A property owned by the Airports Authority of India cannot be treated as a property of the Central Government and cannot be exempted for tax under section 29 of the Tamil Nadu Urban Land Tax Act, 1966. This is because the Airports authority of India is a separate legal entity even though the shares are wholly subscribed by the central government and thus it can possess property in its name. This was decreed by the Hon’ble Justice Shri S. M. Subramaniam in the case of M/s. Airports Authority of India Vs. The Special Commissioner & Commissioner, Land Reforms and Ors. [W.P.Nos.11311 to 11313 of 2008 and W.P.No.28441 of 2017] on the 27th of July before the Hon’ble High Court of judicature at Madras.
The brief facts of the case are, the petitioner is a Statutory organization under the administrative control of Government of India, Ministry of Civil Aviation. The petitioner manages the Civil Airports and Civil Enclaves at Defence Airports across the country. The petitioner holds certain lands in the Villages of Pazhavanthangal, St. Thomas Mount, Cowl Bazaar and Porur and the said lands were assessed to the second respondent (Alandur Zone). As against the levy of Urban Land Tax by the 2nd respondent, the petitioner filed Revision Petitions before the 1st respondent under Section 30(1) of the Tamil Nadu Urban Land Tax Act 1966. The first respondent rejected the Revision Petitions in orders dated 28.03.2008, 28.03.2008, 03.04.2008 and 11.11.2013 respectively. Aggrieved by this, the petitioner has filed the present petition under Article 226 of the constitution of India.
The counsel for the petitioner contented that Section 29 of the Act contemplates Exemptions. Accordingly, nothing in the said Act shall apply to any urban land owned by the State or the Central Government. The petitioner / Airport Authority of India is wholly owned by the Government of India, Ministry of Civil Aviation and therefore, the said exemption clause would be applicable to the petitioner and consequently, the impugned orders, levying tax are in violation of the exemption clause provided under Section 29 of the Act. It was also submitted that, the petitioner is a “State” within the meaning of Article 12 of the Constitution of India as its functions are directly controlled by the Ministry of Civil Aviation. However, the counsel for the respondents rejected this argument by the counsel and relied on the judgement by the supreme court in favour of their argument in the case of Municipal Commissioner of Dum Dum Municipality and others Vs. Indian Tourism Development Corporation and others, reported in (1995) 5 SCC 251, wherein it was held that, “For all the above reasons, we are of the opinion that the International Airports Authority of India is a statutory corporation distinct from the Central Government and that the properties vested in it by Section 12 of the Act cannot be said to have been vested in it only for proper management. After the date of vesting, the properties so vested are no longer the properties of the Union of India for the purpose of and within the meaning of Article 285. The vesting of the said properties in the Authority is with the object of ensuring better management and more efficient operation of the airports covered by the Act. Indeed, that is the object behind the very creation of the Authority. But that does not mean that it is a case of limited vesting for the purpose of better management. The Authority cannot, therefore, invoke the immunity created by Article 285(1) of the Constitution. The levy of property taxes by the relevant municipal bodies is unexceptionable.”
The learned judge heard the contentions of both the parties and relied on the judgments in the case mentioned by the counsel for the respondent and also in International Airport Authority Vs. Municipal Corporation of Delhi, reported in AIR 1991 Delhi 302, wherein, it was held that “the property in question namely, terminal II of Indira Gandhi International Airport is not the property of the Central Government and is the property of the Authority, and the respondent Corporation is entitled to levy and realize taxes from the petitioner under Section 113 of the Delhi Municipal Corporation Act. The Delhi High Court also took a same view that a contention was sought to be raised that the municipal tax could not be levied on the property of the company by virtue of Art. 285(1) of the Constitution because the company was owned by the Government. It was held by the Supreme Court that merely because the entire share capital was subscribed by the Government of India, it did not mean that the company did not own the property in question. It was held that the company was a separate legal entity.” Applying the rationale used in the above-mentioned cases, the court held that the taxes levied cannot be exempted and dismissed the petition by decreeing, “the writ petitioner cannot be construed as ‘Central Government’ within the meaning of exemption clause as contemplated under Section 29 (a) of the Tamil Nadu Urban Land Tax Act, 1966 and consequently, the respondents are empowered to levy the Urban Land Tax under the provisions of the said Act. Thus, there is no infirmity or perversity in respect of the orders impugned in original passed by the second respondent as well as the Appellate order passed by the first respondent. The petitioner/ Airport Authority of India is liable to pay the Urban Land Tax as applicable and in this view of the matter, all the writ petitions fail and stand dismissed.”