Separate corporate personality limits Article 285 exemption and defeats promissory estoppel against statutory land assessment.

A company incorporated under the Companies Act is a separate legal person, so land leased from the Central Government was not exempt from non-agricultural assessment merely because its shares were wholly held by the Union. After the 1974 amendment to the Andhra Pradesh Non Agricultural Lands Assessment Act, land owned by the Central Government and leased for non-agricultural use fell within the charging scheme, making the lessee liable as owner for assessment. Promissory estoppel could not defeat the statute, and the correspondence relied on did not create an enforceable exemption for the company. However, the amendment was not retrospective, so demands for periods before its commencement were unsustainable.

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Issues: (i) whether land leased by a Government company from the Central Government was exempt from non-agricultural assessment under Article 285 of the Constitution of India and the Andhra Pradesh Non Agricultural Lands Assessment Act, 1963 after the 1974 amendment; (ii) whether the State was barred by promissory estoppel from levying the assessment; and (iii) whether demands could be raised for periods prior to the coming into force of the 1974 amendment.

Issue (i): whether land leased by a Government company from the Central Government was exempt from non-agricultural assessment under Article 285 of the Constitution of India and the Andhra Pradesh Non Agricultural Lands Assessment Act, 1963 after the 1974 amendment.

Analysis: The exemption under Article 285 applies to the property of the Union, not to property held by a distinct company merely because its shares are wholly owned by the Union. A company incorporated under the Companies Act is a separate juristic entity, and its property is not the property of its shareholder. After the amendment effective from 1 July 1974, Section 2(j), Section 3 and Section 12 of the Andhra Pradesh Non Agricultural Lands Assessment Act, 1963 brought within the charging scheme land owned by the Central Government and leased for commercial, industrial or other non-agricultural purposes, making the lessee liable as owner for assessment.

Conclusion: The land was not exempt under Article 285, and non-agricultural assessment was lawfully leviable on the appellant company for the period after the amendment took effect.

Issue (ii): whether the State was barred by promissory estoppel from levying the assessment.

Analysis: A representation cannot operate against the statute. The correspondence relied upon did not amount to an enforceable promise of exemption to a separate company carrying on its own business, even if its shares were wholly held by the Union. The assurance, on its own terms, did not extend to the appellant companies as distinct legal persons.

Conclusion: The plea of promissory estoppel failed against the State.

Issue (iii): whether demands could be raised for periods prior to the coming into force of the 1974 amendment.

Analysis: The State's defence rested on the amendment made by Act 28 of 1974, and that amendment was not retrospective. Liability created by the amendment could not be fastened for periods before it came into force.

Conclusion: The demands for the period prior to 12 July 1974 were unsustainable and stood quashed.

Final Conclusion: The assessment was upheld only for the post-amendment period, while the pre-amendment demands were set aside, leaving the appellants with liberty to contest the actual extent and rate of assessment in appeal proceedings under the Act.

Ratio Decidendi: Property of a company incorporated under the Companies Act is not property of its shareholder, including the Union, and a statutory tax or assessment cannot be defeated by promissory estoppel or applied retrospectively in the absence of clear legislative mandate.

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