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TMI Blog2017 (4) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... 2001 - - - Dated:- 18-4-2017 - S. C. Dharmadhikari And Prakash. D. Naik, JJ. Mr. Suresh Kumar for the petitioner Ms. Jyoti Chavan Assistant Government Pleader for the respondent ORDER P. C. 1. By this writ petition under Article 226 of the Constitution of India, an interim order has been challenged by M/s. Western Railway Canteen/Catering Services. 2. The only contention and which has prevailed throughout is that the departmental catering service being a property of the Union of India through General Manager, Western Railway, it squarely falls within the exemption provision and particularly carved out by Article 285 of the Constitution of India. That exempts property of the Union from the State taxation. 3. The next contention is that the definition of the term dealer would not include the Railway or the Union of India and any attempt which is now made by the amendment to include it is beyond the competence of the State legislature. 4. After having heard both sides, we do not think that these contentions should detain us. In Sales Tax Application No. 4 of 2002 decided on 14th August, 2003, a Division Bench of this court, speaking thorough the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) S.T.C. 437, the Railway Departmental Catering is immune from sales tax in view of Article 285(1) of the Constitution of India. The applicant further contends that this controversy is finally settled by the judgment of the Apex Court in the case of Collector of Customs v. State of West Bengal, 1999(113) S.T.C. 167; wherein it was held by the Apex Court that the benefit of Article 285(1) is not applicable to the transaction of sale of goods. Thus, according to the applicant, right from 27th April, 1970 to 30th July, 1998 i.e. till the decision of the Apex Court in the case of Collector of Customs v. State of West Bengal, (supra) liability to pay tax on catering was debateable, as such catering department has not collected any tax nor paid the same. The Catering Unit of the Central Railway carried a bona fide impression that such activities are not carried on commercial basis but a service to the travelling passengers. In this backdrop, the learned Counsel for the applicant contended that remission in interest though is a discretionary but the same has to be exercised judiciously with proper application of mind and proper judicious approach in a fair, just and reasonable manner. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Public Works Department, relying upon the same constitutional provision, contended that the Rajasthan Sales Tax Act would not be applicable insofar as its activities are concerned and that it would not be a dealer within the scheme of that Act. The said contention was negatived by the Hon'ble Supreme Court of India in the following words:- 12. Having heard the learned counsel for the parties and having perused the judgment of the High Court and the relevant clause in the agreement between the appellant and their contractors concerned we are satisfied that the questions involved in these appeals are no more resintegra. This Court as far back as in the year 1963 in a presidential reference case under Sea Customs Act held: The bar of Article 289 of the Constitution of India does not apply to indirect tax like Customs duty, Central Excise duty, Sales Tax etc. 13. In the said case it was held that exemption of property from tax contemplated in Article 289 was confined to direct tax on property and not to the levy of indirect taxes. The ratio of the said judgment though delivered in context of Article 289, applies to the exemption in favour of the Union of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax had been imposed on such sale. In view of the provisions of Article 285, such sale was immune from taxation under the State law. 4. It would appear that no real arguments were advanced before this Court by the appellant-State and the judgment of this Court in Sea Customs Act (1878), S. 20(2), AIR 1963 SC 1760 (1964) 3 SCR 787 was not pointed out. In the Sea Customs Act case a nine-Judge Bench of this Court opined by a majority, that Article 285 envisaged immunity from direct taxes and not from indirect taxes such as sales tax. With specific reference to sales tax, this Court said: We may in this connection contrast sales tax which is also imposed with reference to goods sold, where the taxable event is the act of sale. Therefore, though both excise duty and sales tax are levied with reference to goods, the two are very different imposts; in one case the imposition is on the act of manufacture or production while in the other it is on the act of sale. In neither case therefore can it be said that the excise duty or sales tax is a tax directly on the goods for in that event they will really become the same tax. 5. The decision in the Sea Customs Act case was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the purpose of performance, the contractor was bound to procure materials. But in order to ensure that quality materials are procured, the PWD undertook to supply such materials and stores as from time to time required by the contractor to be used for the purpose of performing the contract only. The value of such quantity of materials and stores so supplied was specified at a rate and got set off or deducted from any sum due or to become due thereafter to the contractor... 20. An attempt to distinguish the judgment in 'Goyal's case on facts came to be rejected by this Court in the above case of Rashtriya Ispat Nigam Ltd. 21. In the instant case also by the use or consumption of material supplied in the work of construction, there was passing of property and by virtue of receipt of value of such transferred property by way of adjustment in bills the consideration has also passed which in our opinion satisfies the definition of 'sale' in the local Sales Tax Act. 22. In Cooch Behar Contractors Association Vs. State of West Bengal and Ors. (1996) 10 SCC 380 this Court followed the decision in M/s N.M. Goel Co. (supra) and considering a sim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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