LexUNION OF'. INDIA versus PURNA MUNICIPAL COUNCIL AND ORS.
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uNION Of'. INDIA A· v. PURNA MUNICIPAL COUNCIL AND ORS. SEPTEMBER 19, 1991 (MADAN MOHAN PUNCHHI° AND K. RAMASWAMY, JJ.] · . B Indian Railways Act, 189()-Section 135 read .with ATticle 285 of the , . Constitution of India, 195~unicipal Council claiming tax by way of "Se,.. ~---- vice chmgcs" -Leiality of. · The Unien ~f India: the appellant, approached the High Court under , C . · Article 226.of the Constitution, challenging·notices of demand issued by the Munidpal Council, respondent No.1, claiming tax to the tune of. RS.28,400 by way of "Service c_barges" ·due for the period 1954 to 1960, under Article 285 of the Constitution read with Section 135 of the Indian ·Railways Act, 1890. , · · The High Court dismissed the writ petition·. negativing the claim, . """\ · against which, thi~ appea_I by special leave was filed. Allowing the appeal, this Court, . D HELD 1. Section 135 of ~he Indian Railways· Act, 1890 gets saved · E under Article 285~1) of the Constitution· itself. The said Article proVides t"-"at property of the Union shall,. save in s~ far as· Parliament may by law otherwise provide, be exempt from alttaxes impoSed by the State or by.any . authorlty within a State. (185 A·B] ' . . F • 2. Section 13"5 of the Railways Act permits taxation of Railways by , the 19C&I ·autllority in ~e manner gjven therein; the C~ntral Govemmen1 being the controlling and the regulating autbol,'ity per.milting liability at-a . gjven po~nt of time, its extent and manner. 1'h:e Indian Railways Act being a central.enactment has no role to play in sub-Article (2) of.Article 285, for · that is a sphere in Which th_e State legjslation opera~. [186 ~-BJ . G 3. The reasoning of the High Court to oust the appllcabUity of ~on iJS of the. Indian· Railnys Act on ihe test of sub-Article (2). of Article 285 was totally misplaced, as also in not venturing to create room · for'. it in sub-Artide (1) of ~cle 285. The interplay of th~ constitutional 183 · · H 184 SUPREME COURT REPORTS (1991) SUPP. 1 S. C.R. A and legal provisions being well cut and well defined required no marked elaboration to stress the point. [186 8-C] ')-- B CIVIL APPELIATE JURISDICTION: Civil Appeal No.903of1978. From the Judgment and Order dated 5/6-12-1977 of the Bombay High Court in Special Civil Application No.1937 of 1971. V.C. Mahajan, B.K. Prasad, Smt. Sangeeta Aggarwal and C.V. Subba Rao (NP) for the Appellant. K.R. Chowdhary for the Respondent. The following Order of the Court was delivered C This appeal by special leave is directed against the judgment and order of the Bombay High Court passed in Special Civil Application No. 1937 of 1971 decided on December 5, 1977. The Union of India, the appellant herein, itpproached the High Court under Article 226 of the Constitution challenging notices·of demand issued by the Municipal Council, Puma, respondent No. 1 herein, claiming D tax to the tune of Rs. 28,400/- by way of "Service charges" due for the E F period 1954 to 1960. The claim of the Union of India primarily was based 'r- under Article 285 of the Constitution read with Section 135 of the Indian Railways Act, 1890. The High Court interplaying the two provisions nega- tived the claim of the appellant by holding as follows: · "In terms of Article 285(2) these properties will continue to be liable to such taxes 'until Parliament by law ctherwise provides. Mr. Govilkar has not drawn our attention to any specific law made by the Parliament providing other.wise. He, however, relied on section 135 of the Indian Railways Act, but, as indi- cated earlier, provisions of section 135 cannot have any over- riding· effect against the continuance of such laws when authorised by Article 285 (2) of the Constitution. It is not possible for us to hold that Railways Act is an Act made by the Parliament as contemplated under sub-Article (2) of Ar- ticle 285 of the Constitution" The High Court further observed that: G "As. Section 135 · of the Railways Act is now substituted by the corres1:xmding provisions of the above enactment, it is unneces- sary to consider the contention of Mr. Govilkar as to effect of the absence of any Notification. We have already indicated how sec- tion 135 or the corresponding section of the new enactment can have no overriding effect as against the . saving of laws con- H templated under Article 285 (2) of the Constitution.'' U.0.1 v. PURNA MUNICIPAL COUNCIL 185 The
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