In Brief
A property in Lucknow declared as enemy property under the Enemy Property Act, 1968, vested in the Custodian of Enemy Property. The respondent, a lessee, was assessed for property tax and water tax by the municipal corporation. The High Court held the property exempt from taxation as enemy property. The Supreme Court reversed this, holding that vesting in the Custodian does not transfer ownership to the Union of India. The Custodian acts only as a trustee for management. Enemy property is not Union property under Article 285 of the Constitution. However, since the property was taxable before the Constitution under prior law, the municipal corporation may levy taxes under the saving clause of Article 285(2). The appeal was allowed, with tax demands permitted from the 2024-2025 fiscal year onward.
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