1990 (8) TMI 337 - SC - VAT and Sales Tax

Whether the petitioner is a dealer within the meaning of section 2(d) of the Punjab General Sales Tax Act 1948 and is liable to pay sales tax on its sales turnover? Whether in the circumstances and on the facts of the case no sales tax can be levied in view of the provisions of article 285 of the Constitution? Held that - Appeal dismissed. There is no dispute that the Union of India is the owner of the Northern Railway Departmental Catering Railway Station Pathankot. The goods were purchased by the railways and were sold by the railways. The tax was imposed on the sale of goods. At the time of the sale the goods belonged to the Railways. In view of the provisions of article 285(1) of the Constitution such sales were immune from taxation under the State law. That was also the view of the High Court. The appeal therefore is dismissed but no order as to costs.

Summary

The Supreme Court dismissed the appeal in a case involving sales tax on goods sold by the Northern Railway Departmental Catering at a railway station. The Court held that the sales were immune from taxation under the State law as the goods belonged to the Railways, in accordance with article 285(1) of the Constitution. The decision was based on precedents and no costs were awarded. (Case: Union of India v. State of Punjab [1974] 34 STC 394 (P&H))