Claim of exemption from levy of property tax.

RATNAM, J.

1. This Writ Appeal at the instance of S.N.R. Sons Charitable Trust, Coimbatore, has been preferred against the dismissal of W.P. No. 9701 of 1983, praying for the issue of a writ of certiorari or other appropriate writ calling for the records of the respondent relating to the notice of demand in Assessment No. 60511 dated 30-9-1983 in Ref. No. 71243/82/A7 and quash the said notice of demand relating to Sri Ramakrishna Hospital, Coimbatore, run by the Appellant trust. In the affidavit filed by the appellant in support of the writ petition, it was stated that after the formation of the trust on 9-2-1970 and in accordance with the terms of the deed of trust, the appellant has been running Sri Ramakrishna Hospital, Sri Ramakrishna Childrens School, etc., and that the hospital was started in 1974. It was also stated that prior to the coming into force of Coimbatore City Municipal Corporation Act (hereinafter referred to as ‘the Act’), the appellant sought exemption from payment of property tax from the the n Coimbatore Municipality and the appellant, by proceedings dated 20-9-1977, was exempted from payment of property tax under S. 83(1)(e) of the Tamil Nadu District Municipalities Act, 1920 with effect from 1-4-1977, excluding the office, canteen, doctors residential quarters and nurses quarters, in respect of which a separate assessment for property tax was made. This according to the appellant, had continued till 30-9-1980, when a special notice dated 31-3-1981 was issued to the appellant proposing to revise the earlier assessment with effect from the half year commencing from 1-10-1980 by revising the annual value, and on representations by the appellant, the appellant was granted exemption from payment of property tax under S. 123(e) of the Act for the period from 1-10-1980 to 31-3-1982, by an order passed on 8-8-1981. The appellant also referred to the grant of exemption under S. 80G of the Income-tax Act, 1961 as well as exemption from payment of urban land tax and the certificate of the Collector of Coimbatore to the effect that the hospital run by the appellant was doing charitable and relief work and 40% of the out-patient cases were treated completely free of charges and even in-patients whose income was less than Rs. 300 were given free accommodation, bed and linen, medical and nursing care including investigations, medicines, operations and diet, to establish that the hospital run by the appellant was a charitable one which justified an exemption from payment of property tax. On 25-2-1982, according to the appellant, it applied for a renewal of the exemption from payment of property tax from 1-4-1982, but no reply was received. Instead, a notice was served on the appellant demanding property tax for the half year commencing from 1-4-1982, and this led to the appellant making further representations on 13-8-1982 and 30-8-82 praying for the renewal of the exemption granted upto 31-3-1982. Thereupon, the respondent, by a communication dated 30-9-1983. not only refused to grant exemption, but demanded payment of arrears of property tax for three half-years commencing from 1-4-1982 and called upon the appellant to pay the same within seven days from the date of receipt of that notice. Thereafter, the appellant approached this Court under Art. 226 of the Constitution of India, praying for the relief set out earlier.

2. In the counter filed by the respondent, it was stated that during the first half-year 1975-1976, three assessments were made in respect of the hospital buildings, the first two covering the hospital buildings and the third comprising of the doctors quarters, nurses quarters, canteen and office room and that the appellant had paid the tax upto 1977. Referring to the claim for exemption made by the appellant by letter dated 26-7-1977, the respondents stated that objections were raised by the Audit Department, on the ground that the hospital was not entitled to the benefit of such exemption,