Tamil Nadu - Madurai

No tax exemption for PSUs: court

MADURAI: Central Public Sector Undertakings (PSUs), statutory corporations and such other entities cannot claim exemption from property tax, the Madras High Court has ruled.

Dealing with an appeal suit filed in the Madurai Bench by the Central Warehousing Corporation against Thanjavur municipality, Justice A. Selvam said that only government properties were not liable to be taxed as per a 1994 circular.

He relied on two judgments, one passed by the Jammu and Kashmir High Court in 2001 in Hotel Corporation of India’s case and another by the Delhi High Court in International Airport Authority of India vs Municipal Corporation of Delhi in 1991.

In the first judgment, it was held that Hotel Corporation of India, a subsidiary of Air India, a statutory corporation was a legal entity, distinct and separate from the Centre. It had a corporate personality of its own. The High Court had said that lands and buildings in respect of which tax had been levied under the Jammu and Kashmir Urban Immovable Property Tax Act, 1962 were owned by the Hotel Corporation and not by the Government. The Delhi High Court had ruled that buildings of the international airport were subject to municipal tax as they were vested with the Airports Authority of India and not with the government.

“From a close reading of the decisions, it is clear that plaintiff (warehousing corporation) does not come within the purview of Central Government and so, the defendant (Thanjavur Municipality) is empowered to levy taxes,” Mr. Justice Selvam said.

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