KARYAPALAK ENGINEER Vs. RAJASTHAN TAX BOARD

JUDGEMENT

(1.) THE precise controversy which has been raised by the petitioners in this group of cases is whether Article 285(1) of the Constitution of India, which exempts the property of the Union of India from imposition of all taxes by the State extends to the levy of Sales tax imposed by any enactment of the State on any transaction which can properly constitute a sale for the purpose of levy of tax on sale or purchase of goods. In exercise of the powers conferred under Entry -54 of the State list through the Law enacted by the State legislature.

(2.) PROVISION Of The Constitution: For appreciating the contours of the controversy whether the immunity from imposition of tax envisaged Under Article 285 of the Constitution of India is absolute in terms irrespective of the nature of tax and reaches in -direct taxes also or the immunity is confined to the taxes leviable on property directly, it will be profitable to refer to the provisions of Articles 285, 287 and 289 of the Constitution of India in extenso, before embarking upon an enquiry to find the answer:

(3.) DECISION In A.P. State road Transport Corp. v. I.T.O. : [1994]52ITR524(SC) One has to keep in mind that the aforesaid decision not being of adjudicating nature but only in the nature of an advice to President does not bind the Court tendering the advice. For the purpose of Article 141 it binds all other Courts in India, as declaration of law subject to any judgment tendered by Supreme Court is an adjudication of the issue. The opinion rendered by Supreme Court in Re: Sea Customs Act, 1878, Section 20(2) was referred to by the Supreme Court in Andhra Pradesh State Road Transport Corporation v. Income Tax Officer : [1994]52ITR524(SC) . That was a case where Andhra Pradesh State Road Transport Corporation also claimed' exemption from union taxes on its income by dint of the provisions of Article 289(1) of the Constitution of India. The Constitution Bench of 5 Judges of the Supreme Court, four of whom were members of 9 Judges Bench which has rendered the opinion in Re: Sea Customs Act, 1878, Section 20(2), opined as under: