TaxTMI 
TaxTMI 
2018 (3) TMI 1332
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.... of the good medical care given, as a result of which facilities were improved to provide their better treatment to all, who come to the hospital especially, women and children. The District Collector, Coimbatore on inspecting the hospital and perusing the records has issued a certificate dated 12.01.1983, to the effect that the petitioner's hospital is a 'Charitable Institution'. Once again an inspection was conducted and the District Collector, Coimbatore issued a certificate dated 17.07.1986, permanently certifying the hospital as a Charitable Institution. Based on these certification, the petitioner enjoyed exemption from payment of property tax in terms of Section 83(1)(a) of the Tamil Nadu District Municipalities Act, 1920. 3.After the Coimbatore city became a Corporation, the Tamil Nadu Act 25 of 1981 was enacted and the petitioner's hospital was assessed to property tax and they were compelled to pay property tax at the rate of Rs. 8,924/- per half year. In spite of the petitioner stating that they enjoyed exemption under the Tamil Nadu District Municipalities Act, they are unable to pay property tax, their request was not considered and a communication was....
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....re City Municipal Corporation Act. 6.In any event, the petitioner had complied with the direction issued by the Taxation Appellate Tribunal and filed a petition for exemption. Though the respondent-Corporation was a party to the order passed by the Tribunal, they did nothing on the application for exemption and after about 14 years, the impugned demand has been passed. If only the Tribunal had the power to punish the respondent, it is a fit case where stringent punishment should be given. Unfortunately, such power had not been conferred on the Tribunal. 7.The issue as to how the claim for exemption has to be considered was dealt with by this Court in the case of Sundaram Medical Foundation, vs. The Commissioner Corporation of Chennai & others reported in CDJ 2017 MHC 5265. In the said case also, it was a hospital, claimed to be doing charitable activity and the land on which the hospital has been constructed was given by the Government at a concessional rate. At this juncture, it would be relevant to take note of certain earlier judgments, which were referred to in the case of Sundaram Medical Foundation (supra): 16. Having steered clear of the statutory and factual position an....
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....herefore cannot be permitted to take advantage of Section 123(e) of the Coimbatore City Municipal Corporation Act (in para materia with section 101(e) of the CMCC Act). The Writ Petition was dismissed, against which the appeal was preferred. The Hon'ble Division Bench, while allowing the appeal pointed out that from the manner in which, the charges have been collected under different heads, it is difficult to hold that such charges have been paid by way of rent by the patients visiting the hospital for the purposes of treatment. That the amounts paid by the patient cannot be equated or treated as 'rent', but represent charges paid for all the services rendered under different heads and these payments cannot on the facts and circumstances of the case be regarded as payment of rent by the patients. Further noting that the word 'rent' has not been defined in the said Act, the intention of the legislature was that question should be decided on consideration of facts of each case when a controversy over it arose. Therefore, it was held that the meaning of the word rent has to be gathered from Section 117 of the said Act, which falls in chapter V relating to Taxation ....
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....rictly conform to the requirements of what is understood as 'charity' and a 'charitable' act. Therefore, while considering the question whether a hospital or a dispensary is a charitable hospital/dispensary or not, what is required to be considered is as to what is the object of establishing such a hospital/dispensary and as to how it is being run and what is the purpose of its continued existence whether it is meant to relieve the hardship and extends medical facilities to the poor and the needy or it is meant to oblige the rich and the affluent who do not require any financial assistance in the form of free medical treatment or it is being run as a commercial venture; and whether such hospital/dispensary has been established and is being continued to support the needs of any particular caste or a religious faith. In my view, three conditions, which are required to be satisfied to get the benefit of exemption under Section 110(e) of the Act are, (1) the doors of such hospitals/dispensaries should be always kept open to all persons irrespective of any caste, creed, religious faith or sects; (2) such persons should be poor, needy and deserving persons who, on account....
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....tients who require medical treatment and that too, with the high degree of competency and proficiency and infrastructure developed with all the modern facilities established. For this, one of the modes of raising funds could be by making available some portion of the facilities available in the hospital to affluent and the rich patients and charging them for the services and the treatment given to them. Therefore, if the object of establishing and running a hospital and its continued existence, is to give medical aid to the poor and the deserving either totally free or to a large extent subsidised, if such a hospital collects substantial charges from the affluent and rich patients put of some portion of the facilities available in the hospital extended to them, in my view, as observed earlier, such hospitals and dispensaries cannot be considered as not charitable hospitals and dispensaries. ................. 24. As pointed out in Society of Jesus (supra), the funds generated by the Hospital by charging patients can be utilized for the benefit of the poor and deserving patients and thus would not mean that if an additional income is earned in a particular year, it cannot b....
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....he amounts paid by the patients, who use the hospital as well as the range of services provided by it, cannot be regarded as 'rent' paid by them in the narrower sense in which it is intended under the provisions referred to earlier." 9. On perusal of the entire material available on record and after going through the counter affidavit and the reply affidavit, in my view, this is a fit case, where the entire issue has to be reconsidered by the respondent and the petitioner is also bound to produce all documents in support of their claim as well as such those documents called for by the respondent. Further, if such records are not available to the petitioner or if they claim privilege to such documents, it is always open to them to take such a stand, but the essential documents to prove their charitable activity is required to be produced. Further, the respondent is also required to conduct an inspection of the premises to satisfy themselves as regards of nature of activity carried on in the premises. 10. In the result, the writ petition is allowed, the impugned order is set aside and the matter is remanded to the respondent for fresh consideration. The petitioner is gra....