Property owned by the Airport Authority of India cannot be exempted for tax: Madras High Court

W.P.Nos.11311 to 113108andW.P.No.284417IN THE HIGH COURT OF JUDICATURE AT MADRASDATED :27.07.2021CORAMTHE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAMW.P.Nos.11311 to 113108 & 284417andM.P.Nos.1 1 & 08andW.M.P.Nos.30542 & 305417W.P.No.113108M s. Airports Authority of India Represented by its Deputy General Manager163 Karuneegar Streeet Alandur Chennai 600 088.3.The Tahsildhar Urban Land Tax Tambaram Taluk Tambaram Chennai 600 045. ... Respondents1 18 https: www.mhc.tn.gov.in judis W.P.Nos.11311 to 113108andW.P.No.284417Prayer : Writ Petition filed Under Article 226 of the Constitution of India to issue of Writ of Certiorarified Mandamus calling for the records of the respondents especially the order of the 1st respondent dated 28.03.2008 in Ref.Rc.No.1791 2001A confirming the order of the 2nd respondent dated 22.12.2006 ULT Case No.66(1 24) 1401 and quash the same and further direct the respondents to treat the lands in Survey No.23 1B 24 27A 28 29A 39B 40A 42 44 45 46 1B 47 2 52A 53 54 1B 55 2 62A 1 62A 2 63 2 63 1 65 1 65 2 64 and 73 measuring an total extent 717 Grounds 0390 sq.ft of Pazhavanthangal Village Tambaram Taluk Kancheepuram District as not taxable under Act 366.W.P.No.113108M s. Airports Authority of India Represented by its Deputy General Manager163 Karuneegar Streeet Alandur Chennai 600 088.3.The Tahsildhar Urban Land Tax 2 18 https: www.mhc.tn.gov.in judis W.P.Nos.11311 to 113108andW.P.No.284417 Tambaram Taluk Tambaram Chennai 600 045. ... RespondentsPrayer : Writ Petition filed Under Article 226 of the Constitution of India to issue of Writ of Certiorarified Mandamus calling for the records of the respondents especially the order of the 1st respondent dated 28.03.2008 in Ref.Rc.No.12137 2006(C2) confirming the order of the 2nd respondent dated 31.05.2006 vide ref.Rc.No.1791 2001A in ULT Case No.97(1 to 3) 1401 and quash the same and further direct the respondents to treat the lands in Survey No.1934 2 1940 and 1945 measuring an extent of 5287.0990 sq.ft of St.Thomas Mount Village Tambaram Taluk Kancheepuram District as not taxable purview of Urban Land Tax Act 1966.W.P.No.113108M s. Airports Authority of India Represented by its Deputy General Manager163 Karuneegar Streeet Alandur Chennai 600 088.3 18 https: www.mhc.tn.gov.in judis W.P.Nos.11311 to 113108andW.P.No.2844173.The Tahsildhar Urban Land Tax Tambaram Taluk Tambaram Chennai 600 045. ... RespondentsPrayer : Writ Petition filed Under Article 226 of the Constitution of India to issue of Writ of Certiorarified Mandamus calling for the records of the respondents especially the order of the 1st respondent dated 03.04.2008 in Ref.Rc.No.12136 2006(C2) confirming the order of the 2nd respondent dated 17.03.2006 in ULT Case No.104 1401 Cowl Bazaar and quash the same and further direct the respondents to treat the lands in Survey No.142 2 143 1B 148 1B 148 2B 148 3B2 148 4B 149 2B 149 3B 157 2B 158 2B 158 3B measuring an extent of 93.0341 sq.ft of Cowl Bazaar Village Tambaram Taluk Kancheepuram District as not taxable purview of Urban Land Tax Act 1966.W.P.No.284417The Airports Authority of India Represented by its RegionalExecutive Director Southern Region Meenambakkam Chennai 600 027. ...Petitioner Vs1.The Principal Commissioner & Secretary Land Reforms Chepauk Chennai 600 005.4 18 https: www.mhc.tn.gov.in judis W.P.Nos.11311 to 113108andW.P.No.2844172.The Assistant Commissioner Urban Land Tax163 Karuneegar Streeet Alandur Chennai 600 088.3.The Tahsildhar Urban Land Tax Maduravoyal Taluk Chennai 600 053. ... RespondentsPrayer : Writ Petition filed Under Article 226 of the Constitution of India to issue of Writ of Certiorarified Mandamus calling for the records of the 1st respondent dated 11.11.2013 in Ref.Rc.No.12042 2008 C2 dated 11.11.2013 confirming the order of the 2nd respondent dated 31.01.2008 and 27.02.2008 in ULT ref ULT Case Nos.452to 452p 1401 Porur and the consequent demand of the 3rd respondent dated 19.05.2017 in R.C.1207 2017 A4 and quash the same and further direct the respondents to treat the lands in survey Nos.49 1 50 1 58 55 56 57 67 68 2 207 4 362 2 362 4 206 95 319 1 52 1 53 and 54 measuring a total extent of 898 grounds 72 sq. ft. of Porur Village Ambattur Taluk Thiruvallur District as not taxable under Act 366.For Petitioners: Mr.V.Ramesh imposing tax and rejecting the Revision Petition filed by the petitioner Airport Authority of India are under challenge in the present writ petitions.2. The learned counsel for the petitioner contended that 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 respondentof 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.6 18 https: www.mhc.tn.gov.in judis W.P.Nos.11311 to 113108andW.P.No.2844173. The main contention raised on behalf of the petitioner is 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 Aviations 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.4. The learned counsel for the petitioner reiterated that the Airport Authority of India is a creation by an Act of Parliament and the Act provides for transfer and vesting of the undertakings of the International Airports Authority of India and National Airports Authority of India. It was also aimed for the better administration and cohesive management of Airports and Civil Enclaves across the country where transport services were operated or to be operated and covers all aeronautical communication stations and for the purpose of establishing or assisting in the establishment of Airports. Therefore the petitioner is a “State” within the meaning of Article 12 of the Constitution of India as its functions are directly controlled 7 18 https: www.mhc.tn.gov.in judis W.P.Nos.11311 to 113108andW.P.No.284417by the Ministry of Civil Aviation. 5. Keeping in mind these parameters it is contended that the levy of urban land tax by the Assistant Commissioner is directly hit under Section 29(1)(a) of the Tamil Nadu Urban Land Tax Act. The respondents have not considered any of these aspects with reference to Section 29 of the Act and levied tax and the first respondent Revisional authority also failed to consider the fact that the petitioner is a “State” within the meaning of Article 12 of the Constitution of India and therefore it is to be construed as Central Government for the purpose of grant of exemption under Section 29 of the Act. 6. In this context the learned counsel for the petitioner relied on the judgment of the Hon ble Supreme Court of India in the case of Housing & Urban Development Corporation Limited reported in1 SCC 455 wherein the Apex Court made an observation that “It is clear from a reading of sub sectionof Section 119 that lands and buildings which are the properties of the Union are exempt from property tax” and in paragraph 8 the Hon ble Supreme Court of India made the following observations:8 18 https: www.mhc.tn.gov.in judis W.P.Nos.11311 to 113108andW.P.No.284417“8. From the aforesaid discussion it clearly follows that the land in question being exempt from tax by virtue of Section 119(1) of the Act as it is the property of the Union and furthermore even under Section 120(1) no tax in respect of land could have been levied in the present case on the appellant prior to the same being let to them in 1997.” 7. Accordingly in the said case the appeal filed by the Housing and Urban Corporation Limited was allowed. Relying on the said judgment the learned counsel for the petitioner contended that the same interpretation is to be adopted as far as the Airport Authority of India is concerned and the exemption clause is also contemplated under Section 29 of the Act and thus the orders impugned are liable to be quashed.8. The learned counsel appearing on behalf of the respondents disputed the said contentions by stating that the issues are already settled by the Hon ble Supreme Court of India in the case of Municipal Commissioner of Dum Dum Municipality and others Vs. Indian Tourism Development Corporation and others reported in5 SCC 251. The Hon ble Supreme Court considered the question whether the property is 9 18 https: www.mhc.tn.gov.in judis W.P.Nos.11311 to 113108andW.P.No.284417vested in the International Airports Authority of India under the provisions of the International Airports Authority of India Act 1971 can yet be called the properties of the Union within the meaning of Article 285 of the Constitution of India and therefore the exemption from all taxes imposed by the State or by any authority within a State.9. The issue framed by the Hon ble Supreme Court of India is akin to that of the issue now raised by the petitioner in the present writ petitions. The Hon ble Supreme Court considered the answer given by the Delhi High Court in respect of the said question and the judgment of the learned Single Judge of the Bombay High Court as well as the view taken by the Calcutta High Court considering the exemption clause in the respective Statutes and with reference to the question whether the International Airport Authority of India is exempt from all taxes imposed by the State or by any authority within a State passed the following observations in the case of Municipal Commissioner of Dum Dumwhich reads as under:“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 10 18 https: www.mhc.tn.gov.in judis W.P.Nos.11311 to 113108andW.P.No.284417properties 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.”10. The above findings of the Hon ble Apex Court of India would clear the doubt in respect of the status of the Airport Authority of India. It is ruled in unambiguous terms that the authority cannot therefore invoke the immunity created by Article 285(1) of the Constitution. The levy of property tax by the relevant municipal bodies is unexceptionable.11. The learned counsel for the petitioner referred the judgment of the High Court of Madras dated 11.06.2019 passed in W.P.No.347607 11 18 https: www.mhc.tn.gov.in judis W.P.Nos.11311 to 113108andW.P.No.284417in the case of Chennai Port Trust Vs. The Special Commissioner and Commissioner of Urban Land Ceiling and Urban Land Tax. However the said judgment of the learned Single Judge was taken by way of Writ Appeal before the Hon ble Division Bench in Writ Appeal No.10020 and a judgment was delivered on 01.12.2020 reversing the findings. The relevant paragraph of the judgment of the Hon ble Division Bench is extracted hereunder:“15. Upon examining Section 29(a) of the Urban Land Tax Act we find that it undoubtedly applies to lands owned by the Central or State Government. The learned counsel for the Respondent did not produce any evidence to prove that the Lands were owned by the Central Government and that the Madras Dock Labour Board was only the ostensible owner. Indeed the evidence on record indicates that the Madras Dock Labour Board was both the ostensible and real owner. The other factor to be borne in mind is that the Lands were assessed to urban land tax and that the Madras Dock Labour Board paid urban land tax as and when demanded. Moreover the learned Government Pleader cited the Board Circular dated 30.06.1976 whereby it was expressly provided that lands owned by the Madras Port Trust would not be eligible for the exemption under Section 29(a). In light of the above conclusion that there 12 18 https: www.mhc.tn.gov.in judis W.P.Nos.11311 to 113108andW.P.No.284417is no evidence of ownership by the Central Government Article 285 of the Constitution does not come to the aid of the Respondent. 16. When the facts are considered cumulatively in light of the statute and the principle laid down in Dilip Kumar we are of the view that the Chennai Port Trust failed to establish that it is entitled to an exemption under Section 29(a) of the Urban Land Tax Act. Hence the order of the learned single Judge is not sustainable. Accordingly we allow this writ appeal by setting aside the impugned order. Consequently the connected miscellaneous petition is closed. No costs.”12. With reference to the Chennai Port Trust the very same contention has been raised that the Chennai Port Trust is a “State” within the meaning of Article 12 of the Constitution of India and therefore they are entitled for exemption under Section 29 of the Urban Land Taxes Act. The said contentions are rejected by the Hon ble Division Bench of this Court.13. The learned counsel for the petitioner submitted the land details along with the letter issued by the Airport Authority of India dated 13.07.2021. The land details would reveal that the lands were handed over 13 18 https: www.mhc.tn.gov.in judis W.P.Nos.11311 to 113108andW.P.No.284417to Director General of Civil Aviations and the letter would further state that the Director General of Civil Aviations and Airport Authority of India is wholly owned by the Government of India Ministry of Civil Aviations and therefore they are entitled to claim exemption under Section 29 of the Tamil Nadu Urban Land Tax Act. However now the subject lands are vested with the petitioner Airport Authority of India and the said fact is not in dispute. Question has raised whether the property is vested in the Airport Authority of India can yet be called as the properties of Union within the meaning of Article 285 of the Constitution of India and therefore the exempt from all taxes imposed by the State. The answer to the said question was categorically decided by the Hon ble Supreme Court of India in the case of Municipal Commissioner of Dum Dumof 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.15. The principles settled by the Hon ble Supreme Court of India in the case of Municipal Commissioner of Dum Dumwould squarely apply to the issues raised in the present writ petition and therefore the writ petitioner cannot be construed as Central Government within the meaning of exemption clause as contemplated under Section 29of 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 15 18 https: www.mhc.tn.gov.in judis W.P.Nos.11311 to 113108andW.P.No.284417Appellate 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.16. It is brought to the notice of this Court that the petitioner has already deposited 50% of the demanded tax and the balance tax is to be deposited by the petitioners within a period of four months from the date of receipt of a copy of this order. No costs. Consequently connected miscellaneous petitions are closed.27.07.2021Speaking order Non speaking orderInternet:Yes NoIndex : Yes NoKakTo1.The Special Commissioner & Commissioner Land Reforms Chepauk Chennai 600 005.2.The Assistant Commissioner Urban Land Tax163 Karuneegar Streeet Alandur Chennai 600 088.16 18 https: www.mhc.tn.gov.in judis W.P.Nos.11311 to 113108andW.P.No.2844173.The Tahsildhar Urban Land Tax Tambaram Taluk Tambaram Chennai 600 045.4.The Principal Commissioner & Secretary Land Reforms Chepauk Chennai 600 005.17 18 https: www.mhc.tn.gov.in judis W.P.Nos.11311 to 113108andW.P.No.284417S.M.SUBRAMANIAM J.KakW.P.Nos.11311 to 113108 andW.P.No.28441727.07.202118 18 

Summary: 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 &amp; 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.”