Charitable hospital tax exemption required fresh consideration where departmental recognition and factual verification supported the claim.

Municipal tax exemption for a charitable hospital depended on satisfaction of the statutory conditions for charitable status and factual verification of the trust's character and the use of patient receipts. The court noted that later recognition by the Income-tax Department supported the exemption claim, and the existing demand could not be sustained without reconsidering those materials. The impugned order was therefore set aside and the matter remitted for fresh decision on the exemption claim.

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Issues: Whether the petitioner was entitled to exemption from municipal tax as a charitable hospital, and whether the impugned demand required to be set aside and the matter remitted for fresh consideration.

Analysis: The claim for exemption turned on whether the hospital satisfied the statutory conditions for charitable status and whether the later approval granted by the Income-tax Department supported that claim. The record showed that the petitioner had obtained recognition from the income-tax authorities and that the exemption question depended on factual verification of the trust's charitable character and the use of receipts collected from patients. In these circumstances, the existing demand could not be finally sustained without reconsidering the exemption claim in light of the departmental approval and the relevant factual materials.

Conclusion: The petitioner was entitled to reconsideration of its exemption claim, and the impugned order was set aside with a direction to pass a fresh order on remand.

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