TaxTMI 
TaxTMI 
2011 (4) TMI 568
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....nning the SGRH, a charitable institution, since 1954. According to the Petitioner, it does not have any corpus fund and all the income and profit from the SGRH is invested for the development of the SGRH. Further, the GRTS does not get any grant from any authority. 3. It is stated that on 30th August 1977 the Directorate of Health Services ('DHS') of the Delhi Administration [now the Government of the National Capital Territory of Delhi (hereafter 'the GNCTD')] certified SGRH to be a charitable institution running a free out-patient department ('OPD') and having 90 free beds. The certificate further stated that the medical facilities were provided in the SGRH without distinction of caste, creed and religion. This certificate was reiterated on 23rd March 1983. The DHS certified that as per its records SGRH had 98 free beds and free OPD services, qualifying the institution as a charitable one, for the purposes of claiming customs duty exemption and grant-in-aid under the pattern of Government of India, MHFW. 4. On 1st March 1988 the Ministry of Finance, Government of India issued Notification No. 64 of 1988 granting customs duty exemption to hospitals satisfying the eligi....
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....ought related to the number of OPD and indoor patients treated free of cost in the SGRH up to 1999. On 31st August 2000 the Petitioner replied to the aforementioned letter dated 12th May 2000 in which it stated that the Petitioner had been able to locate some of the records. The Petitioner enclosed the details of equipments in respect of which the CDEC benefit had been availed of as Annexure-I. The details of the OPD as well as in-patients treated and those treated free at the SGRH during the years 1985 to 1999 was enclosed as Annexure-II and the details of beds speciality-wise and beds reserved for indoor patients pertaining to families with income less than Rs. 500/- per month was enclosed as Annexure-III. The Petitioner reiterated that the SGRH was a 500 bedded charitable hospital and that it had reserved 100 beds out of the total 500 beds for treatment of poor patients. 8. It is stated that the DGHS carried out a surprise inspection on 17th/18th January 2001. The Petitioner states that it was not at that stage given a copy of the inspection report and that without affording it an opportunity of being heard the DGHS passed an order dated March 16th 2001 withdrawing the CDE....
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....it petition, two affidavits were filed by the Trustees of GRTS and by its Assistant Secretary stating as follows : a. The SGRH collected from its consultants the total number of private patients treated by them. It also collected the number of private patients who visited the hospital on a sample basis in order to make a reasonable estimate of the total number of private patients treated by the consultants. b. The percentage of OPD patients treated free during 1988 to 2003 was as follows : (i) 100% of the OPD patients were treated free, if the General OPD patients of the hospital alone were considered; (ii) 73% to 85% of the OPD patients were treated free, if the total number of OPD patients was taken as the aggregate of (a) number of private patients as reported by the consultants and (b) general OPD patients of the hospital. (iii) 55% of the OPD patients were treated free, if the total number of OPD patients was taken as the aggregate of (a) number of private patients as collected by the hospital on sample basis; and (b) general OPD patien....
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.... General Health Services (for short 'DGHS') had withdrawn/canceled the exemption certificate given to the appellants from payment of customs duty on import of medical instruments in terms of Notification No. 64/88-Cus., dated 1st March, 1988 in violation of the principles of natural justice. Mr. Amarendra Sharan, learned Additional Solicitor General, after taking instructions, states that the impugned order of the High Court as well as DGHS be set aside and the case be remitted back to the DGHS to pass a fresh order in accordance with law after affording due opportunity to the appellants to put forth their point of view. That the appellants shall be supplied a copy of the inspection report carried out on 17th & 18th January, 2001. In view of the statement made by the learned Additional Solicitor General, these appeals are allowed; impugned orders of the High Court and DGHS are set aside and the case is remitted back to the DGHS to pass a fresh order in accordance with law after affording due opportunity to the appellants to put forth their case. All contentions are left open." 14. Thereafter on 6th December 2007 a fresh notice was issued to the Petitioner by the DGHS asking....
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....es of natural justice. 17. It is next submitted that the DGHS failed to appreciate that the SGRH has only one OPD and every patient who comes to the OPD is treated free. The SGRH provides cubicles/consultation rooms to enable doctors to attend to their private patients for which they charge consultation fee directly from such patients. The SGRH itself does not receive any payment from such patients. The model adopted by the SGRH satisfies the objective of providing free treatment both to the OPD as well as indoor patients as mandated by the Notification No. 64 of 1988 dated 1st March 1988. 18. It is submitted that SGRH's claim to be a charitable hospital was not made for the first time as erroneously observed in the impugned order. Reliance is placed on the certificates issued in 1977 and in 1983 by the DGHS certifying that SGRH was in fact a charitable hospital. In addition, a reference was made to a document of the DGHS which itself confirmed that for the years up to 1992 free treatment had been given to more than 40% OPD patients and a substantial number of indoor patients. The information provided by the Petitioner along with its letter dated 31st August 2000 was al....
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.... 31st August 2000 were not supported by any evidence to suggest that more than 40% of the OPD patients in SGRH were being given free treatment. Admittedly the SGRH also did not maintain any admission register or case sheets of patients treated free of cost. It is alleged that the Petitioner deliberately concealed the records of the paid OPD. The Petitioner's claim that the private doctors were charging consultation fee directly from the patients and that SGRH was not involved in the receipt of payment by the private doctors was contrary to the stand taken in an earlier representation dated 25th May 2001 wherein the Petitioner claimed that the Consultant doctors contributed 33% of their income for the development of the hospital. It is pointed out that the inspection carried out on 17th/18th January 2001 showed that despite running a paid OPD no records have been kept and even the patients attending the General OPD have to pay Rs. 10/- as registration charges. Although the consultation was provided free, the Petitioner's claim that the SGRH had treated more than 40% of its OPD patients free, was not correct. The admission register as well as the case sheets did not mention the incom....
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....emsp;The application filed by the Petitioner for obtaining the CDECs, a copy of which has been placed as Annexure P-6, states in column 2 : "hospital is run by a charitable trust and is recognized as a charitable hospital by Delhi Administration." The mere fact that the Petitioner gave particulars which would be relevant for exemption under para 2 of the Table appended to the Notification No. 64 of 1988 will not, in the opinion of this Court, act as an estoppel to prevent it from claiming the benefit of para 1 of the said Table. It is not possible to accept the plea that since the Petitioner did not claim this earlier, it would be precluded from doing so at a later point in time. What requires to be seen is whether in fact the Petitioner's claim to be a charitable hospital is sustainable or not. 23. It must be recalled that the enquiry into whether the hospitals that had imported equipments in terms of Notification No. 64 of 1988 had fulfilled the post-import obligations commenced long after the Notification itself was withdrawn. The inquiry was conducted only on account of certain directions issued by this Court in a public interest litigation that such enquiry commenced. Co....
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....advancement of medical relief. While determining whether an institution is philanthropic or not, three questions that may be asked are : (i) Is it run for unselfish motives? (ii) Is it for public in general? iii) Is it for general good? Since, we find that the answers to these three questions are in the affirmative and since we also find that the profit motive stood completely eliminated in the case of the assessee as per clause 10 of its memorandum and articles of association, we would hold that the assessee society was running a hospital solely for philanthropic purposes and not for purposes of profit." 25.  Then there is an enquiry report of the Committee headed by Justice A.S. Qureshi. The terms of reference of the said Committee were as follows : "(a) To review the existing free treatment facilities extended by the Charitable and other Hospitals who have been allotted land on concessional terms/rates by the Government. (b) to suggest suitable policy guidelines for free treatment facilities for needy and deserving patients uniformly in the beneficiary in....
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....Those figures cover the period from 1985-89. This is reiterated in a letter dated 25th May 2001 after the Respondent DGHS withdrew the CDECs by its letter dated 16th March 2001. 29. As regards the contemporaneous record of the number of OPD patients treated free, the letter dated 21st July 1992 from the Delhi Administration to the DHS forwarding the application from the SGRH for customs duty exemption in regard to six different equipments is instructive. The said forwarding letter certifies as under : "2. The institution provided free OPD to all patients reporting in OPD. Year-wise figures are as follows : 1987 : 2,02,361 1988 : 2,13,875 1989 : 2,26,797 3. Indoor treatment facilities are provided free of cost to all families with income of less than Rs. 500/- per month. For this purpose 49 beds reserved, out of total 498 beds which is not less than 10% of total bed strength of the hospital/institution." 30. The above letter was placed on record before this Court by the DGHS itself It is not clear whether there was any correspondence between the Delhi Administration a....