1994 (5) TMI 278 - SC - Companies Law

Warehousing Corporation Act: Property Tax Exemption Denied

Central Warehousing Corporation Versus Municipal Corporation

The Supreme Court held that godowns owned by a Corporation established under the Warehousing Corporation Act are not exempt from paying property tax under ... - Issues:1. Whether godowns owned by a Corporation established under the Warehousing Corporation Act are liable to pay property tax under the Municipal Corporation Act or exempt under Section 135 of the Act or Article 285 of the Constitution of India.2. Whether the property owned by the Corporation can be considered as property of the Union of India for tax exemption purposes.Analysis:1. The Supreme Court considered the issue of whether godowns owned by a Corporation established under the Warehousing Corporation Act are liable to pay property tax under the Municipal Corporation Act. The Court observed that the Corporation, although an instrumentality of the State, has a separate identity. The property owned by the Corporation cannot be deemed as property of the Union of India, making it liable to pay property tax under the Municipal Corporation Act. The claim for exemption under Section 135 of the Act was also rejected as the conditions for exemption were not satisfied by the Corporation. The appeal was dismissed with costs.2. In a separate appeal challenging the levy of tax by the Municipal Corporation under the Punjab Municipal Corporation Act, the Appellant claimed that the property was of the Union of India, thus exempt from taxation. The Court, based on similar reasoning as in the previous case, held that the property owned by the Appellant could not be considered as property of the Union of India. The appeal was dismissed with costs.3. Another appeal involved tax levied on the Appellant's godowns under the Tamil Nadu District Municipality Act. The Appellant claimed that the property was of the Union of India, seeking exemption from tax. The Court reiterated that without factual foundation, the property owned by the Appellant cannot be deemed as property of the Union of India. Additionally, the property was not eligible for exemption under Section 82 of the Act. Following the reasoning from previous judgments, this appeal was also dismissed with costs.In all three cases, the Supreme Court emphasized the distinction between the property of the Corporation and the Union of India, highlighting the lack of factual basis to support the claims for tax exemption. The Court consistently held that the properties owned by the Appellants were not entitled to exemption under the relevant provisions, ultimately dismissing the appeals in each case.