( 1 ) THE Board of Trustees for the Port of Kandla have filed this petition in which they challenge the levy of non-agricultural assessment on the lands belonging to them.

( 2 ) THE facts of the case briefly stated are as under: In 1931 A. D. Kandla port was constructed by the then princely State of Kutch. On 15th August 1947 when Indian Independence Act 1947 came into force Kutch became a sovereign State. On 1st August 1948 the Ruler of Kutch executed an instrument of accession ceding his State to the Dominion of India. On 26th January 1950 when the Constitution came into force Kutch became a Part-C State On 1st April 1950 the Indian Ports Act 1908 was applied to Kandla port by a notification which was issued on 31st January 1950 That notification also laid down the limits of Kandla port. On 27th February 1952 the Central Government granted a perpetual lease in respect of some lands to the Sindhu Resettlement Corporation Limited for developing a township outside the limits of Kandla port. On 9th February 1953 Union of India instructed the Chief Commis- sioner of Kutch to hand over 346. 5 square miles of land to the port authorities. In 1955 the Sindhu Resettlement Corporation surrendered the lease for land to the Union of India and the Union of India granted a fresh lease to the Sindhu Resettlement Corporation for a period of 99 years. On 29th March 1955 the Central Government declared Kandla port as a major port with effect from 8th April 1955 On 1st November 1956 Kutch which was a part C State merged with the then State of Bombay in the wake of States Reorganisation Act 1956 With effect from 1st May 1960 it became a part of the State of Gujarat. On 29th February 1964 the Major Port Trusts Act 1963 came into force and in pursuance thereof the Central Government constituted a Board of Trustees for administering Kandla port. On 24th December 1970 the Mamlatdar of Anjar demanded of the port trust authorities a sum of Rs. 56 6 400 account of non-agricultural assessment of the lands under its control for the period from 1963-64 to 1970-71. On 16th June 1971 the port authorities made a representation to the State Government. On 24th April 1974 the port authori- ties were informed that the State Government had rejected their representa- tion and directed that the non-agricultural assessment demanded of them by the Mamlatdar of Anjar should be recovered.

( 3 ) IT is this demand of non-agricultural assessment by the State of Gujarat which is challenged by the petitioner-the port trust authorities of Kandla.

( 4 ) MR. Nanavati who appears for the petitioner has on merits firstly contended before me that by virtue of the provisions of Article 285 of the Constitution the lands in respect of which the non-agricultural assess- ment has been demanded by the State of Gujarat are not liable to pay it. In order to appreciate the contention which Mr. Nanavati had raised it is necessary to turn to Article 285 of the Constitution. Clause (1) of Article 285 upon which reliance has been placed by Mr. Nanavati provides as under :the property of the Union shall save ill so far as Parliament may by law other- wise provide be exempt from all taxes imposed by a State or by any authority within a State. I do not reproduce clause (2) of Article 285 because it has not been pressed into service by any of the parties to this case. It is clear from clause (1) of Article 285 that the State of Gujarat is not competent to levy any taxes on the property of the Union. Article 289 of the Constitution correspondingly exempts the property and income of a State from Union taxation. The question which Mr. Nanavati has argued before me is whether the lands in respect of which the non-agricultural assessment has been demanded by the State of Gujarat are the properly of the Union within the meaning of clause (1) of Article Z85. Before I proceed to examine the contention which Mr. Nanavati has raised before me I may incidentally note that the exception carv