Kerala High Court
Cherupushpam Hospital Trust vs Pala Municipality on 24 February, 2005
Equivalent citations: AIR2005KER178, 2005(2)KLT234, AIR 2005 KERALA 178, (2005) ILR(KER) 1 KER 707, (2005) 1 KER LJ 720, (2005) 2 KER LT 234
Author: A.K. Basheer
Bench: A.K. Basheer
JUDGMENT A.K. Basheer, J.
1. Is a hospital run by a Charitable Trust entitled to get exemption from payment of property tax leviable under Section 235 of the Kerala Municipality Act, 1994? The learned Single Judge answered the question in the negative holding that the appellant would not come under any one of the exempted categories enumerated in the above statutory provision. This Writ Appeal is directed against the above judgment.
2. The appellant is a registered Charitable Trust. It is running Cherupushpam Charitable Hospital at Palai in Kottayam District. The appellant was admittedly exempted from payment of tax by virtue of Section 101 of the Kerala Municipality Act, 1960, the predecessor of Act 1994. It is not necessary to go into the details of the assessment proceedings which were initiated by the Municipality after enactment of Act 1994 in view of the primary issue to be decided in this appeal. Suffice it to say that the appellant was found liable to pay property tax at the rate of Rs. 21960/- per annum. This order was challenged in the Writ Petition.
The learned Single Judge held that the appellant was not entitled to claim exemption under the provisions of Act 1994, though it had been granted exemption under the old Act.
3. The contentions of the learned counsel for the appellant ace two fold: (i) the appellant is liable to be exempted from payment of property tax by virtue of Section 235 of the Kerala Municipality Act, 1994; and (ii) the tax levied by the Municipality is highly exorbitant and unreasonable.
4. It is not in dispute that the hospital run by the appellant was exempted from payment of property tax when the Kerala Municipalities Act, 1960 was in force. Section 101 of the old Act provided for exemption of certain categories of buildings and lands. Clause (d) of Section 101 with the proviso and explanation thereunder are extracted herein below:
101. Exemption:--
1. The following buildings and lands shall be exempted from the property tax-
(a) ............
(b) ............
(c) ............
(d) lands and buildings or portions of lands and buildings exclusively occupied and used for public worship or by a society or body for a charitable purpose.
Provided that such society or body is supported wholly or in part by voluntary contributions and applies its profits, if any, or other income in promoting its objects and does not pay any dividend or bonus to its members.
Explanation:--"Charitable purpose" includes relief of the poor, education and medical relief but does not include a purpose which relates exclusively to religious teaching."
As mentioned earlier, the appellant was given exemption when Act 1960 was in force. However, the situation changed when Act 1994 came into force with effect from 30th May, 1994.
5. Section 235 of Act 1994 which deals with "Exemption" corresponds to Section 101 of the old Act. Some drastic changes were incorporated in Section 235 in the matter of exemption available to certain categories of lands and buildings as compared to the provisions contained in the old Act. Thus, lands and buildings occupied and used by a society or body for a charitable purpose which were eligible for exemption under Sub-clause (d) of Sub-section (1) of Section 101 of the old Act were excluded or deleted from the purview of exemption. Similarly, the proviso and explanation in the old Act extracted supra, were also deleted. In other words, lands or buildings which are exclusively occupied or used for charitable purpose like relief of the poor, education and medical relief are no more eligible for exemption under the new Act.
6. But learned counsel for the appellant tried to develop a new argument. It was submitted by the learned counsel that Clause (c) of Sub-section (1) of Section 235 of the Act read along with the explanation under the above statutory provision would make the institution of the appellant eligible for exemption. Relevant portion of the above statutory provision and explanation are extracted hereunder:
"235. Exemption:--
(1) The following buildings and lands shall be exempted from the property tax:
(a) ..........
(b) ...........
(c) Choultries for the occupation of which no rent is charged and choultries where the rent charged for the occupation is used exclusively for charitable purpose.
(d) to (k)............
Explanation:-- The exemption granted under the section shall not extend to buildings and lands for which rent is realised by the owners thereof and to residential quarters attached to schools and colleges not being hostels or residential quarters attached to hospitals, dispensaries and libraries."
The thrust of the argument of the learned counsel is that the hospital is being run by the appellant without any profit motive and the treatment is free to the poor. No rent is collected for the rooms in the hospital from the poor and the entire income that is received by the hospital is being utilised for charitable purpose alone. It is thus contended that since the hospital building is "used exclusively for charitable purpose", it would come within the meaning of choultry, thereby making it eligible for exemption as provided under Clause (c) of Sub-section (1) of Section 235 of Act 1994. The argument of the counsel is undoubtedly innovative.
7. But in our view, the above contention is wholly misconceived and unsustainable. The term "choultry" is indisputably a building used for lodging of visitors and pilgrims.
8. The word "choultry" is not defined in the Act. The word is defined in the Law Lexicon of British India compiled and edited by Ramanatha Aiyar, 1940 Edition, as follows: -
"Choultry: Chatram. Achoultry is a corruption of chavadi. It means a shelter or resting place for travellers. A chathram (corruption of the Sanskrit Sathram) is a house where pilgrim and travellers are fed."
9. In the Shorter Oxford English Dictionary, choultry is described as an Anglo-Indian word "being corruption of Telugu chawadi" and its meaning is given as "A caravaserai". In Wilson's Glossary of Judicial and Revenue Terms, second edition, page 108, the word is given in different forms such as, Chawati or Chauti, corruptly, Choltry or Choultry and the meaning is given as "A public lodging place, a shelter for travellers".
10. As rightly observed by their Lordships of the Supreme Court in Municipal Council v. Tirumalai Tirupati Devasthanam (AIR 1974 SC 521), a line will have to be drawn to distinguish between what is incidental or subservient to the main object and purpose of the choultry and the oblique motive of profit-making to deprive the municipality of its rightful dues.
11. It may be true that the test of charitable purpose may be satisfied by the proof of any of the three conditions, viz. relief of the poor, education or medical relief. But after the deletion of the Explanation dealing with "charitable purpose" from the present Act, the appellant cannot lay emphasis on the words "charitable purposes" contained in Sub-clause (c) of Sub-section (1) of Section 235 of the Act and contend that the ambit and meaning of the word 'choultry' should be expanded to include a charitable hospital as well and thereby exempt it from payment of tax, since the poor are being treated in the said hospital.
12. The next argument of the learned counsel is based on the explanation to Section 235 of the Act. It is contended by the learned counsel that the above explanation which also refers to residential quarters attached to hospitals and dispensaries, would clearly give an indication that the charitable hospitals are eligible for exemption. According to the learned counsel, if charitable hospitals were not under the contemplation of the Legislature to be eligible for exemption, a reference to residential quarters attached to hospitals and dispensaries would not have been made in the explanation. It is in this context that the learned counsel has argued that the word 'choultries" used in Sub-clause (c) should be read as buildings exclusively used for charitable purposes. Since the appellant who is not collecting any rent or fee for the rooms in the hospitals from the poor to whom medical aid is given absolutely free, it is eligible to get exemption from payment of sales tax.
13. A perusal of the provisions contained in Section 235 and the explanation thereunder leaves us in no doubt as to what the Legislature intended to mean by the use of the terminology "Choultry". The word "choultry" has its own meaning and connotation. The said terminology has been used in the above statutory provision with a purpose which the Legislature intended. It unambiguously conveys what it means. Nothing more, nothing less. The Court cannot and need not venture upon an exercise to interpret what is self explicit. This being the basic rule of interpretation, we do not deem it necessary to deal any further with the above question.
14. As regards the explanation under Section 235, we stop by saying that even if the above explanation is not a surplusage, it does not in any way help the argument of the learned counsel. It is significant to note that the first Explanation to Section 101 of the old Act defining or explaining "charitable purpose" had been deleted by the Legislature, when Act 1994 was enacted. We do not propose to embark upon an exercise to find out what was the intention of the Legislature in retaining the Explanation in the amended Act. Anyhow we have no hesitation to hold that the above Explanation does not in any way advance the case of the appellant.
15. The next contention raised by the appellant is that the rate of tax levied by the Municipality is excessive and unreasonable. Having regard to the entire facts and circumstances, we do not find any merit in the above contention. As rightly noticed by the learned Single Judge, the rate of tax originally fixed by the Municipality had been brought down considerably at the later stage. Any how, we do not deem it necessary to consider the above question since, in our view, the rate of tax fixed by the Municipality is not at all exorbitant or unreasonable. Therefore, the above contention is also liable to be repelled. We do so.
In the result, the Writ Appeal falls. It is accordingly dismissed in limine. No costs.