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2017 (11) TMI 1955 - HC - Indian LawsExemption from Property Tax - Demand notice issued without any notice nor any opportunity of personal hearing to the petitioners - claim of the petitioner for exemption of property tax not placed before the Corporation Council for its approval - competent authority to consider the claim of exemption regarding the property tax - violation of statutory principles - Whether the petitioners-hospitals are eligible to be exempted from paying the property taxes as demanded by the respondent - Corporation, or not? - HELD THAT:- The impugned demand notices were issued by the respondent - Corporation in all these writ petitions claiming property tax from the petitioners - hospitals for various assessment years, but, however, the petitioners - hospitals contended that they, being hospitals, are purely exempted from paying property tax as per Section 122(e) of Madurai City Municipal Corporation Act, 1971 - The respondent - Corporation resisted the writ petitions disputing the character and status of the petitioners - hospitals as they are collecting exorbitant rent from the patients who were admitted and fees were also received for rendering service in the hospital and no service was rendered free of charge to whomsoever. The plea that they were collecting only a nominal charge from the poor, distressed, disabled and needy persons, based on their income was not true and no evidence was produced to that effect. Further, the exemption granted under Section 80-G of the Income Tax Act, would not, by itself, entitle the petitioners - hospitals to seek an exemption from the payment of property tax. When the respondent - Corporation relies upon not only the receipt of amount from the patients, but also the rent received towards Canteen and fees collected for parking the vehicles and other sources, whether those receipts would attract rent or not, has to be decided only by the assessing authority, at the instance of objection or revision by the owner of the building, even if they are charitable hospital and dispensaries. Without that process being resorted to, it may not be proper to quash the demand notice itself, assuming the receipt of the amount, by itself, would not amount to a rent. This Court holds that the benefit conferred under Section 122(e) of Madurai City Municipal Corporation Act, 1971, is not automatic, in view of the proviso to Section 122(e) of the Act and the only course available for the petitioners - hospitals is that on receipt of the demand notice, they are at liberty to either make an objection or file a revision enclosing the material to prove that they are entitled to exemption - Petition disposed off.
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