Madras HC refuses to quash property tax demand for hospitals run by trusts

Madras HC refuses to quash property tax demand for hospitals run by trusts
24/11/2017 , by , in News/Views

The Madras High Court said the assessing authorities of local bodies alone can decide whether hospitals run by trusts attracted property tax or not. Justice R Mahadevan of the Madurai Bench made the observation while disposing of a batch of petitions seeking quashing of demand notices issued by the city corporation to some hospitals here.

Refusing to quash the demand notices, he directed the petitioners, including Velammal Educational Trust which runs a medical college hospital and the Meenakshi Mission Hospital and Research Centre, to approach the assessing authorities concerned. He said even if the hospitals run by trusts received “nominal” rent from patients toward rooms, from canteen operators and parking fee as claimed by them, whether such rent attracted property tax had to be decided only by assessing authorities of the municipal corporation.

Even if they were charitable hospitals and dispensaries, it might not be proper to quash the demand notice itself. The hospitals could make an objection or file a revision plea enclosing materials to prove that they were charitable institutions and entitled to exemption from property tax. The judge directed the petitioners to pay one third of the arrears. The corporation contended the petitioners collected exorbitant room rent besides parking fee and rent for canteen. They were not charitable organisations and should pay property tax.

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