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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 ..... 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 Hon'ble Mr. Justice V. C. Daga (as his Lordship then was) decided an identical controversy. After referring to the constitutional scheme as also the provisions of the Bombay Sales Tax Act, 1959, the court concluded that the Railways cannot argue on the above lines. The very contention has been negatived and in the following words:- "8. The applicant not being satisfied with the aforesaid judgment of the Tribunal chose to prefer reference application raising three questions for being referred to this Court for decision under section 61(1) of the BST Act. Those questions are reproduced hereinbelow for immediate reference: (a) Whether on the facts and in the circumstances of case and on true and correct interpretation of section 2(11), the Tribunal is justified in law in holding that the applicant is a dealer within the meaning of section 2(11) of the Bombay Sales Tax Act, 1959 qua it's activities of catering service, provided to the travelling passengers? (b) Whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 contends that the Tribunal did not adopt this approach while refusing to grant remission in interest. He relied on the observations of the Apex Court in case of Hindustan Steel Ltd. v. State of Orissa, 1970(25) S.T.C. 211 in, support of his contention. He thus contended that remission in interest is also a question of law and the learned Tribunal be directed to refer the same to this Court for being decided in accordance with law on its own merits. 11. Per contra, learned Counsel for the respondents tried to support the order of the Tribunal and contended that in view of the judgment of the Apex Court referred to hereinabove, the issue sought to be raised is no longer open for debate. She, therefore, submits that the order of the Tribunal refusing to make reference to this Court is perfectly legal and valid. The applicant has no case on merits and, therefore, the application deserves to be dismissed with costs. 12. Having heard the parties at length, if one turns to the subsequent amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty 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 India under Article 285 in all force. 14. Judgment in Sea Customs Case [Sea Customs Act (1878), S. 20(2), Re. (1964) 3 SCR 787:AIR 1963 SC 1760 was followed by this Court in the case of New Delhi Municipal Council Vs. State of Punjab & Ors. 1997 (7) SCC 339, wherein this Court by majority judgment at para 148 held: (SSC p. 408) "148. It would be appropriate at this stage to notice the ratio of two judgments of this Court dealing with Article 289. In Sea Customs Act, Re. (1964) 3 SCR 787:AIR 1963 SC 1760 a Special Bench of nine learned Judges, by a majority, laid down the following propositions: (a) clause (1) of Article 289 provides for exemption of property and income of the States only from taxes imposed directly upon them; it has no application to indirect taxes like duties of excise and customs (b) duties of excise and customs are not taxes on property or income; they are taxes on manufacture/production of goods and on import/export of goods, as the case may be, and hence, outside the purview of clause (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les 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 considered by another nine-Judge Bench in the case of New Delhi Municipal Council v. State of Punjab and was affirmed." 16. From the above judgment of this Court, it is clear that Union is not exempted from the levy of indirect tax under Article 285 of the Constitution. The above discussion also shows reliance placed on the judgment of this Court in the case of New Delhi Municipal Council (supra) by one of the learned counsel for the appellants is wholly misconceived and is opposed to his contention with reference to Article 285 of the Constitution." 6. As far as the second contention as well, the Hon'ble Supreme Court of India, referring to its earlier judgments, came to the conclusion that the Central Public Works Department can safely be termed as a dealer. That contention was considered in great details from para 17 onwards and by relying on two Hon'ble Supreme Court judgments delivered in the past, even that was negatived. The relevant paragraphs are reproduced hereinbelow:- "18. This Court had an occasion to deal wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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