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PETITIONER: THE BOARD OF TRUSTEES FOR THE VISAKHAPATNAM PORT TRUST

       Vs.

RESPONDENT: THE STATE OF ANDHRA PRADESH & ORS.

DATE OF JUDGMENT:       17/07/1999

BENCH: D.P.Wadhwa, M.B.Shah

JUDGMENT:

D.P. Wadhwa, J.

     A common question of law in both these appeals is:  if the  Board,  i.e., Board of Trustees of  Visakhapatnam  Port Trust  is  exempt  from taxation under Article  285  of  the Constitution  from levy of property tax by the Visakhapatnam Municipal  Corporation,  constituted   under   Visakhapatnam Municipal  Corporation Act, 1979 (Civil Appeal No.  1810  of 1988) and also from levy of non agricultural land tax by the Visakhapatnam  Mandal  under  the  Non-  Agricultural  Lands Assessment  Act, 1968.  Contention of Mr.  Kailash  Vasudev, learned  counsel  appearing  for  the   Board  is  that  the properties are not owned by the Board and the vesting of the properties  in  the  Port Trust is only for the  purpose  of administering  them and they in fact remained the properties owned  by  the Union of India and thus exempt from  taxation under  Article 285 of the Constitution.  Under this  Article property  of  the  Union of India is exempt from  all  taxes imposed by the State or by any authority within a State.

     The  Board of Visakhapatnam Port Trust is  constituted under  the Major Port Trust Act, 1963.  Constitution of  the Board is described in Section 3 of the Act.  Under Section 5 Board  shall be a body corporate having perpetual succession and  a common seal with power, subject to the provisions  of this Act, to acquire, hold or dispose of property and may by name by which it is constituted, sue or to be sued.  Chapter IV  of  the Act deals with "Property and Contracts".   Under clause  (a) of Section 29 all property, assets and funds and all  rights  to levy rates vested in the Central  Government or, as the case may be, any other authority for the purposes of the port immediately before the appointed day, shall vest in  the  Board.   Under  Section  32 of  the  Act  when  any immovable  property  is  required for the  purposes  of  the Board,  the  Central Government may, at the request  of  the Board,  procure the acquisition thereof under the provisions of  the  Land  Acquisition  Act, 1894 (1 of  1894),  and  on payment  by the Board of the compensation awarded under that Act  and  of  the  charges incurred  by  the  Government  in connection  with the proceedings, the land shall vest in the Board.

     Our  attention  was drawn to Section 110 of  the  Act, which  provides  for  power  of the  Central  Government  to supersede  the Board.  Under sub-section (2) of this Section all  the  properties  vested in the Board shall,  until  the

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Board  is reconstituted, vest in the Central Government.  On this  an  argument  was  raised that the Board  is  not  the absolute  owner  of  the  properties   and  that  only   the management of these properties vest with the Board.

     We  do  not  think that this argument has  any  basis. This Court in Municipal Commissioner of Dum Dum Municipality and  others vs.  Indian Tourism Development Corporation  and others  (1995 (5) SCC 251), considered the same argument  in the case of International Airport Authority that the vesting of the properties was only for the purpose of managing those properties  and ownership of the properties did not vest  in the Authority.  In that case this Court was deliberating the provisions of the International Airports Authority Act, 1971 under  which  International Airport Authority of  India  was constituted.   The  provisions of that Act are pari  materia with   the  Major  Port  Trust   Act,  1963  regarding   the constitution,  property and contracts and supercession.   It is   not   necessary  to  quote   the  provisions   of   the International  Airports Authority Act, 1971 to show that how they  are similar to the provisions in the Major Port  Trust Act,  1963.   This  Court negatived the  argument  that  the properties  vested in the International Airport Authority of India  for the purpose of managing those properties and that the  ownership of these properties continued to be with  the Central Government.  The Court held that the properties vest in the International Airport Authority of India and it could not   be  said  that  the   Central  Government  owned   the properties.   Board in the present case is not a  department of  the Central Government rather it has the attributes of a company.   It  is distinct from the Central Government.   It cannot,  therefore,  claim  exemption  from  taxation  under Article 285 of the Constitution.

     In  a  Constitution  Bench decision of this  Court  in Electronics  Corporation  of  India Ltd.   etc.   etc.   vs. Secretary,  Revenue Department, Government of Andhra Pradesh and  others  etc.  etc.  (1999 (4) SCC 458 = 1999 (3)  SCALE 125),  it was held that the Electronics Corporation of India Ltd.,  a  Government company, was distinct from the  Central Government and Article 285 was not applicable in the case of a  Government company.  Following the ratio in the aforesaid two  decisions  it has to be held that Board is  not  exempt from taxation under Article 285 of the Constitution.

     Accordingly  Civil Appeal No.  1810 of 1988 is allowed and  Civil  Appeal Nos.  1997-98 of 1990 are dismissed  with costs.