The Bombay High Court ruled that, Stalls on Railway Platforms and Catering Services in Trains are liable to pay Sales Tax.
The division bench comprising of Justice S.C Dharmadhikari and Justice Prakash D.Naik observed that, Western Railway shall not come under within the exemption provision. Railway cannot be exempt from sales tax under Article 285 of the Constitution of India.
The Court rejected the contention that the definition of the term “dealer” would not include the Railway or the Union of India and any attempt which is now made by the amendment to include it is beyond the competence of the State legislature.
While relying the precedents, the bench observed that, After referring to the constitutional scheme as also the provisions of the Bombay Sales Tax Act, 1959, the Railways cannot argue on the above lines.
Dismissing the petition, the Court also relied Kayra Palak Engineer, CPWD, Bikaner vs. Rajasthan Taxation Board, Ajmer and Ors, The Central Public Works Department, relying upon the same constitutional provision, contended that the Rajasthan Sales Tax Act would not be applicable insofar as its activities are concerned and that it would not be a dealer within the scheme of that Act. The said contention was negatived by the Supreme Court.
Read the full text of the Order below.
