Article 12 status does not make a statutory Board a State Government department for fiscal exemption purposes.

A statutory Board may be "State" under Article 12, but that status does not by itself make it a department of the State Government for the purpose of a fiscal exemption notification. The exemption under Notification No. 57/75-C.E. applied only to goods manufactured by a factory belonging to a State Government for the specified public purpose, and the Board did not fall within that description. The exemption claim therefore failed. The impugned demand orders were quashed, however, and the question of liability based on manufacture was remitted for fresh decision.

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Issues: Whether the Board, though a 'State' within Article 12, was a department of the State Government entitled to claim exemption under Notification No. 57/75-C.E. dated 1-3-1975.

Analysis: The exemption notification applied only to goods manufactured by a factory belonging to a State Government for a specified public purpose. The fact that the Board answered the description of 'State' under Article 12 did not make it a department or part of the State Government. A statutory corporation or authority may be 'State' for constitutional purposes without being the Government itself for all purposes.

Conclusion: The Board was not entitled to claim exemption under the notification and this contention failed.

Final Conclusion: The writ petition succeeded only to the extent that the impugned demand orders were quashed and the question of liability based on manufacture was remitted for fresh decision; the exemption claim was rejected.

Ratio Decidendi: An authority may be 'State' under Article 12 of the Constitution of India, yet it is not for that reason alone a department of the Government for the purpose of a fiscal exemption notification unless the notification clearly extends to it.

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