In Brief
The Food Corporation of India (FCI), a Central Government agency, challenged a property tax demand by the Brihanmumbai Mahanagar Palika (municipal corporation) for godowns owned by the Government of India. The High Court had held the FCI liable as occupier. The Supreme Court allowed the appeal, holding that Central Government-owned property is exempt from municipal property tax under Article 285 of the Constitution. Ownership of the property, not occupancy, determines tax liability. However, the Court clarified that exemption from property tax does not extend to service charges for services rendered by the Corporation, and directed it to conduct a fresh enquiry to determine rateable value.
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