Statutory corporations do not enjoy exemption from state taxation under Art. 285; assessment must adhere to proper procedures.

1.By these three writ petitions, the petitioners, Hotel Corporation of India Limited, seek to challenge the assessment made under the Jammu and Kashmir Urban Immovable Property Act, 1962 (Act XXII of 1962) (hereinafter referred to as "the Act"), in respect of Hotel Centaur by the Respondent - 3, Assessing Authority, Urban Immovable Property Tax, Srinagar. The assessments have been challenged on various grounds. Once of the main grounds of challenge is that Hotel Corporation of being a Government of India undertaking, no tax can be levied on its properties in view of the prohibition contained in Art.285 of the Constitution of India and S.4(1) of the Act. The annual value ascertained by the Assessing Authority and the method of ascertaining the same are also subject - matter of challenge. All the three writ petitions were admitted and recovery of the tax levied by the Assessing Authority stayed by this Court by different orders passed from time to time. These three petitions are, therefore, taken up together for hearing and disposal.

2. We have heard Mr. B.A. Bashir, learned counsel for the petitioners, who submits that the Hotel Corporation of India being the subsidiary of Air India which is a body corporate established by an Act of Parliament, the Air Corporations Act, 1953, and wholly owned by the Government of India, its properties are exempt from levy of tax by the State by virtue of Art.285 of the Constitution of India. According to Mr. Bashir, property of the petitioners is also exempt from levy of tax in view of the provision contained in sub-sec. (1) of S.4 of the Act which provides that tax shall not be leviable in respect of any building and lands vested in the Central Government. The learned counsel submits that the land and buildings owned by the Hotel Corporation of India vest in the Central Government in view of the fact that it is a subsidiary of a Government of India undertaking which is wholly owned by the Government of India. He, therefore, submits that levy of tax on the buildings and land of the petitioner corporation is ultra vires Art.285 of the Constitution of India. He further submits that the petitioners have also challenged the annual value of the property ascertained by the assessing authority and the method adopted therefor. He also submits that no proper opportunity was afforded to the petitioners to satisfy the Assessing Authority about the real annual value of the property, which has resulted in fixation of very high annual value and levy of excessive tax. He submits that in any event, the respondents should be directed to give proper hearing to the petitioners and determine the annual value and the amount of tax payable afresh by a reasoned order. He further submits S.4 of the Act, if the property is jointly owned by the petitioners, the Hotel Corporation of India and the State Government, the liability to pay the tax would be joint and for the purpose the State Government also should be made a party and directed to pay tax at least to the extent of its share. He stated that the Hotel Corporation of India was not the sole owner of the property in respect of which the assessment has been made. The said property, according to him, is jointly owned by the Hotel Corporation of India and the State Government.

3. We have also heard the learned Advocate General Mr. Gone who submits that Art.285 of the Constitution has no application to the property of a statutory Corporation. He also submits that there is no infirmity in the assessments which might justify interference of this Court in exercise of powers under Art.226 of the Constitution. He further submits th