Court upholds pay scales for Managers, rules on property tax exemption, and liability for taxation.

The Court dismissed the Food Corporation of India's challenge to the legality of pay scales for Managers, declaring the provision of Rule 3 of the Rules of 1969 as constitutional. The Court also ruled that properties owned by the Union of India and transferred to FCI are exempt from property tax, while those acquired by FCI post-constitution are taxable. Despite technicalities in title ownership, FCI was held liable for property taxation, and the petition was dismissed.

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Issues:
1. Challenge to the legality of pay scales for Managers in Food Corporation of India.
2. Non-revision of pay scales for Managers after 1983.
3. Legality of a specific order dated 21.7.1997.
4. Exemption from property tax for Central Government properties.
5. Interpretation of ownership and taxation regarding properties occupied by Food Corporation of India.

Analysis:

1. The Food Corporation of India challenged the legality of pay scales for Managers, seeking a declaration that the provision of Rule 3 of the Rules of 1969, as amended in 1991, providing two pay scales for Managers recruited to different societies, is unconstitutional. The petitioner contended that the respondents' failure to revise pay scales after 1983, despite revisions by the State Government in 1986 and 1989, was illegal. The Court was asked to set aside a specific order dated 21.7.1997.

2. The petitioner, a corporate body under the Food Corporation Act, argued for exemption from property tax based on communication indicating ownership of Central Storage godowns. The Court examined previous orders and cited a Kerala case to establish that properties owned by the Union of India and transferred to FCI are exempt from property tax, while those acquired by FCI post-constitution are taxable. The Court emphasized the distinction between properties owned by the Union and those acquired by FCI.

3. The Court analyzed definitions of 'owner' under different Acts to determine tax liability, highlighting that the lessee or occupant of a building cannot be considered the 'owner' under the Kerala Municipal Corporations Act. It concluded that properties owned by the Union and transferred to FCI are exempt from property tax, while service charges payable under Circulars are deemed compensation under quasi-contract law.

4. The judgment discussed the legislative framework regarding the exemption of Union properties from State taxation and noted the absence of specific legislation by Parliament in this regard. The Court considered Circulars providing for service charges as compensation payable in quasi-contract and found them to be within the constitutional purview.

5. The Court rejected the petitioner's contention for exemption from property tax, emphasizing that the Food Corporation of India, despite technicalities in title ownership, enjoys the property and is liable for taxation based on the principle of property taxation. The petition was deemed meritless and dismissed accordingly.

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