Constitution of India, 1950:

Articles 285(1) and 298-Property tax-Levy on property of Union o India vesting in statutory corporation-Held: not exempt from tax.

International Airports Authority Act, 1971:

Sections 3(2) and 12-Authority-A distinct juristic entity created for carrying on commercial activity Properties vested in it-No longer the proper- ties of Union of India-Not a limited vesting for the purpose of better management Letter and Certificate-Asserting properties belonged to Union of India Did not represent a decision Not binding on the Municipal Cor poration as it was not heard.

Section 31-Authority Claiming and obtaining benefits of depreciation under the Income Tax Act, 1961 for more than twenty years-Held: it could not claim that the properties did not belong to it.

Section 34-Authority-supersession of Vesting of properties "Owned" or "controlled by it in the Central Government Held: usual regulatory provision and did not imply that the properties belonged to the Union of India.

Delhi Municipal Corporation Act, 1957:

Sections 113 and 119-Municipal Corporation-"Authority within a state-Not competent to levy taxes upon the property of the Union of India.

Administrative Law:

Declaration by Government under a provision Valid only if there was a dispute Not binding on third party which was not heard.

Words and Phrases: "vest" and "vesting" Meaning of - In the context of Section 16(1) of the International Airport Authority Act, 1971.

The International Airport Authority of India granted a licence in respect of a portion of land vesting in it in favour of the respondents, whereupon the latter had constructed a hotel. The appellants levied property taxes upon the said land and the hotel building constructed thereon and made a demand therefore on the respondents. The respondents filed a writ petition in the High Court challenging the said demand. The High Court allowed the petition. Aggrieved by the High Court's judgment, the appellants preferred the present appeal.

On behalf of the respondents it was contended that the expression "vesting" had different shades of meaning and did not necessarily mean the vesting of ownership; that the land for which licence was given belonged to the Union of India and thus exempt from tax; that Section 34(2) (c) of the International Airport Authority Act, 1971 provided for "vesting" of the property in the Union of India; that Section 34(2) (c) of the Act used both the expressions "owned" and "controlled" which meant properties owned by the Union of India and also controlled by it; and that the Government of India had decided under Section 12(3) of the Act vide letter and Certificate that the properties belonged to the Union of India which decision was binding of the appellants.