MUNICIPAL COMMISSIONER OF DUMDUM MUNICIPALITY AND ORS. ETC. versus INDIAN TOURISM DEVELOPMENT CORPORATION AND ORS. ETC.

Citation: [1995] SUPP. 2 S.C.R. 433 · Decided: 01-08-1995 · Supreme Court of India · Bench: S.C. AGRAWAL, B.P. JEEVAN REDDY · Disposal: Appeal(s) allowed
cites 2 · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

MUNICIPAL COMMISSIONER OF DUMDUM 
MUNICIPALITY AND ORS. ETC. 
V. 
INDIAN TOURISM DEVELOPMENT CORPORATION 
AND ORS. ETC. 
AUGUST 1, 1995 
[S.C. AGRAWAL AND B.P. JEEVAN REDDY, JJ.] 
Constitution of India, 1950: 
A1ticles 285 ( 1) and 298-Property tax-Levy on property of Union of 
India vesting in statutory corporation-Held : not exempt from tax. 
International Airp01ts Auth01ity Act, 1971: 
A 
B 
c 
Sections 3(2) and 12-Authority-A distinct juristic entity created for D 
carrying on commercial activity--Properties vested in if-No longer the proper-
ties of Union of India-Not a limited vesting for the purpose of better 
management-Letter and Certificate-Asserting properties belonged to Union 
of India-Did not represent a decisiorr-Not binding on the Municipal Cor-
poration as it was not heard. 
Section 31-Authority-Claiming and obtaining benefits of depreciation 
under the Income Tax Act, 1961 for more than twenty years-Held : it could 
not claim that the properties did not belong to it. 
E 
Section 34-Authority-supersession of-Vesting of properties "Owned" F 
or "cpntrolled" by it in the Central Government-Held : usual regulatory 
provision and did not imply that the properties belonged to the Union of 
India. 
Delhi Municipal Corporation Act, 1957 : 
Sections 113 and 119-Municipal Corporatian-''Authority within a 
state"---Not competent to levy taxes upon the property of the Union of India. 
Administrative Law : 
G 
Declaration by Government under a provision-Valid only if there was H 
433 
434 
SUPREME COURT REPORTS [1995) SUPP. 2S.C.R. 
A 
a disput~Tot binding on third party which was not heard. 
B 
c 
Words and Phrases: "vest" and "vesting''-Meaning of - In the context 
of Section 16( 1) of the International Airport Authority Act, 1971. 
The International Airport Authority of India granted a licence in 
respect of a portion of land vesting in it in favour of the respondents, 
whereupon the latter had constructed a hotel. The appellants levied proper-
ty taxes upon the said land and the hotel building constructed thereon and 
made a demand therefore on the respondents. The respondents filed a writ 
petition in the High Court challenging the said demand. The High Court 
allowed the petition. Aggrieved by the High Court's judgment, the appel-
lants preferred the present appeal. 
On behalf of the respondents it was contended that the expression 
"vesting" had different shades of meaning and did not necessarily mean the 
vesting of ownership; that the land for which licence was given belonged to 
D the Union of India and thus exempt from tax; that Section 34(2)(c) of the 
International Airport Authority Act, 1971 provided for "vesting" of the 
property in the Union of India; that Section 34(2)(c) of the Act used both 
the expressions "owned" and "controlled" which meant properties owned by 
• 
the Union of India and also controlled by it; and that the Government of 
India had decided under Section 12(3) of the Act vide letter and Certificate 
E 
that the properties belonged to the Union of India which decision was 
binding of the appellants. 
Allowing the appeal, this Court, 
HELD: 1.1. According to clause (1) of Article 285 of the Constitution, 
F the properties of the Union of India shall be exempt from all taxes imposed 
by a state or by any other authority within a State except insofar as Parlia-
ment may by law provide otherwise. A municipality or a municipal corpora· 
tion is certainly an authority within a State. Therefore, the municipality is 
not competent to levy any taxes upon properties of the Union of India by 
G virtue of this article. [ 439-B] 
1.2. Section 113 of the Delhi Municipal Corporation Act, 1957 
specified the several kirids of taxes which the corporation shall levy for the 
purpose of the Act. Property taxes is one of the taxes mentioned in this 
section. Section 119 exempts the properties of the Union from taxation. 
II 
[439-EJ 
DUMDUM MUNICIPALITY v. l.T.D.C. 
435 
2.1. The International Airports Authority is a corporation created A 
under the International Aiq)orts Authority Act, 1971 with no share capital 
but which has its own properties, its own fund, accounts, employees and 
capable of lending and borrowing and entering into contracts. The proper· 
ties held by it can be categorized into (1) those that were transferred to it 
under Section 12 of the Act at the time of its inception and (2) those that 
have been acquired by it subsequent to its constitution. [ 449-H; 450-A-B] 
2.2. The I
Excerpt shown. Read the full judgment & AI analysis in Lexace.