Union property taxation barred under Article 285 as pre-Constitution saving provisions could not sustain the municipal levy.

Article 285 exempted Union property from municipal taxation unless Parliament otherwise provided, so the pre-Constitution Railways (Local Authorities Taxation) Act, 1941 could not override that constitutional bar and the levy failed under Article 285(1). Article 285(2) saved only a continuing pre-Constitution tax levied by a local authority within the same State; although a mere change in the quantum would not matter, the reorganisation that placed Bellary in Mysore meant the authority was no longer within the same State. The municipal tax was therefore not protected by Article 285(2), and recovery against Union property could not be sustained.

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Issues: (i) whether the Railways (Local Authorities Taxation) Act, 1941 could be relied on after the Constitution to sustain municipal taxation of Union property notwithstanding Article 285(1) read with Article 372; and (ii) whether the municipal levy could be saved under Article 285(2) when the local authority had ceased to be within the same State after reorganisation.

Issue (i): whether the Railways (Local Authorities Taxation) Act, 1941 could be relied on after the Constitution to sustain municipal taxation of Union property notwithstanding Article 285(1) read with Article 372.

Analysis: Article 285(1) exempts Union property from all taxes imposed by a State or by an authority within a State, save where Parliament otherwise provides. The 1941 Act was an existing law continued by Article 372, but that continuance remained subject to the Constitution. Since Parliament had not enacted any post-Constitution law preserving the levy, and the 1941 Act was repugnant to the constitutional exemption, it could not override Article 285(1).

Conclusion: The 1941 Act did not save the municipal levy from the bar of Article 285(1).

Issue (ii): whether the municipal levy could be saved under Article 285(2) when the local authority had ceased to be within the same State after reorganisation.

Analysis: Article 285(2) protects only a tax that was immediately before the Constitution leviable on the Union property and only when it continues to be levied by an authority within the same State. A mere variation in amount does not destroy identity of the tax, but the expression "that State" is controlling. After Bellary became part of Mysore, the municipal authority was no longer a local authority within the same State as before the Constitution, so the saving clause could not apply.

Conclusion: The levy was not protected by Article 285(2).

Final Conclusion: The Union property was constitutionally exempt from the municipal tax, and the municipal suit for recovery could not be sustained.

Ratio Decidendi: Article 285 protects Union property from State and local taxation except where Parliament otherwise provides, and Article 285(2) applies only to continuation of the same pre-Constitution tax by a local authority within the same State.

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