Article 285 of the Costitution of India with Case law
Article 285 of the Constitution of India
Title: Exemption of property of the Union from State taxation
Text of Article 285:
(1) The property of the Union shall, save insofar 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.
Purpose and Explanation:
This Article protects the Union Government’s property from being taxed by State Governments or local authorities.
This immunity is not absolute — Parliament has the power to legislate otherwise and allow such taxation.
Clause (2) is transitional — it allows the continuation of pre-Constitution taxes by State/local authorities on Union property until Parliament decides otherwise.
Key Elements:
| Clause | Provision | Key Point |
|---|---|---|
| (1) | Exemption of Union property from State taxes | Default rule of tax immunity |
| (2) | Temporary continuation of pre-Constitution local taxes | Subject to Parliament’s override |
Case Laws Interpreting Article 285:
⚖ Union of India v. State of Punjab
AIR 1961 SC 1526
Facts: Punjab imposed local municipal tax on Union property (railway properties).
Held: Such tax is unconstitutional under Article 285(1) unless Parliament authorizes it.
Significance: Reaffirmed the immunity of Union property from State or municipal taxation.
⚖ Municipal Commissioner of Dum Dum Municipality v. Indian Tourism Development Corporation
AIR 1995 Cal 395
Facts: Municipality tried to impose property tax on Hotel Ashok, owned by ITDC (a PSU).
Held: Property owned by Union or Union-controlled bodies is protected under Article 285.
Note: Courts will examine whether the PSU is acting as an agent of the Union or independently.
⚖ New Delhi Municipal Committee v. State of Punjab
(1997) 7 SCC 339
Issue: Whether State-owned properties in Union Territory can be taxed.
Held: Article 289 (State immunity) did not apply to Union Territories; Article 285 is distinct.
Relevance: Helped distinguish between Article 285 (Union immunity) and Article 289 (State immunity).
⚖ Union of India v. City Municipal Council, Gadag Betgeri
AIR 1976 SC 999
Municipal authority tried to levy tax on a Central Government building.
Court invalidated the tax, reaffirming blanket immunity unless a Parliamentary law permits it.
Parliamentary Override (if any):
Parliament can make laws that permit taxation of Union property by States or local bodies (e.g., service charges, cess).
Example: Some municipal service charges (like water, sanitation) have been permitted by Parliament under separate laws or government orders.
Conclusion:
Article 285 establishes the constitutional immunity of Union Government property from State and local taxation, reinforcing the federal supremacy of the Union. However, this immunity is not absolute—Parliament can allow such taxation by law.
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