ORDER : ANANT RAMANATH HEGDE, J. 1. Heard the learned Senior counsel appearing for the petitioner as well as the learned counsel appearing for respondent No.4. 2. This petition is filed assailing the communication dated 17.02.2024 marked at Annexures-F and F1 and also the demand notice dated 07.02.2024 marked at Annexures-G to G12. Petitioner has also sought to quash the communication dated 07.08.2025 marked at Annexure–H. All these communications/ notices are issued by respondent No.4, the Town Municipal Council, Terdal. 3. In terms of the communication at Annexures-F and F1, respondent No.4 demanded Rs. 2,45,10,538/- towards arrears of property tax, and in terms of the communication dated 07.02.2024 respondent No.4 demanded property tax of Rs. 1,11,00,645. These two notices/communications pertain to buildings built by the petitioner, in two different survey numbers. 4. Annexure-G series notices are issued mentioning the break-up of the property tax payable by the petitioner. Notice at Annexure G-12 is said to be the property tax demanded in respect of an vacant space. Rest of the notices at Annexures-G to G-11 are issued demanding property tax in respect of the buildings. Annexure-H - endorsement is issued by the Chief Officer, Terdal Municipality during the pendency of the present petition. 5. Petitioner is a Trust registered under the Indian Trusts Act, 1882. Petitioner claims that it is running the following educational institutions: 1) B.A.M.S. Ayurved medical college 2) Para medical course 3) College of commerce 4) Primary school 5) B.Ed College 6) ITI College etc. 7) Danigond College of Commerce B.com, Terdal 8) Dr.Sidhant Danigond Central School-CBSE Terdal 9) Danigond P.U science College, Terdal 10) Danigond Post Graduation Centre M.D/M.S, Terdal 11) Danigond College of Pharmacy, Terdal 12) Danigond college of Nursing, Terdal 13) Danigond College of Physiotherapy, Terdal 14) Padma Hospital, Terdal 15) SDM Trust Padma Ayurvedic Hospital and research Centre, Terdal, further, the petitioner trust property also comprises of Hostel, Mess, Auditorium, Canteen, Sport building both indoor and outdoor, staff quarters, pharmacy building, central store, departmental store, recreation hall, Temples and other buildings exclusively for the use of the petitioner trust. 6. The petitioner states that the vacant space as well as the buildings are used to effectively run the educational institutions referred to above. Certain buildings and vacant space are used for hostel, mess, auditorium, canteen, sport both indoor and outdoor, staff quarters, pharmacy, central store, departmental store, recreation hall, Temple. 7. 6. The petitioner states that the vacant space as well as the buildings are used to effectively run the educational institutions referred to above. Certain buildings and vacant space are used for hostel, mess, auditorium, canteen, sport both indoor and outdoor, staff quarters, pharmacy, central store, departmental store, recreation hall, Temple. 7. Learned Senior counsel appearing for the petitioner would submit that since the premises is used essentially for running educational institutions, the petitioner/institution is exempt from paying property tax under Section 94(1-A)(i)(ii) of Karnataka Municipalities Act, 1964 (‘Act, 1964’). 8. Learned Senior Counsel would urge that, to run an Ayurvedic Medical College, there has to be a hospital attached to the college. This is the mandate under the Indian Medicine Central Council Act, 1970 and the Rules framed thereunder and also under the National Commission for Indian System of Medicine (Minimum Essential standards, assessment and rating for undergraduate Ayurveda colleges and attached teaching hospitals) Regulations, 2024 (‘Regulations, 2024’) which are framed under Section 55 of National Commission for Indian System of Medicine Act, 2020 (for short ‘Act, 2020’). 9. Attention of the Court is invited to the definition of ‘attached teaching hospital’ in Section 2(1)(f) and also to Regulation 5(b) of Regulations, 2024. 10. Learned Senior Counsel also referred to Rule 38 found in Chapter IV of Regulations, 2024 and also Regulation No. 40 which defines the ‘Out Patient Department Zone.’ 11. Referring to the aforementioned provisions, it is urged that the Ayurvedic Medical College must have an Ayurvedic Hospital and without an Ayurvedic Hospital, the Ayurvedic Medical College cannot function. Teaching is imparted to the students both in the college and as well as in the hospital, and hospital cannot be considered as the commercial enterprise which is liable for payment of property tax. 12. Learned Senior Counsel in support of the contention would also refer to the judgment of the Co-ordinate Bench of this Court in Navodaya Education Trust vs. The Commissioner, Raichur , W.P. No.103010/2013 and The City Municipal Council vs Akbarpatel , W.P.No.87922/2012 . In addition to that the learned Senior Counsel also referred to the judgment of Madras High Court in Coimbatore Masonic Charity Trust vs. The Corporation of Coimbatore , MANU/TN/1304/2010 13. Learned Counsel appearing for respondent No.4 would urge that the petitioner is not running a charitable hospital. In addition to that the learned Senior Counsel also referred to the judgment of Madras High Court in Coimbatore Masonic Charity Trust vs. The Corporation of Coimbatore , MANU/TN/1304/2010 13. Learned Counsel appearing for respondent No.4 would urge that the petitioner is not running a charitable hospital. Petitioner is collecting fees for the services rendered and petitioner is liable for payment of property tax as property tax is exempted only for charitable medical hospitals. In addition it is also submitted that petitioner is also running hostels and other facilities in the premises and all those structures which accommodate those facilities are liable for payment of property tax as fees are collected from the occupants. It is further submitted that the staff quarters and vacant site are not exempted from payment of property tax. 14. In support of his contention, learned counsel for respondent No.4 would place reliance on the judgment of the Kerala High Court in Quilon Medical Trust vs State of Kerala and another , WP(c) No.6965/2014 , Prestige Educational Trust (Regd.) vs Tashildar, Kannur & and Others , W.P.No.2159/2010 and Jubilee Mission Medical College and Research Institute vs Government of Kerala , 2011 (4) KLT 106 15. Placing reliance on the aforementioned judgments, learned counsel for respondent No.4 would submit that since the petitioner is collecting fees from the patients admitted to the hospital, the petitioner does not come under the category of charitable institutions, as such, it is liable to pay the tax. 16. The Court has considered the contentions raised at the Bar and perused the records. 17. It is not in dispute that the petitioner is a Trust registered under the Indian Trusts Act, 1882. The petitioner claims that it is running educational institutions as well as the hospital. Admittedly, the hospital, hostels and staff quarters are located in the premises where the Medical College is located. In addition, certain portion of the property is vacant. 18. Learned Senior Counsel on a specific question put by the Court as to whether the petitioner –Trust is a charitable Trust running charitable hospital, would submit that the petitioner- Trust is not a charitable Trust and the hospital run by the petitioner-Trust is also not a charitable hospital. However, it is the submission that the Trust is running educational institutions as such the Trust is exempt from paying property tax under Section 94(1-A)(i) (i) and (ii). 19. However, it is the submission that the Trust is running educational institutions as such the Trust is exempt from paying property tax under Section 94(1-A)(i) (i) and (ii). 19. Since it is submitted that the petitioner is not a charitable Trust, the Court need not consider whether the petitioner is exempted from paying property tax under Section94(1-A)e. 20. Since the petitioner is claiming exemption from property tax under Section 94(1-A)(i) (i) and (ii), the Court has to consider whether the petitioner-Trust meets the requirement under the said provision and the relevant portion is extracted as under: 94. Taxes which may be imposed .-(1) Subject to the general or special orders of the Government, a municipal council.- (a) xxxxxx (b) xxxxxx 94(1-A) The following buildings and vacant lands shall be exempted from the property tax, namely.- (a) xxxxx (b) xxxxx (c) xxxxx (d) xxxxx (e) charitable hospitals and dispensaries but not including residential quarters attached thereto; (f) xxxxx (g) xxxxx (h) xxxxx (i) buildings or vacant lands exclusively used for.- (i) student hostels, which are not established or conducted for profit; (ii) educational purposes by recognised educational institutions; xxxxx (Emphasis supplied) 21. Aforementioned provision provides exemption for both the building as well as vacant land provided two conditions are met. (a) The building or the vacant land must be used for student hostels which are not established or conducted for profit. (b) If the building or the vacant lands used for educational purposes by recognised educational institutions. 22. It is not in dispute that the colleges run by the petitioner-Trust are recognized by the competent Authority and those institutions are recognised educational institutions. 23. There is nothing on record to hold that the hostels in the premises are established or run for profit. The petitioner claims that hostel facilities are provided in the campus for the benefit of the students studying in the petitioner’s educational institutions and they are not run for profit. This statement is not disputed by the respondent- Authority. This being the position, there is no difficulty in holding that the vacant land and the buildings used as hostels in the campus where educational institutions are located are exempt from payment of property tax as long as the hostels are not run for profit. This statement is not disputed by the respondent- Authority. This being the position, there is no difficulty in holding that the vacant land and the buildings used as hostels in the campus where educational institutions are located are exempt from payment of property tax as long as the hostels are not run for profit. It is also relevant to notice that the stand-alone-hostels without any educational institutions attached to it, may not come under the ambit of exemption under Section 94(1-A) (i) (i) of Act, 1964. 24. Now the question is whether the hospital attached the medical college and the staff quarters provided to the medical college staff are exempt from payment of property tax. 25. Sections 2(1)(ea)and (f) of the Indian Medicine Central Council Act, 1970 read as under: 2. Definitions.- (1) In this Act, unless the context otherwise requires,- (ea) “medical college” means a college of Indian medicine, whether known as such or by any other name, in which a person may undergo a course of study or training including any post-graduate course of study or training which will qualify him for the award of a recognised medical qualification. (f) “medical institution” means any institution within or without India which grants degrees diplomas or licences in Indian medicine; 26. It is also necessary to refer to the definition of “attached teaching hospital” under Section 2(1)(f) of Regulations, 2024 which reads as under: 2. Definitions.- (1) In these regulations, unless the context otherwise requires.- xxxxx xxxxx (f) ‘attached teaching hospital’ means an Ayurveda hospital that offers standard healthcare services, attached to an Ayurveda Medical Institution for the purpose of teaching and training to the students of Ayurveda; xxxxx (Emphasis supplied) 27. As can be seen from the definition of “attached teaching hospital” as found in Section 2(1)(f) of Regulations, 2024, the hospital that offers standard healthcare services, attached to an Ayurveda Medical Institution, for teaching and training the students of Ayurveda, would also be the educational institution as the purpose of the hospital is to impart Ayurveda medical education in addition to offering health care services. 28. Chapter II of Regulations, 2024 would deal with the general considerations before granting sanction to any institution to run the Ayurvedic Medical College. 29. Regulation 5(1)(b) and (c) of Regulations, 2024 read as under: 5. 28. Chapter II of Regulations, 2024 would deal with the general considerations before granting sanction to any institution to run the Ayurvedic Medical College. 29. Regulation 5(1)(b) and (c) of Regulations, 2024 read as under: 5. College, campus and general considerations.- (1) The campus designated for an Ayurveda medical college shall consist of followings, namely: - (a) xxxxxxx (b) attached teaching hospital along with ancillary sections or units or facilities; (c) hostel and staff quarters; xxxxxx (Emphasis supplied) 30. From the aforementioned Clauses in Regulations, 2024, it is explicit that the campus designated for Ayurveda Medical college shall consist of; (i) attached teaching hospital along with ancillary sections or units or facilities. (ii) Hostel and staff quarters. Thus, the Ayurveda Medical College would also include the attached teaching hospital and the hostel and staff quarters. Regulation 5 makes it abundantly clear that to run an Ayurvedic College there must be a hospital attached to the college and that hospital would also be the part of the Medical College. 31. Regulations 38 and 40 of Regulations, 2024 set out the requirements for the attached teaching hospital and outpatient department. These Regulations would also provide for having an attached teaching hospital and outpatient department in medical college. 32. It is common knowledge that in medical colleges, the education is imparted not just in classrooms but also in hospitals. In fact, the education that is imparted in medical college is more intense in the hospitals than in the classrooms. 33. This being the position, the Court is of the view that there is no difficulty at all in holding that the medical hospital attached to a medical college and the staff quarters meant for the medical college staff are exempt from payment of property tax under Section 94(1-A)(ii) of Act, 1964. 34. Though, learned counsel for respondent No.4 would place heavy reliance on the judgment of the Kerala High Court in Jubilee Mission Medical College and Research Institute supra which has followed the full Bench judgment of the Kerala High Court in Unity Hospital (P) Ltd. V. State of Kerala , ( 2011(1) KLT 236 ) this Court is of the view that the provisions which has been referred to by this Court in Regulations, 2024 and the provisions of the Act, 1970 are not referred to by the Full Bench of the Kerala High Court. Since, it is mandatory for the medical colleges to have a hospital attached to the college; this Court is of the view that the hospital attached to the medical college is also an educational institution which is exempt from payment of property tax. 35. The view taken by this Court is also supported by the view taken by the Co-ordinate Bench of this Court in City Municipal Council supra and Navodaya Education Trust supra. In Navodaya Education Trust supra, the Co-ordinate Bench of this Court has held that the structure used for the bank, canteen and staff quarters in the campus is also exempt from payment of property tax. 36. This case was decided on 31.10.2025 and the petition was allowed. Before signing the judgment, while going through the draft the Court entertained the doubt as to whether all the staff quarters in the premises are used by the medical college staff and for this purpose the matter was listed on 17.11.2025 to seek clarification. 37. Learned Senior counsel submitted that the staff quarters in the premises are meant only for the medical college staff. Said submission is placed on record and the counsel for the petitioner was directed to place a memo in this behalf and memo is also filed to this effect. 38. The Court also noticed that the impugned notices do not include the staff quarters and the notices are issued in respect of hospital, colleges, hostel, workshop, TV recreation and store room, Mess building, school and vacant land. 39. It is also made clear that this judgment cannot be construed as having declared exemption of tax in respect of the staff quarters other than the staff quarters meant for medical college staff. The question whether other staff quarters are exempt from payment of tax or not is not decided in this petition. 40. The Court for the aforementioned reasons, has taken the view that the petition has to be allowed and impugned communications/notices have to be quashed. 41. Hence the following: ORDER (i) Writ Petition is allowed. (ii) As far as Annexure - H is concerned, it is noticed that the petitioner's request is declined on the premise that the Writ Petition is pending. Now the Writ Petition is disposed of. (iii) The respondent-Authority shall consider the application filed by the petitioner in accordance with law. 41. Hence the following: ORDER (i) Writ Petition is allowed. (ii) As far as Annexure - H is concerned, it is noticed that the petitioner's request is declined on the premise that the Writ Petition is pending. Now the Writ Petition is disposed of. (iii) The respondent-Authority shall consider the application filed by the petitioner in accordance with law. (iv) It is submitted by the learned Counsel for respondent No.4 that, the petitioner has constructed the building without obtaining any permission/sanction as required under the law. (v) If any such illegal act is committed by the petitioner-Trust, respondent No.4 is at liberty to proceed as advised in law.