a holistic manner. The impugned demand was set aside and the matter remitted for fresh consideration.

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Issues: Whether the petitioner, a charitable hospital earlier treated as exempt from property tax under the Tamil Nadu District Municipalities Act, was entitled to have that exemption considered and continued after the area was brought within the Corporation limits, and whether the impugned property tax demand could be sustained without a fresh examination of the exemption claim.

Analysis: The petitioner had been recognised as a charitable institution and had earlier enjoyed exemption from property tax under the District Municipalities Act. The demand was raised after reclassification of the area under the Corporation regime, but the record showed that the Corporation itself had acknowledged the earlier exemption. In such circumstances, the change in municipal status could not, by itself, deprive the petitioner of the benefit already enjoyed. The claim for exemption had to be examined on the basis of the charitable nature of the institution, the materials produced, and the actual use of the property. The proper course was for the authority to inspect the premises, consider the documents and representations, and decide the exemption claim afresh in a holistic manner.

Conclusion: The impugned demand was not allowed to stand and the matter was remitted to the Corporation for fresh consideration of the petitioner's claim for exemption in accordance with law.

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