{"id":24025,"date":"1999-07-27T00:00:00","date_gmt":"1999-07-26T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/food-corporation-of-india-vs-municipal-committee-jalalabad-on-27-july-1999"},"modified":"2015-08-20T10:13:41","modified_gmt":"2015-08-20T04:43:41","slug":"food-corporation-of-india-vs-municipal-committee-jalalabad-on-27-july-1999","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/food-corporation-of-india-vs-municipal-committee-jalalabad-on-27-july-1999","title":{"rendered":"Food Corporation Of India vs Municipal Committee, Jalalabad &#8230; on 27 July, 1999"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Food Corporation Of India vs Municipal Committee, Jalalabad &#8230; on 27 July, 1999<\/div>\n<div class=\"doc_author\">Author: D Wadhwa<\/div>\n<div class=\"doc_bench\">Bench: D.P.Wadhwa, M.B.Shah<\/div>\n<pre>           PETITIONER:\nFOOD CORPORATION OF INDIA\n\n\tVs.\n\nRESPONDENT:\nMUNICIPAL COMMITTEE, JALALABAD AND ANOTHER\n\nDATE OF JUDGMENT:\t27\/07\/1999\n\nBENCH:\nD.P.Wadhwa, M.B.Shah\n\n\n\n\nJUDGMENT:\n<\/pre>\n<p>D.P. Wadhwa, J.\n<\/p>\n<p>      Food Corporation of India (&#8216;Corporation&#8217; for short) is<br \/>\naggrieved  by  the judgment dated December 13, 1994  of\t the<br \/>\nDivision  Bench\t of  the  Punjab   and\tHaryana\t High  Court<br \/>\ndismissing  its\t writ  petition\t challenging  the  order  of<br \/>\nassessment  of its properties under the Punjab Municipal Act<br \/>\nby   the  second  respondent,\tthe   Municipal\t  Committee,<br \/>\nJalalabad, District Ferozpur in the State of Punjab.\n<\/p>\n<p>      It  is  contended\t before us that the  Corporation  is<br \/>\nexempt\tfrom taxation under Article 285 of the\tConstitution<br \/>\nand that valuation and assessment of the properties has been<br \/>\ncompleted  without  taking  into account the  provisions  of<br \/>\nSection\t 3 of the Punjab Municipal Act under which house tax<br \/>\nis  to\tbe arrived at on the basis of the &#8220;annual value&#8221;  on<br \/>\nwhich the properties can be let.\n<\/p>\n<p>      High  Court  has held that assessment of the  property<br \/>\ntax was based on agreed fair rent as stated by the Municipal<br \/>\nCommittee.   There  is no challenge to this averment by\t the<br \/>\nCorporation.   It  is, therefore, difficult for us  to\thold<br \/>\nthat the agreed rent is not the fair rent and that there has<br \/>\nbeen  any violation of the provisions regarding fixation  of<br \/>\nannual value.  This contention of the Corporation must fail.\n<\/p>\n<p>      The  appellant Corporation is constituted by the\tFood<br \/>\nCorporation  Act, 1964 (for short the &#8216;Act&#8217;).  Under Section<br \/>\n3  of this Act, the Corporation shall be body corporate with<br \/>\nthat  name,  having perpetual succession and a\tcommon\tseal<br \/>\nwith  power,  subject  to  the provisions  of  the  Act,  to<br \/>\nacquire,  hold\tand dispose of property and to contract\t and<br \/>\nmay,  by that name, sue and be sued.  If we refer to Section<br \/>\n42  of\tthe  Act, the Corporation is a\tcompany\t within\t the<br \/>\nmeaning of the Income-tax Act, 1961 and liable to tax on its<br \/>\nincome,\t profits  and  gains.  However,\t under\tSection\t 43,<br \/>\nprovision  of  law  relating to winding up of  companies  or<br \/>\ncorporations  do not apply to the Corporation and it  cannot<br \/>\nbe  placed  in\tliquidation  save by order  of\tthe  Central<br \/>\nGovernment.  It is, thus, apparent that the Corporation is a<br \/>\ndistinct entity from the Union of India.\n<\/p>\n<p>      It  is  submitted\t before us that the  Corporation  is<br \/>\nnevertheless  a statutory corporation incorporated by an Act<br \/>\nof parliament and runs entirely on the subsidies provided by<br \/>\nthe  Central  Government and in fact it has taken  over\t the<br \/>\nrole  earlier  performed by the Directorate of Food  in\t the<br \/>\nGovernment  of India and further that the Corporation has no<br \/>\nprofit\t motives.    Lastly,  it  is  submitted\t  that\t the<br \/>\nCorporation  is\t obliged to  follow  directions\/instructions<br \/>\nissued\tby the Central Government from time to time and\t its<br \/>\nmanagement  is also provided by the Central Government.\t  It<br \/>\nwas,  thus, submitted that for all intent and purposes,\t the<br \/>\nCorporation  is\t nothing but an extended arm of the  Central<br \/>\nGovernment and it is thus exempt from taxation under Article<br \/>\n285 of the Constitution.\n<\/p>\n<p>      Article 285 of the Constitution is set out as under :\n<\/p>\n<p>      &#8220;285.   Exemption of property of the Union from  State<br \/>\ntaxation.-(1)  The  property of the Union shall, save in  so<br \/>\nfar  as Parliament may by law otherwise provides, be  exempt<br \/>\nfrom all taxes imposed by a State or by any authority within<br \/>\na State.\n<\/p>\n<p>      (2)  Nothing in clause (1) shall, until Parliament  by<br \/>\nlaw otherwise provided, prevent any authority within a State<br \/>\nfrom  levying any tax on any property of the Union to  which<br \/>\nsuch  property\twas immediately before the  commencement  of<br \/>\nthis  Constitution  liable or treated as liable, so long  as<br \/>\nthat tax continues to be levied in that State.&#8221;\n<\/p>\n<p>      The  question  that  arises  before  us  is:   If\t the<br \/>\nproperty  of  the  Corporation is property of the  Union  of<br \/>\nIndia  and, thus, exempt from taxation imposed by the  State<br \/>\nor  any authority within a State.  Authority in the  present<br \/>\ncase would include local authority.  A Constitution Bench of<br \/>\nthis  court in <a href=\"\/doc\/319428\/\">Electronics Corporation of India Ltd.  &amp; Ors.<br \/>\nvs.   Secretary,  Revenue Department, Government  of  Andhra<br \/>\nPradesh<\/a>\t [(1999)  4 SCC 458 = 1999 (3) SCALE 123]  has\theld<br \/>\nthat  a\t Government  company is distinct  from\tthe  Central<br \/>\nGovernment  and\t cannot claim exemption from taxation  under<br \/>\nArticle\t  285  of  the\tConstitution.\t The  case  of\t the<br \/>\nCorporation cannot be any different.  The Act under which it<br \/>\nis  constituted\t specifically makes the Corporation  a\tbody<br \/>\ncorporate having the attributes of a company.\n<\/p>\n<p>      <a href=\"\/doc\/1700311\/\">In  State of Punjab &amp; Ors.  vs.  Raja Ram &amp; Ors.<\/a>\t[AIR<br \/>\n1981  SC 1694 = (1981) 2 SCC 66] the question raised was  if<br \/>\nacquisition of land under the Land Acquisition Act, 1894 for<br \/>\nthe  Food Corporation of India was valid as it was said that<br \/>\nCorporation is not a company to which the provisions of that<br \/>\nAct would apply.\n<\/p>\n<p>      Before its amendment in 1984, Section 3(e) of the Land<br \/>\nAcquisition Act defined the expression &#8216;company&#8217; as under:\n<\/p>\n<p>      &#8220;the  expression &#8220;company&#8221; means a company  registered<br \/>\nunder  the Indian Companies Act, 1882 or under the (English)<br \/>\nCompanies  Act,\t 1862 to 1890 or incorporated by an  Act  of<br \/>\nparliament  of the United Kingdom or by an Indian Law, or by<br \/>\nRoyal  Charter\tor  Letters patent and\tincluded  a  society<br \/>\nregistered  under the Societies Registration Act 1860, and a<br \/>\nregistered  society  within the meaning of the\tCo-operative<br \/>\nSocieties  Act,\t 1912  or  any other  law  relating  to\t co-<br \/>\noperative  societies  for  the time being in  force  in\t any<br \/>\nState.&#8221;\n<\/p>\n<p>      The  expression  &#8216;corporation&#8217;  had not  been  defined<br \/>\nearlier which now finds place in clause (cc) of Section 3 of<br \/>\nthe  Land  Acquisition\tAct.  Clause (e) which\tdefined\t the<br \/>\nexpression  &#8216;company&#8217; has also thus been amended.   However,<br \/>\nwe  are concerned with the old definition of &#8216;company&#8217;.\t  In<br \/>\nthis  case  land  was acquired for the Corporation  and\t the<br \/>\nquestion  was  if the Corporation was a company\t within\t the<br \/>\nmeaning\t of Section 3(e) (old) of the Land Acquisition\tAct.<br \/>\nThis  Court after referring to Section 3 of the Act observed<br \/>\nthat  sub-section  (2) thereof clothes the Corporation\twith<br \/>\nthe  attributes\t of a company and it cannot,  therefore,  be<br \/>\ncontended  that the Corporation is not a company within\t the<br \/>\nmeaning\t of the definition of that term appearing in  clause\n<\/p>\n<p>(e)  of\t Section 3 of the Land Acquisition Act.\t This  Court<br \/>\nalso  did  not\taccept the argument that  Corporation  is  a<br \/>\nGovernment Department.\tIt said :\n<\/p>\n<p>      &#8220;A  Government  department has to be  an\torganisation<br \/>\nwhich  is not only completely controlled and financed by the<br \/>\nGovernment  but has also no identity of its own.  The  money<br \/>\nearned\tby  such a department goes to the exchequer  of\t the<br \/>\nGovernment  and losses incurred by the department are losses<br \/>\nof  the Government.  The Corporation, on the other hand,  is<br \/>\nan  autonomous\tbody  capable  of  acquiring,  holding\t and<br \/>\ndisposing  of property and having the power to contract.  It<br \/>\nmay  also sue or be sued by its own name and the  Government<br \/>\ndoes  not  figure in any litigation to which it is a  party.<br \/>\nIt  is\ttrue that its original share capital is provided  by<br \/>\nthe  Central  Government (S.5 of the F.C.  Act) and that  11<br \/>\nout of 12 members of its Board of Directors are appointed by<br \/>\nthat  Government  (S.7\tof  the F.C.  Act)  but\t then  these<br \/>\nfactors\t may at the most lead to the conclusion (about which<br \/>\nwe  express  no\t final opinion) that the Corporation  is  an<br \/>\nagency or instrumentality of the Central Government.&#8221;\n<\/p>\n<p>      The Court further said that even if the Corporation is<br \/>\nan agency or instrumentality of the Central Government, that<br \/>\ndid  not  lead\tto the inference that the Corporation  is  a<br \/>\nGovernment department.\tThe reason is that Act has given the<br \/>\nCorporation   an  individuality\t apart\t from  that  of\t the<br \/>\nGovernment.\n<\/p>\n<p>      Thus  we hold that the Corporation is not exempt\tfrom<br \/>\ntaxation under Article 285 of the Constitution.\n<\/p>\n<p>      The appeal fails and dismissed with costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Food Corporation Of India vs Municipal Committee, Jalalabad &#8230; on 27 July, 1999 Author: D Wadhwa Bench: D.P.Wadhwa, M.B.Shah PETITIONER: FOOD CORPORATION OF INDIA Vs. RESPONDENT: MUNICIPAL COMMITTEE, JALALABAD AND ANOTHER DATE OF JUDGMENT: 27\/07\/1999 BENCH: D.P.Wadhwa, M.B.Shah JUDGMENT: D.P. Wadhwa, J. Food Corporation of India (&#8216;Corporation&#8217; for short) is aggrieved [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-24025","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Food Corporation Of India vs Municipal Committee, Jalalabad ... on 27 July, 1999 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/food-corporation-of-india-vs-municipal-committee-jalalabad-on-27-july-1999\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Food Corporation Of India vs Municipal Committee, Jalalabad ... on 27 July, 1999 - Free Judgements of Supreme Court &amp; 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