Baljinder Singh Sandhu, J

1. The present writ petition has been filed by petitioner –Taleda Square Pvt. Ltd. with the following prayers:

                  “It is, therefore, humbly prayed that this writ petition may kindly be allowed with costs and by an appropriate writ, order or direction -

                  i)        Impugned notification dated 24.08.2016 (Annex.11) issued by the Director cum Special Secretary, Local Self Department & order dated 21.1.2020 (Annex. 12) issued by the Director cum Joint Secretary, Local Self Department, Government of Rajasthan, Jaipur may be declared as ultra vires and in violation of Article 285 of the Constitution of India and section 107 of the Act of 2009 and quashed and set aside.

                  ii)       notice dated impugned notices dated 31.1.2020, 6.5.2022, 31.5.2022 and 3.06.2022 may kindly be quashed and set aside.

                  iii)       That the respondents may kindly be directed to issue Fire NOC without demanding Fire Cess or any fees with regard to premises in question from the petitioner company.

                  iv)      During pendency of the writ petition, if any order is passed or any action is taken against the petitioner prejudicial to his interests, the same may kindly be quashed and set aside.

                  v)       Any other writ order or direction which this Hon'ble Court deem just and proper in the facts and circumstances of the case may kindly be passed in favour of the petitioner.

                  vi)      Cost of the writ petition may kindly be awarded to the petitioner.”

2. The brief facts of the case necessary for adjudication of the present writ petition are that Rail Land Development Authority (hereinafter referred to as 'the RLDA') was constituted under the Railways Act, 2005 with an obligation of commercial development of railway land entrusted to it by the Central Government, Ministry of Railways. The RLDA with an intention to undertake development of Multi Functional Complex (hereinafter referred to as MFC) at Ajmer, invited the bids vide notice dated 18.07.2014 and letter of acceptance was issued in favour of the successful bidder M/s. Smart Hotel Private Ltd., which is the parent company of the petitioner. The M/s Smart Hotel Private Ltd. promoted and incorporated the petitioner company under the provisions of the Companies Act, and created special purpose company for undertaking the development of the site in question. In pursuance thereto, a lease agreement dated 31.03.2015 was executed between the RLDA and the petitioner Taleda Square Pvt. Ltd. (hereinafter referred to as 'the petitioner company') and land measuring 1499.89 square meter was leased out to the petitioner for 44 years, 11 months and 7 days for the purpose of development of the MFC, which is a nature of commercial complex.

3. The petitioner company in pursuance to the lease deed started development and constructed the MFC, however the petitioner company was served with a notice dated 31.01.2020 under Section 194 by the Municipal Corporation, Ajmer under Rajasthan Municipalities Act, 2009 asking the petitioner company to procure the Fire No Objection Certificate (NOC). Thereafter, another notice dated 16.05.2022 was served to the petitioner company demanding Rs.5,03,853/- towards payment of fire cess and fees for fire NOC. Thereafter, on 31.05.2022, another notice dated 31.05.2022 under Section 130 of the Rajasthan Municipalities Act, 2009 was issued to the petitioner company raising demand of Rs.13,41,311/- towards Urban Development Tax. The said tax is calculated on the size of the property as well as existing DLC. However, this notice was replied, but again the Municipality issued a fresh notice to pay urban improvement tax as well as fire cess and fees towards Fire NOC.

4. Aggrieved against the said demand, the petitioner company approached this Court challenging the said notices on the premise that since the property in question is owned by the Railways and vests under the Central Government, therefore, in view of the mandate of Article 285 of the Constitution of India read with section 184 of the Railways Act, 1989, (herein after referred to as the Railways Act) and section 107 of the Rajasthan Municipalities Act 2009, (hereinafter referred to as the Act of 2009), no tax can be levied by the State or by any authority within the State.

5. Mr. Punit Singhvi, Advocate arguing on behalf of the petitioner company has stated that the land in question is vested in the Union of India through Indian Railways. The Land Development Authority is also a statutory authority created under the Railways Act, 1989, and has only been established for development of the railways land for commercial purposes. Therefore, the land ultimately vests in the Union of India. It is stated that Article 285 clearly exempts properties of Union from the State tax. Further, Section 184 of the Railways Act, 1989 also grants immunity to the properties vested in the railways from any kind of tax in aid of the funds of any local authority unless the Central Government, by notification, declares the railways administration to be liable to pay the tax specified in such notification. Since no notification has been issued by the Central Government holding the railways administration to liable to pay the tax in question, the demands raised by the Municipal Corporation, Ajmer is not justified. It is further stated that the urban improvement tax is being levied by the Municipal Corporation under Section 102, and Section 107 of the Act of 2009 provides of exemption from the tax levied by the Municipality under Section 102 and 103, and in the said exemption, lands, buildings, vehicles, conveyance and boats belonging to the Central Government are exempted. Therefore, the notification dated 24.08.2016 of which Clause 2 (xiii), levying the urban development tax upon the properties owned by the Union of India being used for commercial purpose is de hors the provisions of Constitution of India, in as much as the same violates Article 285 as well as contravene Section 184 of the Railways Act, 1984. Therefore, the impugned notification is unconstitutional and ultra vires the parent Act.

6. Learned counsel for the petitioner further challenging the demand of the fee and fire cess, which have been imposed by the order dated 12.01.2020 issued by the Urban Development and Local Self Department, Government of Rajasthan under Sections 337 read with Section 225 of the Act of 2009, has stated that the said cess is nothing but for tax for specific purpose and in view of Article 285 as well as Section 184 of the Railways Act, 1989, the same could not have been demanded from the petitioner company as the same clearly provides for exemption from tax over the premises, buildings build on the railways land, and therefore it is prayed that the order dated 21.01.2020 also deserves to be quashed and set aside. Consequently, it is prayed that the all the impugned notice issued by the Municipal Corporation also be quashed and set aside.

7. Learned counsel for the petitioner has placed reliance on the judgment passed by the Hon'ble Supreme Court in Food Corporation of India Vs. Brihanmumbai Mahanagar Palika & Ors. (Civil Appeal Nos.9350-9351 of 2019); judgment dated 21.12.2017 passed by Bombay High Court in Union of India Vs. Municipal Corporation of Greater Mumbai & Ors. (Writ Petition No.1648 of 2017), and judgment dated 20.02.2025 passed by the Madras High Court in Madurai Multi Functional Complex Private Limited Vs. The Madurai Corporation & Ors. (W.A.(MD) No.484 of 2020.

8. The respondent Municipal Corporation, Ajmer has preferred a reply to the writ petition and denied any such exemption being available to the petitioner company under Article 285 or Section 184 of the Railways Act. The respondent Municipal Corporation has raised a preliminary objection first of all as to the locus standi of the writ petitioner to file the present writ petition seeking exemption under Article 285 and Section 184 of the Railways Act. It is alleged that the Principal Contractor is the M/s Smart Hotel Pvt. Ltd., which is neither the petitioner nor the party to the writ petition and therefore the petitioner company being only a special purpose company is not entitled to file the present writ petition. It is further stated that exemption under Article 285 and Section 184 of the Railways Act is available to the Union of India or the Railways itself and not to the private sector company, who is a lessee and has constructed and developed the MFC for commercial company. It is stated that the railway has transferred the land to the RLDA, and thereafter the same has been leased out by the RLDA to the petitioner company for the purpose of development of MFC. The land in question is on lease with the petitioner company, which is a private company registered under the Companies Act, and is a separate and distinct entity from Union of India and the Railways, enjoining the lease rights. It is alleged that once the land has been vested in RLDA and thereafter leased out to the private company, the land ceases to be the land of the Railways or the Union of India to seek exemption under Article 285 of the Constitution of India as well as Section 184 of the Railways Act, as the land is held by a private company, which is developing the same for commercial purpose. It is further alleged that as per the conditions of the lease agreement itself, Clause 8.3, the obligation to pay all the outgoings, cess, taxes (including municipal taxes), levies, fees, user charges etc. in respect of implementation of the project is on the lessee, and therefore the petitioner company cannot shrink away from its liability to pay the tax and cess made applicable by the Municipal Corporation. While defending the impugned notification and order, it is stated that the Municipal Corporation has acted within the competence of law and is empowered to impose obligatory tax under Section 102 and other taxes under Section 103 of the Municipal Act. The notification dated 24.08.2016 does not violate Article 285 nor contravenes Section 184, as the petitioner company is not the Union of India or Railways and is a separate entity. Further the fire cess/tax has been imposed under Section 103(1)(vii) of the Act of 2009 and the regulations, and while exercising powers under Section 337 and 225, the order dated 21.01.2020 has been issued.

9. It is further alleged that the petitioner company is constructed and is running the commercial complexes without taking completion certificate as per the Municipal Laws. Further no fire NOC has been obtained from the Municipal Corporation and the petitioner company is not following the fire safety norms as provided under the National Building Code of India and Model Building By-laws, 2004, issued by the Government of India. Without fire safety measures no commercial building can be utilized for which the fire NOC, fees/cess has to be paid to the Municipal Corporation, and the fund is used for modernization of the fire safety system of the Municipal Corporation. It is therefore stated that the Municipal Corporation is right in demanding the urban development tax as well as fees for fire NOC and cess from the petitioner company, and it is not entitled for any such exemption as claimed by them and therefore, the writ petition filed by the petitioner deserves to be dismissed with heavy cost.

10. Learned counsel for the respondent Municipal Corporation has relied upon the judgments passed by the Hon'ble Supreme Court in the case of Municipal Corporation of Dum Dum Vs. ITDC reported in (1995) 5 SCC 251, Electronic Corporation of India Ltd. and Others Vs. Secretary, Revenue Department of Govt. of Andhra Pradesh and Others reported in (1999) 4 SCC 458, and Food Corporation of India Vs. Municipal Committee, Jalalabad reported in (1999) 6 SCC 75.

11. The reply to the writ petition has also been preferred by respondent No.5-Union of India, as well as respondent No.6-RLDA. However, in reply, they have merely referred to Article 285(1) and Section 184 of the Railways Act. Further, they have admitted that the land has been leased out to the petitioner company and has been handed over on 03.04.2015 and partly on 30.06.2016 for development of the MFC. It has also been stated that under the lease agreement there was no limitation on the liability to pay all taxes levied by any Government or local authority, and therefore, a prayer has been made for dismissal of the writ petition qua them.

12. We have heard learned counsel for the parties at length and have perused the material available on record, as well as the judgments cited by the respective parties.

13. The core question that comes up for consideration is whether the petitioner company, which is holding the land in question on lease from the RLDA, is entitled to exemption from taxes under Article 285 of the Constitution of India, as well as Section 184 of the Act of 1989, on the premise that the land belongs to the Union of India or the Railways.

14. Article 285 exempts properties owned by the Union of India from taxes levied by the State or by any authorities within the State. Similarly, Section 184 of the Railways Act also exempts properties owned by the Railways from any tax imposed by a local authority, unless the Central Government notifies that the Railway Administration is liable to pay such tax. It is not in dispute that no such notification has been issued by the Central Government.

                  Article 285 reads as under:

                  “Exemption of property of the Union from State taxation

                  15.     (1) The property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State.

                  (2) Nothing in clause (1) shall, until Parliament by law otherwise provides, prevent any authority within a State from levying any tax on any property of the Union to which such property was immediately before the commencement of this Constitution liable or treated as liable, so long as that tax continues to be levied in that State.”

                  Section 184 of the Railways Act reads as under:

                  “184. Taxation on railways by local authorities.—(1) Notwithstanding anything to the contrary contained in any other law, a railway administration shall not be liable to pay any tax in aid of the funds of any local authority unless the Central Government, by notification, declares the railway administration to be liable to pay the tax specified in such notification.

                  (2)      While a notification of the Central Government under sub-section (1) is in force, the railway administration shall be liable to pay to the local authority either the tax specified in the notification or, in lieu thereof, such sum, if any, as an officer appointed in this behalf by the Central Government may, having regard to all the circumstances of the case, from time to time, determine to be fair and reasonable.

                  (3)      The Central Government may at any time revoke or vary a notification issued under sub-section (1).

                  (4)      Nothing in this section shall be construed to prevent any railway administration from entering into a contract with any local authority for the supply of water or light, or for the scavenging of railway premises, or for any other service which the local authority may be rendering or be prepared to render to the railway administration.”

15. Another Section relevant for consideration is Section 107 of the Act of 2009, which also exempts the property vested in the Central Government from municipal taxes under Sections 102 and 103. A reading of Article 285, as well as Section 184 of the Railways Act and Section 107 of the Municipalities Act, 2009, reveals that the Union or the Central Government is exempt from the levy of taxes by the State or any local authority, except when the same is specifically notified by the Central Government and made applicable.

16. The Rail Land Development Authority has been constituted vide insertion of Chapter II-A in the Railways Act, 1989. The RLDA is established under Section 4-A of the Railways Act by the Central Government to exercise the powers and discharge the functions as conferred on it by the Act. The main function of the RLDA is to develop the railway land for commercial use, which is entrusted to it by the Central Government, for the purpose of generating revenue. While exercising powers under Section 4-A of the Railways Act, the Central    Government has framed theRail     Land   Development Authority (Constitution) Rules, 2007 (hereinafter referred to as ‘the Rules of 2007’). The RLDA has a separate and distinct identity, as in the Rules of 2007, it is clearly specified under Rule 4 that the authority, being a statutory authority, shall have perpetual succession and common seal and, by its own name, sue and be sued. Rule 5 provides for entrustment of land to the authority by the Central Government for the purpose of commercial development. Rule 4 and 5 are reproduced as under:

                  “4. Location of the Authority (1) The head office of the Authority shall be in National Capital Region of Delhi and the Authority may also establish offices or agencies at other places in India.

                  (2) The Authority as a statutory body shall have perpetual succession and a common seal and may by its own name sue and be sued.

                  5. Entrustment of Land to the Authority and its functioning.- The Central Government shall, at the earliest, after the establishment of the Authority, entrust to the Authority in writing, such sites for development of railway land and air space in terms o sub-section (2) of section 4(D) of the Act as the Central Government may deem fit and the proposed working of the Authority shall be as follows:-

                  (a) Potential sites for commercial utilization shall be identified either by Central Government or by the Authority in consultation with the Central Government. If the identified land is not required for operational purposes or future expansion, then the site will be entrusted to the Authority for commercial development.

                  (b) The Authority will carry out necessary market survey to assess the potential and work out the best mode of commercial development from the angle of revenue returns and accordingly proceed with the bidding process. The decision to accept or reject offers should be taken at an appropriate level within the Authority itself.

                  (c) Developer will be finalized through transparent, open, fair and competitive bidding process and all the earnings realised will go to the Central Government.

                  (d) Where commercial development of site entrusted to the Authority under clause (ii) of sub-section (2) of section 4(D), involves construction or redevelopment or modifications to railway station building and/or yards, the detailed plans for such development shall be got approved by a Committee consisting of one nodal officer each from Authority and railway administration and the Central Government shall ask the railway administrations to nominate one nodal officer for such purpose.

                  (e) The Authority may seek a review from the Central Government of its decision regarding any site entrusted for preparation of a scheme under clause (i) of sub-section (2) of section 4D, of the Act, or for commercial development under clause (ii) of sub-section (2) of section 4D of the Act and the decision of the Central Government in this regard shall be final.

                  (f) The Authority shall not take up commercial development of railway land or air space at any site unless specifically entrusted to it by the Central Government under clause (ii) of sub-section (2) of section 4D of the Act.

                  (g) The Authority shall prepare the scheme or schemes for use of railway land as assigned by the Central Government under clause (i) of sub-section (2) of section 4D of the Act.

                  (h) The Authority shall carry out any other work or functions as may be entrusted to it by the Central Government, by order in writing under clause (iv) of sub-section (2) of section 4D of the Act.”

17. The RLDA has framed the RLDA (Development of Land and other Works) Regulations, 2012, which provides for manner and other conditions of development of railway land. Regulation 3 gives power to the RLDA to grant lease of land to developers for development of the same at their cost. Clause 15 clearly provides that the development of the railway land shall conform to the local master plan and the building bye-laws of the area where the land is located. Therefore, the regulations clearly make the building bye- laws applicable to the projects of the RLDA or its lessee.

18. In the present case, railway land in question at Ajmer was entrusted to the RLDA for development of the same for commercial purposes. The RLDA thereafter issued notice inviting tenders for development of the MFC and the successful bidder was M/s Smart Hotel Pvt. Ltd. M/s Smart Hotel Pvt. Ltd. constituted the petitioner company, which is a special purpose company for the purpose of development of MFC, and the lease agreement dated 31.03.2015 was executed between the RLDA and the petitioner - Taleda Square Pvt. Ltd. for construction and development of the MFC, and land measuring 1499.89 square meters was handed over on lease of 44 years, 11 months and 7 days for the amount specified in the agreement. Therefore, the land in question is now with the petitioner on lease, which is a private limited company. The petitioner company is to carry out construction, development, marketing, operation and maintenance of this commercial project. The petitioner company is incorporated under the Companies Act and has a separate entity of its own, distinct from the RLDA or the Central Government.

19. The question regarding the tax exemption under Article 285 of the Constitution of India on the properties vested in the statutory corporation came up for consideration before the Hon’ble Supreme Court in Municipal Corporation of Dum Dum v. ITDC’s case (supra), wherein the Hon’ble Supreme Court held that, like the companies, the statutory corporations which are incorporated under a statute have their own entity, separate and distinct from the Central Government, and properties of such corporations cannot be said to be of the Central Government. The Hon’ble Court observed as under:

                  “34.Reference may be made in this connection to the decision of this Court in Western Coalfields Limited v. Special Area Development Authority (1982 (1) S.C.C.125). Certain government companies incorporated under the Companies Act, the entire share capital whereof was held/owned by the Government of India claimed exemption from State taxation under Article 285(1) of the Constitution. The said plea was rejected by this court holding that merely because the entire share capital is owned by the Government of India it cannot be held that companies themselves are owned by the Government of India. It was observed that the companies which are incorporated under the Companies Act have a corporate personality on their own distinct from that of the Government of India and that the lands and buildings are vested in and owned by the companies whereas the Government of India only owns the share capital. Reliance was placed upon certain decisions of this Court including the decision in Andhra Pradesh State Road Transport Corporation. We are of the opinion that the said principle applies equally in the case of a statutory corporation. The statutory corporation is constituted by or under a statute as against the companies (including government companies) which are registered under and governed by Indian Companies Act, 1956.

                  35. For all the above reasons, we are of the opinion that the International Airports Authority of India is a statutory corporation distinct from the Central Government and that the properties vested in it by Section 12 of the Act cannot be said to have been vested in it only for proper management. After the date of vesting, the properties so vested are no longer the properties of the Union of India for the purpose of and within the meaning of Article 285. The vesting of the said properties in the Authority is with the object of ensuring better management and more efficient operation of the airports covered by the Act. Indeed that is the object behind the very creation of the Authority. But that does not mean that it is a case of limited vesting for the purpose of better management. The Authority cannot, therefore, invoke the immunity created by Article 285(1) of the Constitution. The levy of property taxes by the relevant Municipal bodies is unexceptionable.”

20. The Hon’ble Supreme Court in Electronics Corporation of India Ltd. case (supra) has considered the issue of exemption under Article 285 of a company which was holding the lease from the Central Government. Similar to the facts and circumstances of the present case, the appellant company, Electronics Corporation of India Ltd., was lessee of the land which belonged to the Department of Atomic Energy, Government of India, for establishing its plant and machinery, and the demand of tax was raised by the State on the said land, which was challenged by the company.

21. The contention of the appellant company was that the land was leased out by the Department of Atomic Energy, Union of India, to it for an industrial and commercial purpose, and therefore continued to be the property of the Central Government, and was therefore exempt from taxation under Article 285 of the Constitution. The Hon’ble Supreme Court, upon examining the decisions of the Apex Court, rejected the contention of the appellant company, and held that the appellant company was a separate and distinct juristic entity and that the State was entitled to levy tax on the land in its occupation, as Article 285 was not attracted to land leased by the Union for commercial or industrial use. The Court, while considering the definition of 'owner' under the relevant State Act, which included a lessee of land owned by the Central or State Government when such land was leased for commercial, industrial or other non- agricultural purposes, held that so long as the petitioner company was holding the land as a lessee, it was not entitled to claim the protection under Article 285 of the Constitution. The statutory provision was applied subject to the constitutional position under Article 285, and reliance on the statutory definition was only for the purpose of identifying the lessee as the taxable entity, and not for determining the applicability of Article 285.

22. The Apex Court in the said case specifically dealt with property leased by the Department of Atomic Energy, a department of the Central Government, to a company, including a Government company, and held that even if the entire share capital of the company was held by the Government of India, the company would nevertheless have a legal existence distinct from that of the Government of India. On this reasoning, it was held that the State Government was entitled to levy and collect the tax. The observations of the Court were as under:-

                  “4. In 1963 the State of Andhra Pradesh had granted a large area of land to the Department of Atomic Energy of the Central Government. In 1964 the Department of Atomic Energy gave 220.25 acres ("the said land") there out to the appellant Company. On 1-10-1978, the first respondent issued to the appellant Company notices of demand for non -agricultural assessment on the said land under the Act. For the period 1970-71 to 1973-74 the sum demanded was Is 1,91,189.68. For the period of 1974-75 to 1978-79 the sum demanded was Is 11,98,826.32.

                  5. The appellant Company filed a writ petition in the High Court of Andhra Pradesh impugning the said notices of demand. The contention of the appellant Company in the writ petition, as set out in the judgment and order under appeal, was that it was the lessee of the said land which belonged to the Union of India and since the property of the Union of India could not, by virtue of Article 285 of the Constitution, be taxed by a State Legislature, the Act did not apply to the said land and, accordingly, no demand thereunder could be made

                  "upon the petitioner, which is a lessee of the Union of India. It is stated that an area of approximately 1000 acres was granted by the State Government to the Department of Atomic Energy, Government of India, and that the Department of Atomic Energy, in turn, leased out an extent of 280.25 acres to the petitioner- Corporation for establishing its plant and machinery. It is further contended that out of the extent granted to the petitioner an extent of 29 acres is covered by building, an extent of 12 acres by roads and the rest of the area is meant for future expansion. It is also submitted that an extent of 14.25 acres is being used for agricultural purposes".

                  6. The response on behalf of the State Government to the writ petition was contained in an affidavit by N. Janakiramulu. The tenor of the affidavit was that the Act had been amended by Act 28 of 1974 and that, thereby, the appellant Company had become liable to pay non-agricultural assessment upon the said land.

                  7. The High Court, by the principal judgment and order (which is reported as Electronics Corpn. of India Ltd. v. Secy., Revenue Dept., Govt. of A.P.) held that Article 285 was not attracted and that the State Government was entitled to levy and collect the non-agricultural assessment from the appellant Company so long as it continued to be a lessee of the Central Government in respect of the said land. It clarified that the assessment could be levied only upon land which was actually used for any of the specified purposes, namely, commercial, industrial or any other non-agricultural purpose, including residential purpose. What extent of the said land was so used and what was the appropriate rate applicable was a matter for the assessing authority to decide. The appellant Company was permitted to file an appeal to the appellate authority under the Act against the impugned demands, wherein it would be open to the appellant Company to establish the actual extent of land used for the aforesaid purposes. The applicable rate could also be ascertained in such an appeal.

                  14. It is the case of the appellant Company in its writ petition that it is the lessee of the Department of Atomic Energy of the Union of India in respect of the said land. The said land, therefore, is of the ownership of the for an industrial and commercial purpose, is land to which the Act applies. By virtue of the amended definition of "owner" under Section 2 (1) of the Act, the appellant Company is the owner of the said land and by virtue of Section 3, is liable to pay non-agricultural assessment thereon.

                  15. A clear distinction must be drawn between a company and its shareholder, even though that shareholder may be only one and that the Central or a State Government. In the eye of the law, a company registered under the Companies Act is a distinct legal entity other than the legal entity or entities that hold its shares.

                  16. In Western Coalfields Ltd. v. Special Area Development Authority this Court reviewed earlier judgments on the point. It held that even though the entire share capital of the appellant before it had been subscribed by the Government of India, it could not be predicated that the appellant itself was owned by the Government of India. Companies, it was said, which are incorporated under the Companies Act, have a corporate personality of their own, distinct from that of the Government of India. The lands and the buildings in question in that matter were vested in and owned by the appellant. The Government of India only owned the share capital.

                  17. In Rustom Cavasjee Cooper v. Union of India it was held: (SCC p. 273, para 11)

                  “11. A company registered under the Companies Act is a legal person, separate and distinct from its individual members. Property of the Company is not the property of the shareholders. A shareholder has merely an interest in the Company arising under its Articles of Association, measured by a sum of money for the purpose of liability, and by a share in the distributed profit."

                  18. In Heavy Engineering Mazdoor Union v. State of Bihar this Court held that an incorporated company has a separate existence and the law recognises it as a juristic person, separate and distinct from its members.

                  19. We are, in the premises, left in no doubt that the State Government was entitled to levy non-agricultural assessment upon the said land and recover it from the appellant Company.

                  20. Learned counsel then submitted that, in any event, the recovery of lion agricultural assessment in respect of the said land could not have been effected from the appellant company by reason of the application of the principle of promissory estoppel. In this behalf he referred to a letter dated 7-2-1967 addressed by the Under Secretary to the Government of India to the Secretary' of the Government of Andhra Pradesh, Industries Department, in regard to the "transfer of land to the Department of Atomic Energy for the location of the Electronics Plant and other plants." The letter stated that it had been agreed by the State Government that this land would be exempt from the levy of tax under the Act "irrespective of whether the plants are managed departmentally or through a Public Section Undertaking". The letter requested that "notifications exempting the lands already handed over to the Department of Atomic Energy or to be handed over in future from levy of tax under Andhra Pradesh Act 14 of 1963, while vesting in the Department of Atomic Energy or in public sector projects would also require to be issued." The issuance of the same was, therefore, requested. In reply, the Deputy Secretary of the Government of Andhra Pradesh, Industries Department, stated on 17-10-1967 that "no separate notification is required exempting the land given to the Atomic Energy Department for establishment of Atomic Energy Complex at Hyderabad from payment of non-agricultural assessment under the A.P. Non- Agricultural Assessment Act so long as the units are run by the Government of India in Public Sector." It was contended by learned counsel that the appellant company had acted upon this promise. Accordingly, the State Government was bound by its promise and was estopped from going back upon it

                  21. There are two short answers to this contention. In the first place, there can be no estoppel against a statute. In the second place, the letter dated 17-10-1967 needs to be. carefully read. It says that no notification was required for exempting the land from payment of non-agricultural assessment "so long as the units arc run by the Government-of India in Public Sector". The appellant company is a separate and distinct legal entity that runs its own industry. The letter dated 17th October, 1967 cannot be read as promising exemption to companies, though their shares be held wholly by the Union of India.

                  22. Mr. Dholakia, learned counsel for M/s. Pare) Investment and Trading Co. Limited (appellant in Civil Appeal Nos.3937-38 of 1990), adopted the submissions aforementioned. He submitted that Article 285 was intended to protect public revenues; the shares of the appellant companies being fully owned by the Central Government, their funds were public revenues. It was, therefore, necessary to read down the provisions of Section 2(j) and Section 12 of the Act to exclude therefrom all but private owners and lessees of land. The question of reading down comes in if it is found that these provisions are ultra vires as they stand. We have held that these provisions are not ultra vires because Article 285 does not apply when the property that is to be taxed is not of the Union of India but of a distinct and separate legal entity. Each of the appellants being companies registered under Companies Act, they are entities other than the Union of India. The question of reading down does not, therefore, arise.”

23. Applying the aforesaid principles to the facts of the present case, it is not in dispute that the land belonging to the Railways, entrusted to RLDA, has been leased to the petitioner company for a period of about 45 years and remains in its possession and enjoyment for industrial/commercial purposes. The petitioner is a company incorporated under the Companies Act and is a juristic entity distinct from the Railways or the Union of India. The material consideration is that the land stands leased to the petitioner and is utilised by it in its own right. In view of the law laid down by the Hon’ble Supreme Court in Electronics Corporation of India Ltd.(supra), once the Union has parted with possession of the land by way of lease, such land does not continue to enjoy immunity under Article 285 of the Constitution in the hands of the lessee. Consequently, the petitioner cannot claim exemption from levy of tax merely on the ground of continued ownership of the land by the Central Government, and the State is competent to levy and recover tax in accordance with law.

24. The ratio laid down in Electronics Corporation of India Ltd. (supra) was followed by the Apex Court in Food Corporation of India v. Municipal Committee, Jalalabad (supra),wherein the Hon’ble Court held that the corporation, being a juristic entity distinct from the Union of India, is not exempt from taxation under Article 285 of the Constitution. The Court held as under:

                  “7. The question that arises before us is: If the property of the Corporation is property of the Union of India and, thus, exempt from taxation imposed by the State or any authority within a State. Authority in the present case would include local authority. A Constitution Bench of this court in Electronics Corpn. of India Ltd. & Ors. vs. Secy., Revenue Dept., Govt. of A.P. has held that a Government company is distinct from the Central Government and cannot claim exemption from taxation under Article 285 of the Constitution. The case of the Corporation cannot be any different. The Act under which it is constituted specifically makes the Corporation a body corporate having the attributes of a company.”

25. Recently, the Hon’ble Supreme Court, in Food Corporation of India v. Brihanmumbai Mahanagar Palika (supra), considered and approved the proposition laid down in Electronics Corporation of India Ltd. (supra) and Food Corporation of India v. Municipal Committee, Jalalabad (supra). This judgment has been relied upon by the petitioners; however, the same does not support their case. In fact, in paragraph 37, the Court considered the relevance of the lease and specifically noted that the FCI was not in occupation of the go-downs as a lessee, nor was any rent or lease amount being paid by the FCI. The FCI was only occupying the go- downs owned by the Government of India for the purpose of storage of goods and had neither constructed the go-downs; therefore, it was entitled to exemption under Article 285.

26. In Madurai Multi Functional Complex Private Limited (supra), relied upon by the petitioner, the Madurai Bench of the Madras High Court, after considering the decision of the Hon’ble Supreme Court in Electronics Corporation of India Ltd. (supra), held that a local body could not levy property tax on a commercial building developed by the petitioner therein, who was a sub-lessee from IRCON. However, with respect, we are unable to persuade ourselves to adopt the said view, as, in our considered opinion, the principles laid down by the Hon’ble Supreme Court, when applied to the facts of the present case, warrant a different conclusion.

27. The judgment of the Bombay High Court is also of no assistance to the petitioner, as the same pertains to hoardings put up on railway premises and does not deal with any property leased out and handed over for construction and development purposes. The said judgment is, therefore, clearly distinguishable on the facts of the present case. Even otherwise, once the issue stands covered by the ratio laid down by the Hon’ble Supreme Court, any reliance placed on decisions of the High Courts is of no assistance to the petitioner and does not call for further consideration.

28. Therefore, in view of the findings recorded herein-above, the contention of the petitioner company cannot be acceded to, and it is held that the petitioner is not entitled to claim exemption under Article 285 of the Constitution. Further, Section 184 of the Railways Act, 1989 and Section 107 of the Rajasthan Municipalities Act, 2009 are statutory provisions proceeding on the same principle as Article 285 of the Constitution, in so far as they relate to exemption of property of the Union from local levies, and operate subject to the constitutional mandate. They do not constitute an independent source of exemption. Consequently, once the petitioner is held not entitled to the protection of Article 285, no separate or independent exemption can be claimed under the aforesaid statutory provisions.

29. It will also be relevant to submit here that as per the terms and conditions laid down in the General Conditions of Lease Agreement (GCLA), number 2.3, the commercial complex project is to be constructed, operated and maintained by the petitioner company. The general obligations of the lessee relating to the project is defined under Article 8. Article 8.3 specifically provides that the lessee has agreed to pay all outgoings, cess, taxes (including municipal taxes), levies, import duties, fees (including any license fees), rates and other user charges (including those applicable for existing utility connections) and any other dues, assessments or outgoings payable in respect of implementation of the Project, and it was agreed that the RLDA shall not be liable to pay the same. Further, as per Article 25.2, the lessee is under obligation to conform to the provisions of all applicable laws relating to the project and regulations and bye-laws of any local authority, and also to pay all fees and taxes payable to any authority in respect thereof. Therefore, the lease agreement itself fixes obligation on the petitioner company to pay the tax and fees levied by the State or the Municipal Authority, as the same has been accepted by the petitioner company. Therefore, now the petitioner company cannot shrink away from its responsibility and is stopped from raising the defence that it is not liable to pay the said tax and fees.

30. The petitioner company has also challenged the notification dated 24.08.2016 on the ground that, under Clause 2(xiii), tax has been levied on projects owned by the Union of India when used for commercial purposes, which, according to the petitioner, violates Article 285 of the Constitution and Section 184 of the Railways Act. It is true that the notification states that it applies to commercial projects of the Central Government. However, the notification cannot be interpreted in a manner that overrides the constitutional protection granted under Article 285. The notification has to be read as being subject to Article 285 of the Constitution. Accordingly, if any property is entitled to exemption under Article 285, such property cannot be taxed merely on the basis of the notification. On the other hand, where Article 285 does not apply, the notification would operate in accordance with its terms. As already held above, the petitioner company, being a separate juristic entity and holding the land as a lessee for commercial purposes, is not entitled to the protection under Article 285. Therefore, the notification dated 24.08.2016 clearly applies to the petitioner, and the levy of tax thereunder is valid.

31. Learned counsel for the petitioner has also challenged the order dated 21.01.2020 issued by the Local Self Government Department, Government of Rajasthan, whereby the requirement of obtaining a fire safety certificate/fire NOC has been imposed and fire cess has been levied as reflected in Table-2. It is submitted that the same is beyond the enabling provisions of Sections 337 and 225 of the Act. Though the contention has been raised, the petitioner has failed to substantiate the same. On consideration of the statutory provisions, it is seen that Section 103(2)(vii) confers power upon the Municipality to impose or levy fire tax, subject to any general or special orders of the State Government. Section 337 empowers the State Government to make rules and issue orders for carrying into effect the provisions of the Act, and clause (2)(xxiv) thereof authorises the prescription of the rate, date and manner of imposition and levy of taxes. When these provisions are read together, no infirmity is found in the notification, and the same has been issued within the competence of law.

32. Further, the ground seeking exemption from fire cess/tax under Section 107 of the Municipal Act also does not survive, as it has already been held herein-above that the petitioner is not entitled to exemption either under Article 285 of the Constitution or under Section 184 of the Railways Act. Consequently, there is no illegality in the imposition of fire cess or in requiring the petitioner to obtain a fire safety certificate/fire NOC.