Can’t exempt pvt hospital from civic taxes: Madras HC

‘CHARITABLE TRUST’

Can’t exempt pvt hospital from civic taxes: Madras HC

TIMES NEWS NETWORK

Chennai:29.04.2021 

City-based Sundaram Medical Foundation’s plea to exempt it from payment of property tax, water and sewerage charges has been rejected by Madras high court.

The hospital has not provided any proof to show that it is providing medical services free of cost to the poor and at confessional rates to others as per the object of the deed of trust under which it was established. Instead, an inspection made in the hospital has revealed that it was treating only the rich and affluent, said Justice S M Subramaniam on Wednesday.

Rejecting a petition from the hospital, the judge said it could not be treated as a charitable trust for the purpose of granting such exemption under the Chennai City Municipal Corporation Act.

“Under the guise of running a charitable medical institution, if huge collections are made for the services provided, then one cannot trust upon the genuineness of the charitable institution and under those circumstances, even the benefit of doubt is to be extended in favour of the revenue and not to the institution,” Justice Subramanian said.

The issue pertains to petitions moved by the foundation challenging demand notices issued by the Chennai Metro Water Supply and Sewerage Board and the Chennai corporation in 2018 demanding payment of pending tax dues over ₹1 crore.

Challenging the demand, the foundation moved the high court. It claimed that it is a charitable institution providing free services to 15% of its total clients.

Refusing to accept the contention, the court held that providing free service to 15% and charging the rest 85% does not amount to doing charity.