Municipal corporation staff are not Government servants for tax exemption purposes absent express statutory extension.

A municipal corporation remains a separate body corporate and local authority distinct from the State Government, even though it may fall within the wider meaning of "State" for Article 12 and be subject to governmental supervision. Its staff cannot be treated as Government servants for an exemption under a notification issued under section 17 of the Tamil Nadu General Sales Tax Act, 1959, unless the relevant statute or notification expressly extends that status for the specific purpose. Regulatory control, administrative oversight, or selective treatment in other provisions does not by itself convert corporation employees into Government servants generally.

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Issues: Whether the staff of the Madras Corporation could be treated as Government servants for the purpose of claiming exemption under the notification issued under section 17 of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The exemption notification applied to canteens run by a managing committee or co-operative society of State or Central Government servants on a no-profit no-loss basis. The Court held that a municipal corporation, though falling within the inclusive meaning of "State" for the limited purpose of Article 12, does not thereby become the State Government for all purposes. The Corporation is a separate body corporate and local authority with its own statutory constitution, administration, budget and elected organs. The fact that the Government exercises some control over the Corporation, or that certain provisions or circulars treat Corporation staff as Government servants for specific purposes, does not convert them into Government servants generally. The Court relied on the distinction between regulatory control and pervasive domination, and on the principle that municipal bodies retain a separate legal identity distinct from the State Government.

Conclusion: The staff of the Madras Corporation are not Government servants for the purpose of the exemption notification, and the assessee was not entitled to claim the benefit of the exemption.

Ratio Decidendi: A local authority or municipal corporation remains a separate corporate entity, and its employees cannot be treated as Government servants merely because the State exercises supervisory or regulatory control over it, unless the governing statute expressly so provides for the relevant purpose.

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