In Brief
The Food Corporation of India (FCI) challenged the demand by the Municipal Corporation of Greater Mumbai for property tax on godowns located on Central Government land. The Supreme Court held that Central Government property is exempt from property tax under Article 285(1) of the Constitution. The exemption under Article 285(2) applies only to properties that existed and were liable to tax before the Constitution's commencement; the godowns were constructed after 1964, hence exempt. However, the Court clarified that service charges for water and other municipal services are not property taxes and can be recovered from the FCI.
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