A statutory Corporation, such as the Food Corporation of India, with separate management and distinct legal personality, is not immune from property tax under Art.285(1) of the Constitution of India.

The petitioner in these two petitions under Art.226 of the Constitution is the Food Corporation of India. It challenges the levy of property tax/building tax under the Kerala Municipalities Act, 1960 (Act 14 of 1961) and the Kerala Panchayats Act 32 of 1960 on buildings belonging to it. I shall state the facts in O.P.No. 5346 of 1992 which relates to the buildings belonging to the petitioner in the Angamaly Municipality, the facts in the other cases being similar, the only difference being that the buildings are in Thikkodi Panchayat governed by the Kerala Panchayats Act.

2. The petitioner which is a body corporate established under the Food Corporations Act, 37 of 1964, has constructed buildings for its purposes within the limits of the Angamaly Municipality. It is not in dispute that the buildings and the land on which they stand, belong to the petitioner. The petitioner had paid the property tax due to the Municipality up to and inclusive of the year 1990-91 without demur, but when demand was raised for the tax for the year 1991-92 as per Ext. P4 series of notices, petitioner objected, and after an appeal to the Municipal Council was rejected for non-compliance with the mandatory condition of payment of the tax due at the rate prevailing in the previous year, for maintaining the appeal, petitioner filed the writ petition challenging the very levy of property tax on its buildings by the Municipality, on the ground that it is violative of Art.285 of the Constitution of India. The petitioner's case is that it is a part o f the Union Government, its properties are the properties of the Union and therefore beyond the pale of taxation by the State or any authority within the State by virtue of Art.285(1) of the Constitution of India. To adopt the phraseology used by counsel, the petitioner is an "affair of the Union" and not merely one of its instrumentalities, its activities being geared to achieve certain social welfare measures of the Union, including proper distribution of food grains. The question is whether Art.285(1) confers immunity from State or Municipal taxation on the buildings constructed by, and belonging to, the petitioner. 3. Art.285(1) reads:

"285. Exemption of property of the Union from State taxation: - (1) The property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State."

4. There Js no case for the respondent Municipality that Parliament has enacted any law as envisaged in Art.285(1). Their contention is that the immunity from tax under the said Article is available only to property of the Union, and not to property of its instrumentalities, or entities, which have a separate juristic personality of their own. The question is which of these contentions is correct for which it is necessary to understand the precise nature of the Constitution of the petitioner Corporation. I shall refer to some of the provisions of the Food Corporation Act (the act) under which it is established.

5. The preamble to the Act states that it is intended to provide for the establishment of Food Corporations for the purpose of trading in food grains and other foodstuffs and for matters connected therewith and incidental thereto. S.3 provides that the Central Government shall establish for the purposes of the Act, a Corporation known as the Food Corporation of India with effect from such date as it may, by notification in the official gazette, specify in that behalf. Sub-section (2) states that the Corporation shall be a body corporate with the aforesaid name, having perpetual succession, and a common seal, with power, subject to the provisions of the Act, to acquire, hold and dispose of the property, and to contract, and to sue, and be sued, by that name. S.5 deals with the capital of the Corporation. The original capital shall be a sum no t exceeding one hundred crores of rupees as the Central Government may fix. But the