TMI Blog2004 (6) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... taking recourse to the special mode of recovery as provided under section 27 of the Act as a result of which part of the amount demanded has been debited by the Reserve Bank of India from the petitioner's bank account to the respondent-authorities. It is also prayed that the Reserve Bank of India be restrained from debiting further amount at the instance of the respondent-sales tax authorities of the State of Bihar and the respondent-sales tax authorities of the State be also restrained from taking steps in pursuance of the demand notices. 2.. The petitioner's case is that the Railways in general and the East Central Railway in particular are the properties of the Union of India. The Eastern Railway had catering department. Later on the East Central Railway has been created with effect from October 1, 2002 consisting of Danapur, Dhanbad, Mughalsarai, Sonepur and Samastipur divisions and it has acquired the assets and liability of the erstwhile Eastern Railway and North Eastern Railway with regard to those divisions. The catering department supplies foodstuffs to its employees and passengers as passenger amenity service at different stations which includes its catering service at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectly or otherwise, for cash or for deferred payment or for commission, remuneration or for other valuable consideration, whether such sale is or is not in the course of business, it will be deemed to be a dealer for the purpose of the Act and in view of the said Explanation, the East Central Railway is a dealer. He further submitted that under article 285(1), the State Government is debarred from imposing tax on the property of the Union of India or the income. In other words, there is ban on imposition of direct taxes on the property of the Union of India. The said article does not prevent the State from imposing indirect taxes such as tax on sale of goods. Under the Act, the tax is not imposed on the goods but on the sale of goods and as such article 285(1) of the Constitution of India is not a bar to impose tax on the sale of goods. 6.. Learned counsel appearing for the petitioner relied upon the judgment of the Punjab and Haryana High Court in the case of Union of India v. State of Punjab reported in [1974] 34 STC 394 and the judgment of the apex Court in the case of State of Punjab v. Union of India reported in [1990] 79 STC 437, affirming the aforesaid judgment of the Pun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State of Bihar shall be deemed to be a dealer for the purposes of this Act. Explanation II.-A Government which whether or not in the course of business, buys, sells, supplies or distributes goods, directly or otherwise, for cash or for deferred payment or for commission, remuneration or other valuable consideration, shall be deemed to be a dealer for the purposes of this Act." 10.. The "goods " have been defined under section 2(h) and "sale" and "sale price" have been defined under section 2(t), (u) of the Act which run as follows: "2(h) 'goods' means all kinds of movable property, including livestock, and all materials, commodities and articles (as such or in some other form) but excluding electricity, newspapers, actionable claims, stocks, shares or securities; Explanation I.-Materials, commodities and articles attached to or forming part of an immovable property which are agreed to be severed under the contract of sale shall be deemed to be goods within the meaning of this clause. Explanation II.-Materials, commodities and articles sold or supplied as such or in some other form in execution of works contract shall be deemed to be goods within the meaning of this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In Union of India [1974] 34 STC 394 the Punjab and Haryana High Court held that Northern Railway Departmental Catering was not a dealer within the meaning of section 2(d) of the Punjab General Sales Tax Act, 1948 on the ground that it was supplying/ selling foodstuffs at the canteen on no profit no loss basis and as such transaction was not amenable to sales tax. For coming to the aforesaid conclusion it relied upon two decisions of the Supreme Court in the case of State of Tamil Nadu v. Thirumagal Mills Ltd. reported in [1972] 29 STC 290; AIR 1972 SC 1148 and in State of Andhra Pradesh v. H. Abdul Bakshi Bros. reported in [1964] 15 STC 644; AIR 1965 SC 531. It also held that the goods sold at the canteen belong to the Railway and as such in view of the provisions contained in article 285(1) of the Constitution of India sales by the Government are immune from taxation under the State law. The said judgment has been upheld by the Supreme Court in the case of State of Punjab v. Union of India [1980] 79 STC 437. 15.. From the aforesaid judgment it is not clear that definition of "dealer" under the Punjab General Sales Tax Act, 1948 contained a similar provision as contained in E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ragraph 16 of the judgment. "Further it must not be forgotten that articles 285 and 289 are successors of sections 154 and 155 of the Government of India Act, though there are differences in detail between them, in particular clause (2) of article 285, which corresponds to the proviso to section 154 seems in our opinion to make it clear by the change in the language, that clause (1) of article 285 when it speaks of all taxes in referring to taxes on property of which clause (2) definitely permits continuance provided such property of the Union immediately before the commencement of the Constitution was liable or was treated as liable to such tax. As to article 289(1), a change has been made in the words, for section 155(1), which corresponded thereto, provided that the Government of a Province shall not be liable to Federal taxation in respect of lands or buildings. Article 289 on the other hand refers not only to lands and buildings but to all property of a State, whether movable or immovable and exempts it from Union taxation. Even so, we find no warrant for interpreting clause (1) of article 289 as if it exempts all property of a State from all Union taxation. We are therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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