FR PAUL Vs. EXECUTIVE OFFICER KALLOORKAD PANCHAYAT

JUDGEMENT

(1.) THE petitioner is the Director of one J. M. Hospital , Kalloorkad which is situate within the local limits of the second respondent, the kalloorkad Panchayat. THE hospital has got one building in which there are general wards, pay wards, operation theatre, examination rooms and all other equipments necessary for a hospital. THE first respondent, the Executive officer of the Panchayat, issued a notice Ext. P1 dated 28-8-1970 to the petitioner informing him that the Panchayat had imposed on him under the Kerala panchayats Act, 1960 building tax and service tax in respect of the above building in the manner mentioned in the said notice, and calling upon him to pay the said taxes. THE petitioner filed an appeal before the Panchayat against the demand made as per Ext. P1; but the first respondent informed the petitioner that the appeal cannot be entertained without payment of the disputed tax. THEreupon, the petitioner filed this writ petition for quashing ext. P1 and in the alternative to direct the second respondent to bear and dispose of his appeal according to law.

(2.) S. 72 of the Kerala Panchayats Act enumerates the buildings and lands exempt from tax, cess or duty leviable under S. 66 One of the items so exempted is charitable hospitals and dispensaries. Therefore, the only question for determination in this case is whether on the facts, the petitioner's hospital is a charitable hospital. Para. 2 of the petition reads as follows: "the said hospital is run as a non-profit making charitable institution. Free medical aid is given there to poor inpatients and out patients. Poor inpatients are not charged any rent at all. Rich patients are charged rent and price for medicine at very reasonable rates. The amounts obtained thus as also donations from the benevolent public are not sufficient for the maintenance of the institution. The deficiency is made up by the parish and the amount so spent by it comes to a considerable amount. The Government of india has recognised the institution as a charitable hospital and has sanctioned a grant to it of Rs. 10,000/ for purchasing an X-ray plant. " The counter affidavit filed by the first respondent states among other things, that the averment to the effect that the petitioner's hospital is a charitable hospital run on a non-profit basis is not true. In support of the above statement the counter affidavit avers that the hospital has got pay ward rooms for which rent is charged at Rs. 3/- per bed per day and Rs. 5/- for the double-bed per day. It is also stated that the medicine and services supplied by the hospital are charged by the petitioner irrespective of the question whether the patients are poor or rich. The first respondent has also produced copies of three receipts as Exts. R1, R2 and R3, which would show that the rooms occupied by patients and the services rendered to them have also been charged by the petitioner. The petitioner has himself admitted the above facts. The fact that an institution, which is established with a charitable object and rendering charitable services to the public at large, is charging the cost of the services rendered by it in the case of persons who can afford to pay such charges, would not in any manner affect the charitable character of the institution. The only relevant question is whether the institution is run as a business with a profit making motive. The petitioner has asserted in the affidavit that the institution is being run on a loss; and its expenses are met by the Parish. This fact is not specifically denied in the counter-affidavit. At any rate, absolutely no material has been placed before me that the above averment is not correct. The hospital is, therefore a charitable institution and is entitled to exemption under S. 72 (f)of the Act.