Statutory corporation property is not Union property: municipal and panchayat tax applies to Food Corporation buildings.
Buildings owned by the Food Corporation of India were held not to be property of the Union for Article 285(1) purposes because the Corporation was a separate statutory body corporate with independent legal personality, control over its own property and affairs, and a distinct management structure. Government funding, appointment power, and entitlement to surplus profits did not convert its assets into Union property. The result was that municipal or panchayat property tax and building tax could validly be levied on the Corporation's buildings, and the constitutional immunity in Article 285(1) did not apply.
Issues: Whether buildings belonging to the Food Corporation of India were exempt from property tax or building tax levied by a Municipality or Panchayat under Article 285(1) of the Constitution of India on the footing that the Corporation's property was property of the Union.
Analysis: The Corporation was constituted as a body corporate with perpetual succession, power to acquire, hold and dispose of property, and a separate management structure. Its funds, properties and affairs were controlled by the statute in a manner that gave it an independent legal personality distinct from the Central Government. The fact that the Central Government provided capital, appointed members and received surplus profits did not make the Corporation's properties properties of the Union. The Court relied on the settled principle that a statutory corporation or Government-controlled entity with separate legal identity owns its own property, and such property does not automatically attract the Union's constitutional immunity from State or local taxation. Article 285(1) protects only property of the Union, not property of an autonomous statutory corporation.
Conclusion: The buildings owned by the Corporation were not exempt from municipal or panchayat tax under Article 285(1) and the levy was upheld.
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