Union ownership of port land preserved under the Major Port Trusts Act; State could not recover non-agricultural assessment.

The Gujarat HC explained that the lands and buildings of the Port of Kandla remained Union property before and after the Major Port Trusts Act, 1963. Section 29(1)(a) was construed as a vesting for administration, control and management only, not as an absolute transfer of title, because the Act's scheme, preamble and central control showed that ownership was retained by the Union. As the property continued to belong to the Union, it enjoyed constitutional immunity from State taxation. The State therefore was not entitled to recover non-agricultural assessment from the Board.

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Issues: Whether the lands and buildings comprising the Port of Kandla remained Union property prior to the Major Port Trusts Act, 1963, whether the vesting of such property in the Board under Section 29(1)(a) was absolute or only for administration, control and management, and whether the State could recover non-agricultural assessment from the Board.

Analysis: The constitutional and statutory history showed that the erstwhile property of Kutch, including the port lands, vested in the Dominion and thereafter in the Union. The Major Port Trusts Act, 1963 created the Board as a statutory body to manage major ports, but the scheme of the Act, its preamble, the pervasive control retained by the Central Government, and the language of Section 29(1)(a) indicated that the transfer to the Board was not a transfer of title. The expression "vest" was held to be context-sensitive and, in the setting of the Act, meant vesting for administration, control and management only. As the lands continued to be Union property, they attracted the constitutional immunity from State taxation.

Conclusion: The vesting in the Board was limited and did not divest the Union of ownership; consequently, the State was not entitled to recover non-agricultural assessment from the Board.

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