Important Point
Visakhapatnam port trust is not a department of Central Government and is such not entitled to exemption under Article 285 of the constitu­tion of India.

Judgment

D.P. Wadhwa, J.-A common question of law in both these appeals is : If the Board, i.e., Board of Trustees of Visakhapatnam Port Trust is exempt from taxation under Article 285 of the Constitution from levy of property tax by the Visakhapatnam Municipal Corporation, constituted under Visakhapatnam Municipal Corporation Act, 1979 (Civil Appeal No. 1810 of 1988) and also from levy of non agricultural land tax by the Visak­hapatnam Mandai under the Non-Agricultural Lands Assessment Act, 1968. Contention of Mr. Kailash Vasudev, learned counsel appearing for the Board is that the properties are not owned by the Board and the vest­ing of the properties in the Port Trust is only for the purpose of administering them and they in fact demained the properties owned by the Union of India and thus exempt from taxataion under Article 285 of the Constitution. Under this Article property of the Union of lndia is exempt from all taxes imposed by the State or by any authority within a State.

2. The Board of Visakhapatnam Port Trust is constituted under the Major Port Trust Act, 1963. Constitution of the Board is described in Section 3 of the Act. Under Section 5 Board shall be a body corporate having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold or dispose of property and may by name by which it is constituted, sue or to be sued. Chapter IV of the Act deals with “Property and Contracts”. Under clause (a) of Section 29 all property, assets and fundsw and all rights to levy rates vested in the Central Government or, as the case may be, any other authority for the purposes of the port immediately before the appointed day, shall vest in the Board. Under Section 32 of the Act when any Immovable property is required for the purposes of the Board, the Central Government may, at the rerquest of the Board, procure the acquisition thereof under the provisions of the Land Acquistion Act, 1894 (1 of 1894), and on payment by the Board of the compensation awarded under that Act and of the charges incurred by the Government in connection with the proceedings, the land shall vest in the Board.

3. Our attention was drawn to Section 110 of the Act, which provides for power of the Central Government to supersede the Board. Under sub-section (2) of this section all the properties vested in the Board shall, untill the Board is reconstituted, vest in the Central Govern­ment. On this an argument was raised that the Board is not the abso­lute owner of the properties and that only the managment of these properties vest with the Board.

4. We do not think that this argument has any basis. This Court in Municipal Commissioner of Dum Dum Manicipality & Ors. v. Indian Tourism Development Corporation & Ors.1 , considered the same argument in the case of International Airport Authority that the vesting of the properties was only for the purpose of managing those properties and ownership of the properties did not vest in the Author­ity. In that case this Court was deliberating the provisions of the International Airports Authority Act, 1971 under which International Airport Authority of India was constituted. The provisions of that Actd are puri materia with the Major Port Trust Act, 1963 regarding the constitution, property and contracts and supercession. It is not necessary to quote the provisions of the International Airport Author­ity Act, 1971 to show that how they are similar to the provisions in the Major Port Trust Act, 1963. This Court negatived the argument that the properties vested in the International Airport Authority of India for the purpose of managing those properties and that the ownership of these properties continued to be with the Central Government. The Court held that the properties vest in the International Airport Authority of India and it could not be said that the Central Govern­ment owned the properties. Board in the present case is not a depart­ment of the Central Government rather i