TMI Blog2011 (4) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... clear whether there was any correspondence between the Delhi Administration and the DGHS in that behalf The DGHS obviously accepted the certification by the DHS. Considering that this is a letter of 21st July 1992 and relates to the figures of 1987 to 1989, there is no reason why the DGHS should disbelieve it. - This Court is satisfied upon an examination of the said affidavit of the trustees that there was substantial compliance with the spirit and objective of Notification No. 64 of 1988 by SGRH during the period that the said Notification was in force. Therefore, the Petitioner should be held to have satisfied the requirements of para 2 of the Table appended to Notification No. 64 of 1988. - Benefit of exemption allowed - Decided in favor of assessee. Mere suspension of license, in the facts of the present case, would be wholly unjustified. Ordinarily, matters of discipline lie in the realm of the competent authority i.e., the Commissioner of Customs who is best placed to understand the importance of the CHA in a customs area, and the trust and confidence reposed on him by the customs department. - he punishment imposed on the respondent, by the Commissioner of Customs, of rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds. 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 eligibility criteria indicated therein in respect of equipment imported for the treatment of patients. The categories of hospitals that could avail exemption in terms of the said notification were : (a) charitable hospitals; and (b) hospitals that provide medical surgical or diagnostic treatment (i) free on an average, to at least 40 per cent of all their outdoor patients, and (ii) free to all indoor patients whose family income is less than rupees five hundred per month, and keeping 10 per cent of all the hospital beds reserved for such patients. 5. The Petitioner states t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milies 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 CDECs granted to the Petitioner. It was observed in the said order that the infomation furnished by the Petitioner was not sufficient. The inspection had revealed that the SGRH was running a paid OPD facility for which no records had been kept. The investigations done in the paid OPD were much more than the patients attending the General OPD. All patients attending the General OPD had to pay Rs. 10/- as registration charges. Although the consultation provided was free, the claim of SGRH that it had given free treatment to 40% of its OPD patients was not correct. The admission register as well as the case sheets did not mention income of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 patients of the hospital. (iv) Similarly, more than 40% of the investigations were free even after taking into account the number of investigations done for private patients during the last six years i.e. 1998 to 2003, since the notification laid down as a requirement on an average such free treatment. (v) During 1988 to 2003, percentage of indoor patients treated free was ranging between 17.5% to 20.38% as against the requirement of only 10%. (vi) During 1998 to 2003, percentage of indoor patients transferred from paying wards to general ward was negligible and was ranging between 0.42% to 0.67%. 12. In the affidavit filed by the trustees, it was sought to be explained that GRTS had evolved a separate Model for achieving the twin purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 it to explain why the CDECs issued should not be withdrawn. On 20th December 2007 a letter was written to the DGHS by the Petitioner asking for a copy of the inspection report dated 17th/18th January 2001. After the receipt of the copy of the report the Petitioner submitted a detailed reply on 26th March 2008. It was submitted that the SGRH should be considered to be a charitable hospital under para (1) of the Table appended to the Notification 64/88. Alternatively, it was submitted that the SGRH in any event complied with the requirements of para (2) for availing of the customs duty exemption. 15. By the impugned order dated 28th August 2008 the DGHS reiterated its earlier order dated 16th March 2001. It was inter alia observed that the CDEC Committee had considered the request of the Petitioner to re-categoris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 also referred to. It is submitted that the Committee chaired by Justice A.S. Qureshi that was constituted to review the existing free treatment facilities extended by charitable and other hospitals who had been allotted land on concessional terms/rates by the Government observed that the SGRH was a charitable hospital. Reference was also made to an order of the Income-tax Appellate Tribunal (ITAT) upholding the claim of the SGRH to be a charitable hospital. Mr. Maninder Singh submitted that although the land on which the SGRH stood, did not fall in the category of land allotted on concessional rates, the observations of the aforesaid Committee were relevant for the purposes of the present case. It was submitted that in any event Notification No. 64 of 1988 stood withdrawn with effect from 1st March 1994, and there was no need to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 income of the patients and, therefore, it was not possible to verify whether the SGRH treated free all its OPD patients. The claim that 100 General Ward beds were free beds, was not found to be true since no bed was found to be earmarked for the patients whose income was less than Rs. 500/- per month. It was submitted that the withdrawal of Notification No. 64 of 1988 with effect from 1st March 1994 would not affect the liability of the Petitioner from fulfilling the post-import conditions. As regards the decision of this Court in R.G. Stone Urological Research Institute v. Union of India (supra), it is stated that it is pending in appeal before the Division Bench. Reliance is placed on Jaslok Hospital Research Centre v. Union of India (supra), Medical Relief Society of South Kanara, Manipal, Dakshina Kannada v. Union of India, 1999 (11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether 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. Consequently, many hospitals that had imported such equipments were required to produce records from 1985 onwards. Some of them might have preserved those records. But many may not have. This inevitably led to litigation with the Respondents insisting on the hospitals producing proof of having satisfied the post-import obligations. In the circumstances, if at the stage of producing such proof any hospital claims that it should have been treated even to begin with as a charitable hospital such plea ought to be examined by the Respondents and not brushed aside only on the ground that such a plea was not raised earlier. 24. The order dated 8th February 1984 of the ITAT in respect of the Petitioner for the assessment year 1979-80 is, in the context of the present case, relevant. It sets out the figures of free services rendered to the patients of the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itable 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 institutions in particular to specify the diagnostic, treatment, lodging, surgery, medicines and other facilities that will be given free or partially free. (c) To suggest a proper referral system for the optimum utilisation of free treatment by deserving and needy patients. (d) To suggest a suitable enforcement and monitoring mechanism for the above including a legal framework. 26. The Committee observed that very few of the hospitals in Delhi were providing free medical services. It observed but now very few of them are genuinely charitable or social service institutions, such as Sir Ganga Ram Hospital, Batra Hospital, etc. It further observed that some charitable hospitals provide good free treatment facilities for needy and deserving patients, such as Sir Ganga Ram Hospital, Batra Hospital etc. At this point in time several years after the import of the equipments and several years after the Notification No. 64 of 1988 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the DGHS itself It is not clear whether there was any correspondence between the Delhi Administration and the DGHS in that behalf The DGHS obviously accepted the certification by the DHS. Considering that this is a letter of 21st July 1992 and relates to the figures of 1987 to 1989, there is no reason why the DGHS should disbelieve it. 31. The impugned order passed by the Respondents reiterating the earlier order dated 16th March 2001 does not advert to the detailed representation made on 26th March 2008 by SGRH. The affidavit of the trustees filed in the earlier writ petition being W.P. (C) 5303-04 of 2004 pursuant to an order dated 12th April 2004, the relevant portions of which have been extracted hereinbefore, have also not been discussed in the impugned order. It was necessary for the Respondents to have considered whether the Model of free treatment provided in the OPD and to indoor patients by the SGRH served the object and spirit of the Notification No. 64 of 1988. The Respondents were also required to account for the fact that an examination of the compliance of the conditionalities in para 2 of the Table was being undertaken long after the Notification No. 64 of 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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