No specific exemption granted to the properties vesting Union of India from payment of Property Taxes; Bombay HC [Read Judgment]

The Bombay High Court division bench comprising of Justices A.S.Okay and C V Bhadang has held that, No specific exemption granted in respect of the properties vesting in the Union of India from payment of property taxes

The Court has rejected a plea of Food Corporation of India (FCI) challenging the property tax imposed on its godowns in suburban Poisar and Magathone by Municipal Corporation of Greater Mumbai.

The petitioner is a Corporation duly constituted under the provisions of the Food Corporation of India Act,1964. It is a Government of India Undertaking which is fully controlled by the Government of India.

The case made out by the petitioner is that the Union of India acquired the land admeasuring 3,47,903 sq yard at village Poisar and the land admeasuring 1,65,074 sq yard at Magathone by taking recourse to the acquisition proceedings. Thereafter, the Union of India constructed godowns for storage of foodgrains on the said lands. After establishment of the Food Corporation of India, the said godowns are being used by the petitioner.

The Court held that, In the present case, the levy of property taxes on the premises as defined in clause (gg) of section 3 of the said Act of 1888. Clause (gg) of section 3 reads thus: “(gg) “premises” includes messuages, buildings and lands of any tenure, whether open or enclosed, whether built on or not and whether public or private.”

Thus, even the buildings on the public property are also “premises” within the meaning of of the said Act of 1888. Under section 139A of the said Act of 1888, the property taxes are leviable on the buildings and lands. The property taxes include water tax, water benefit tax, sewerage tax, sewerage benefit tax, general tax, educational cess, street tax and betterment charges.

The Bench rejected the contention that the petitioner will be entitled to the protection granted under clause (1) of Article 285 of the Constitution of India. Therefore, the contention that the petitioner is not liable to pay property taxes to the said Corporation is not accepted.

The Court granted four months time FCI to pay the taxes. The Court also directed to Municipal Corporation of Greater Mumbai not to take any coercive action against the petitioner for recovery of taxes during the said period.

Read the Full text of the Judgment here.