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TMI Blog2018 (3) TMI 1289X X X X Extracts X X X X X X X X Extracts X X X X ..... on should take note of all the above observations how the Courts have approached the matter what other statute say and then examine the plea of the petitioner. Though the petitioner seeks for a positive direction to grant exemption, such relief cannot be granted in a Writ Petition under Article 226 of the Constitution of India, as it requires thorough and deep scrutiny of the various documents and records that the petitioner will produce. Therefore, necessarily matter has to be remanded to the respondent corporation for fresh consideration. Petition allowed by way of remand. - W.P.No.13489 of 2017 W.M.P.No.14561 of 2017 - - - Dated:- 8-8-2017 - T. S. Sivagnanam, J. For Petitioner : Mr. Srinath Sridevan. For Respondents : Mr. K.Venkataramani, Mr.P.V.Selvakumar. ORDER The Petitioner is a Trust created under the Declaration of Trust, dated 29.11.1990, with an object to provide medical relief and facilities to the poor and needy irrespective of caste, creed and religion either free of cost or at concessional rates and to others on such terms and conditions, but not for the purpose of profits. Thus, the Trust has been created as a Public Charitable Trust. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the first respondent to reconsider the matter on merits and pass fresh orders within a time frame. Once again, the claim for exemption was rejected, by order dated 27.01.2009, which was challenged by the petitioner in W.P.2383 of 2009 and the said Writ Petition was allowed by order dated 12.01.2015, directing the first respondent to examine the claim for exemption in accordance with the judgment in MTA No.21 of 2006. Pursuant to the said order, the second respondent by communication dated 19.03.2015, directed the petitioner to appear for a personal hearing with all records. The petitioner is stated to have appeared before the second respondent on 06.04.2015, during which the petitioner was asked for the list of beneficiaries for the year 2014-15, which were furnished by the petitioner on 21.04.2015, followed by a further representation, dated 23.04.2015, enclosing photographs etc. The petitioner vide their letter dated 04.05.2015, enclosed a copy of the trust deed and the order of exemption granted under the Income Tax Act, 1961. Thereupon, the second respondent adjourned the enquiry to 11.05.2015, which was cancelled and re-fixed on 23.06.2015, to examine the list of beneficia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e light of the order passed in MTA No.21 of 2006. Once again, by an order dated 27.01.2009 without adhering to the directions issued in MTA No.21 of 2006, the claim for exemption was rejected, and the petitioner challenged the same by filing a Writ Petition which was allowed with a direction to consider the matter afresh. After the matter was remanded for the third time, the second respondent directed the petitioner to appear for a hearing and the petitioner co-operated with the proceedings and produced all the documents and details called for by the respondent including the deed of Declaration of Trust, dated 29.11.1990, the registration granted under Section 12A of the Income Tax Act, 1961 etc. Though the petitioner had produced all these voluminous records, the first respondent did not consider the application, but the second respondent has passed the order and there is nothing on record to suggest that the second respondent has been delegated with the powers to consider the petitioner's application for exemption and while passing the impugned order, the second respondent did not consider any of the aspects and rejected the claim solely on the ground that the petitioner is g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once again challenged by the petitioner in W.P.No.2383 of 2009 and a direction was issued and in compliance with the direction, personal hearing was conducted on 06.04.2015 and 21.04.2015, and a joint inspection was made by the Revenue officials and after duly considering the petitioner's claim, final orders were passed. It is further submitted that the petitioner has not paid property tax from the first half year 2008-09 and the total amount payable by the petitioner is more than ₹ 1,00,00,000/-. It is further submitted that the respondent corporation carrys out welfare measures for the general public in the city based on the revenue generated out of the property tax and if the arrears runs to crores of rupees, it will put the respondent Corporation in financial difficulty. 10. The learned Additional Advocate General referred to the counter affidavit and the additional counter affidavit filed by the third respondent and after referring to the conditions imposed in G.O.Ms.No.460, dated 10.04.1992, submitted that the respondent Corporation has not exempted any of the hospital within the Chennai City limits, from payment of property tax under section 101 (e) of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of exemption from property tax. In the instant case, the Government, on a request made by the petitioner trust, alloted land measuring an extent of 2542sq ft in survey No.4/2 block No. 9C of Naduvakkarai village, for setting up a hospital. The Government Order in G.O.Ms.No.640, states that the Government have examined the request of the petitioner and was satisfied that the allotment of the land to the institution in question will subserve common good. Therefore, the Government accepted the recommendation of the Allotment Committee and issued an order under Section 24(1) of the Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978, subject to certain conditions. Conditions which would be relevant for the purpose of this case are condition nos.2 and 3 which reads as follows: ii) The foundation shall provide free treatment to 30% of the out patients; iii) The foundation shall also provides free treatment to inpatients belonging to poor families and for this purpose to reserve 25% of the total number of beds for such patients. 14. Thus the land which was declared as a surplus at the hands of the original owner and vested with the government was allotted by the government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nicipalities Act with effect from 01.04.1977, excluding the office, canteen, Doctors' residential quarters and Nurses quarters, for which separate assessment was made. This position continued till 30.09.1980, when a special notice, dated 31.03.1981, was issued to the appellant therein proposing to revise the earlier assessment with half year commencing from 01.10.1980, revising the annual value. The appellant referred to the exemption which was granted to them from property tax for the period from 01.10.1980 to 31.03.1982 and also referred to the grant of exemption under section 80 (g) of the Income Tax Act as well as exemption from payment of Urban Land Tax Act and a certificate from the District Collector to the effect that the hospital was run by them, was doing charitable and relief work and 40% of the outpatients cases are treated completely free of charges and even for inpatients whose income was less than ₹ 300/- were given free accommodation, bed and linen, medical and nursing care including investigations, medicines, operations and diet. Therefore, it was contended that they are justified in seeking exemption. However, no orders were passed but the respondent dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 123 of the said Act. 18. With reference to buildings falling under clause (e), it was pointed out that there is a possibility of the place being made available for use by others on payment of rent for such an event, the benefit of exemption may not be available. With regard to the Hospital, if it is let out to others on rent, exemption is not available. In the said case, the 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. Finally, it was held that the payment made by the patients to the hospital by way of hospital charges, or stoppages or even service charges, cannot be equated to rent and denial of benefit of exemption to the appellant on that score cannot be sustained. 19. In the case of Society of Jesus, (supra), the question which arose for consideration was, what is a charitable hospital and dispensary for the purpose of Section 110(e) of the Karnataka Municipal Corporation Act, 1976. After noting that nowhere in the Karnataka Act, Charitable hospital and dispensary has been defined, the Court referred to the dictionary meaning as well as Section 2(15) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es from patients either in-patient or out-patient, which can be treated as charitable hospitals and dispensaries and are entitled for exemption under Section 110(e) of the Act. It is necessary to point out that in a society like ours, where the country is still a developing country and where large sections of people are poor and not free from hunger and disease, the State alone, out of its revenue, cannot provide free medical aid to all those poor persons who are in need of it. Therefore, presumably, keeping that in view and with a view to encourage charitable attitude among the philanthropists, a provision like Section 110(e) of the Act has been made providing for exemption from payment of property tax in respect of a building and land used as charitable hospital/dispensary. There cannot be any doubt that it is only with a view to facilitate medical aid to the poor and needy and with a view to reduce financial burden of such charitable hospitals and dispensaries, such a provision has been made. The burden of running a charitable hospital and dispensary which is established and continued for the purpose of giving free/subsidised medical aid, can be reduced by various methods, (1) b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected from others who can afford to pay, such a hospital or dispensary, would satisfy the requirement of a charitable hospital and dispensary. However, it is needless to observe that the entire income derived by charging the patients, as stated above, should be solely utilised by the hospital/dispensary for the benefit of the hospital and for the benefit of the poor and the deserving, needy patients. The hospital is permitted to charge and collect money from the rich and affluent only with a view to make the hospital viable and with a view to get the best and qualitative treatment to the poor and the needy whenever it is required by them. Insofar as out-patients are concerned, it would not be permissible for the hospital to limit the extension of the medical facility to a limited number of poor patients. It has to be for all those who approach the hospital seeking free treatment. However, insofar as in-patients are concerned, it could be subject to the availability of the beds and other facilities in the hospital. The funds generated by the hospital by charging the patients has to be utilised, as noticed by me earlier, for the benefit of other poor and deserving patients. This does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven free treatment, may not be a reason for outrightly rejecting the claim for exemption. 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 be carried over for future development and to be spent in the next few years. Therefore, it requires a holistic approach on the part of the respondent Corporation to determine as to whether a property is entitled for exemption in full or partial exemption or no exemption at all. Definitely such conclusion cannot be arrived at in the manner done by the second respondent in the impugned order. The respondents have not produced any documents to show that the second respondent has been delegated with the powers of the Commissioner to consider exemption. Even assuming such power has been conferred, the direction issued at the very first instance in MTA No.21/2006 was to the Commissioner, the two subsequent directions issued by this Court was also to the Commissioner and therefore, the commissioner and he alone would be entitled to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... type of treatment offered free. Therefore, the percentage should not be misunderstood as purely a numerical figure. Thus, the respondent Corporation should take note of all the above observations how the Courts have approached the matter what other statute say and then examine the plea of the petitioner. Though the petitioner seeks for a positive direction to grant exemption, such relief cannot be granted in a Writ Petition under Article 226 of the Constitution of India, as it requires thorough and deep scrutiny of the various documents and records that the petitioner will produce. Therefore, necessarily matter has to be remanded to the respondent corporation for fresh consideration. 27. For all the above reasons, the Writ Petition is allowed, the impugned order is quashed and the matter is remanded to the first respondent for fresh consideration, who shall consider the plea for exemption a fresh uninfluenced by any of the observations made by his subordinates in the earlier order or the file notings and take note of the observations made by this Court, the legal principles, which have been adopted by the various Courts as indicated above and approach the matters in a holistic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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