2016 (4) TMI 785

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....ent year 1986-1987 to 2000-2001 as common issue is involved in all these matters. 2. The facts are not in dispute. The petitioner in discharge of its functions, sells confiscated goods which have been imported in contravention of the Custom laws. Such goods are disposed of by the Customs Department by public auction or through the N.C.C.F/ or other co-operative agencies. Usually, the confiscated goods are sold by public auction, giving advertisement in newspapers. Thereafter, the interested persons participate in tender process and highest bidder of confiscated goods are required to deposit the bid money along with sales tax in concerned treasury and on production of treasury receipt, the goods are released by the Assistant Commissioner ....

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....cle 285 of the Constitution of India. 6. Article 285 of the Constitution of India read as under:- "Exemption of property of the Union from State taxation-(1) The property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State (2) Nothing in clause (1) shall, until Parliament by law otherwise provides, prevent any authority within a State from levying any tax on any property of the Union to which such property was immediately before the commencement of this Constitution liable or treated as liable, so long as that tax continues to be levied in that State." 7. The Article 285 of the Constitution of India bars the State to levy ta....

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.... and another v. State of W.B. and another, (1999) 1 Supreme Court Cases 192 examined the identical issue as raised in the present cases where the Collector of Customs was found to be a "dealer" within the meaning of the Bengal Finance (Sales Tax) Act, 1941 after the customs sold goods confiscated under the provisions of the Customs Act, 1962 because of non-payment of custom duty thereon. The Court held to the following effect: "4. It would appear that no real arguments were advanced before this Court by the appellant-State and the judgment of this Court in Sea Customs Act (1878), S. 20(2), AIR 1963 SC 1760 was not pointed out. In the Sea Customs Act case a nine-Judge Bench of this Court opined by a majority, that Article 285 envisaged im....

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....far back as in the year 1963 in a presidential reference case under Sea Clustoms Act held; "The bar of Article 289 of the Constitution of India does not apply to indirect tax like Customs duty, Central Excise duty, Sales Tax etc." 13. In the said case it was held that exemption of property from tax contemplated in Article 289 was confined to direct tax on property and not to the levy of indirect taxes. The ratio of the said judgment though delivered in context of Article 289, applies to the exemption in favour of the Union of India under Article 285 in all force. 14. Judgment in Sea Customs Case (supra) was followed by this Court in the case of New Delhi Municipal Council Vs. State of Punjab & Ors. 1997 (7) SCC 339, wherein this Co....