TaxTMI 
TaxTMI 
1997 (6) TMI 351
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....It is contended on behalf of the petitioners that in view of the Government Notification No. FD 71 CSL 84, dated March 3, 1986 the rate of tax applicable on such sales was only to the maximum extent of 4 per cent. The said notification reads as under: Sl. No. 200 NOTIFICATION No. FD 71 CSL 84, Bangalore, dated 3rd March, 1986 S.O. No. 479, Karnataka Gazette, dated 6th March, 1986. In exercise of the powers conferred by section 8A of the Karnataka Sales Tax Act, 1957 (Karnataka Act 25 of 1957), and in supersession of the Notification No. FD 142 CSL 79, dated 27th December, 1979, the Government of Karnataka, hereby reduces with immediate effect, the rate of tax payable under section 5 of the said Act in respect of sales to departments o....
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.... 3.. The Zilla Parishads are established under section 138 of the Karnataka Zilla Panchayat, Taluk Panchayat Samithies, Mandal Panchayat and Nyaya Panchayat Act, 1985. Sub-section (2) of section 138 of the Act reads as under: "Every Zilla Parishad shall be a body corporate by the name of '........Zilla Parishad', shall have perpetual succession and a common seal and subject to such restrictions as are imposed by or under this or any other enactment, shall be vested with the capacity of suing or being sued in its corporate name, of acquiring, holding and transferring property movable or immovable, whether without or within the limits of the areas over which it has authority, of entering into contracts and of doing all things, necessary, ....
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....nal Airport Authority of India AIR 1979 SC 1628 has held to the following effect "A corporation may be created in one of two ways. It may be either established by statute or incorporated under a law such as the Companies Act, 1956 or the Societies Registration Act, 1860. Where a corporation is wholly controlled by Government not only in its policy-making but also in carrying out the functions entrusted to it by the law establishing it or by the charter of its incorporation, there can be no doubt that it would be an instrumentality or agency of Government. But ordinarily where a corporation is established by statute, it is autonomous in its working, subject only to a provision, often times made, that it shall be bound by any directions that ....
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.... by statute or incorporated under law is an instrumentality or agency of Government? It is not possible to formulate an all-inclusive or exhaustive test which would adequately answer this question. There is no cut and dried formula which would provide the correct division of Corporations into those which are instrumentalities or agencies of Government and those which are not." 7.. Again in the case of State of Punjab v. Raja Ram AIR 1981 SC 1694 at paragraph 5 it has been pointedly held that: "A Government department has to be an organisation which is not only completely controlled and financed by the Government but has also no identity of its own. The money earned by such a department goes to the exchequer of the Government and losse....