Statutory vesting in a port trust body corporate does not preserve Union ownership or Article 285 tax immunity.

The Major Port Trust Act, 1963 vested the relevant properties, assets, funds and rights in the Visakhapatnam Port Trust Board and gave it the status of a body corporate empowered to hold and deal with property. On that statutory scheme, the Board was not a mere department of the Union, and vesting operated in the corporation itself rather than leaving ownership with the Central Government. A Government-controlled statutory body distinct from the Union could not claim the constitutional immunity under Article 285 reserved for Union property. The levy of property tax and non-agricultural land tax was therefore upheld.

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Issues: Whether the Board of Trustees of the Visakhapatnam Port Trust was exempt from property tax and non-agricultural land tax under Article 285 of the Constitution on the footing that the properties vested in it only for administration and continued to belong to the Union of India.

Analysis: The statutory scheme under the Major Port Trust Act, 1963 vested the relevant properties, assets, funds and rights in the Board and conferred on it the character of a body corporate with power to hold and deal with property. The provisions governing acquisition, vesting and supersession showed that the Board was not a mere department of the Central Government. The reasoning was supported by prior authority construing pari materia provisions, under which vesting in such a statutory corporation was treated as vesting in the corporation itself and not as continued ownership of the Central Government. A Government-controlled statutory body distinct from the Union could not claim the constitutional immunity available to Union property.

Conclusion: The Board was not exempt from taxation under Article 285 of the Constitution and the levy of property tax and non-agricultural land tax was upheld.

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