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TMI Blog2017 (11) TMI 1955X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner is the Chairman of Velammal Educational Trust, which runs Velammal Hospital and Medical College in 140 acres. According to the petitioner, 10 lakhs patients from rural areas as well as 3 lakhs patients from urban areas were given treatment for very lower price in the past three years. 2.3. In the petitioner's hospital, the patients are being treated with modern equipments as well as rare medicines are being supplied to them with discounts upto 30%. World class treatment is being given to the patients who are below the poverty line. 2.4. The petitioner further stated that Velammal Educational Trust and Velammal Hospital and Medical College have been established with a motive to help the poor and the needy students and patients in the society. 2.5. The fourth respondent has assigned the petitioner Trust the property tax assessment No. 395496. 2.6. The petitioner made a representation dated 05.07.2016 to the fourth respondent mentioning about the exemption granted to the petitioner Trust and the Medical College under the law. 2.7. Though the petitioner Trust and the Medical College are exempted from levying property tax, the fourth respondent issued the impugned demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The claim of the petitioner for exemption of property tax has not even been placed before the Corporation Council for its approval. 3.9. The third respondent is not a competent authority to consider the claim of exemption regarding the property tax and thus, the impugned order is vitiated in the eye of law. 3.10. Therefore, W.P(MD) Nos. 14517 and 14518 of 2016 have been filed. 4. The crux of the arguments advanced by Mr. Niranjan S. Kumar, learned Counsel for the petitioner in W.P(MD) Nos. 14508 to 14510 of 2016 and Mr. S. Ramesh, learned Counsel for the petitioner in W.P(MD) No. 14517 and 14518 of 2016, could briefly be stated thus: 4.1. It is the prime contention of the petitioners that the impugned demand notices came to be issued without giving any notice nor any opportunity of personal hearing to the petitioners and further, the impugned notices were issued in violation of statutory principles, as the statute grants exemption from levying property tax to the hospitals and the Charitable Institutions; 4.2. The act of respondents in levying property tax to the petitioners -hospitals, is illegal and without any basis and thus, it would exhibit non-application of mind on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . State of Maharashtra reported in 2004 (0) Supreme (Mah) 1488. (v) St. Mary of Leuca English Medium School v. Deputy Director of Panchayat reported in 2006 (3) KLT 760. (vi) Govel Trust running Aravind Eye Hospital at Avanashi Road, Coimbatore, rep. by its Secretary v. The Government of Tamil Nadu reported in 2009 (0) Supreme (Mad) 300. (vii) Coimbatore Masonic Charity Trust v. Corporation of Coimbatore reported in (2010) 8 MLJ 643. (viii) Unity Hospital (P) Ltd. v. State of Kerala and others reported in 2011 (1) ILR (Ker.) 19. (ix) Gokula Education Foundation (Medical) and another v. Bruhath Bangalore Mahanagara Palike and others reported in 2012 (0) Supreme (Kar) 405. 6. Whereas Mr. S. Ramesh, learned Counsel for the petitioner in W.P(MD) Nos. 14517 and 14518 of 2016, placed reliance on the following decisions: (i) Dadi Jagannadham v. Jammulu Ramulu and others reported in (2001) 7 Supreme Court Cases 71. (ii) Nasiruddin and others v. Sita Ram Agarwal reported in (2003) 2 Supreme Court Cases 577. (iii) Vemareddy Kumaraswamy Reddy v. State of A.P reported in (2006) 2 Supreme Court Cases 670. (iv) The Special Officer and Commissioner, Tiruchirappalli Corporation, Tiruchir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re also received for rendering service in the hospitals. 7.10. The petitioners - hospitals had also rented out a portion of the premises to run canteen and collecting parking fees for the vehicles parked in the premises and therefore, the petitioners - hospitals are not entitled to the exemption under Section 122(e) of the Act automatically. 7.11. Hence, the petitioners - hospitals cannot claim the benefit under Section 122(e) of Madurai City Municipal Corporation Act, 1971. 7.12. The petitioners - hospitals are provided with amenities, such as, road and other facilities, but they refused to pay the property tax to the respondent - Corporation. 7.13 Thus, the learned Additional Advocate General appearing for the respondent - Corporation prayed for the dismissal of these writ petitions. 8. In support of his contentions, he placed reliance on the following decisions: (i) Indian Chamber of Commerce v. C.I.T reported in (1976) 1 Supreme Court Cases 324. (ii) Grasim Industries Ltd. v. State of M.P reported in (1999) 8 Supreme Court Cases 547. (iii) Special Officer and Commissioner, Tiruchirappalli v. Hindu Mission Hospital reported in (2008) 4 MLJ 816. (iv) Commissioner of Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the respective amounts in respect of the half-years concerned. Thus, the petitioners - hospitals are before this Court. 14. 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. 15. In S.N.R. Sons Charitable Trust, Coimbatore v. Commissioner, Coimbatore City Municipal Corporation, Coimbatore reported in (1993) 10 WLR 769, the scope of exemption from the payment of property tax with reference to the building owned as buildings and lands of charitable hospitals and dispensaries not including the residential quarters attached thereto mentioned und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is automatic or not. 19. To make the proviso effective and operative, on raising of the demand, if the respondent Hospital is entitled to any exemption, by virtue of Section 123(e) of the said Act, the only mechanism available for them is to approach the respondent - Corporation, satisfy them that they are entitled to exemption under section 123(e) of the said Act, as the proviso made it very clear that such exemption is not automatic because nothing contained in clause (a) (c) and (e) shall be deemed to exempt from payment of property tax. 20. Therefore, 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. 21. In Municipal Corporation of Coi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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