- (1.) This petition has been filed by the petitioner, which is a corporation established by the Union of India and was incorporated on 17th day of September, 1987. The petitioner produces electricity through atomic energy. The issue raised in the instant writ petition is about levy of tax, penalty and interest on vehicles owned by the petitioner under the Rajasthan Motor Vehicles Taxation Rules, 1951 for the reason that the levy under Clause (b) of Rule 28 of the Rules, 1951 is unconstitutional and the State Government has no authority to impose tax on commercial enterprises which are established & funded by the Central Government.
(2.) It is claimed that Article 285 of the Constitution does not create two separate categories regarding the property of the Union and are exempted from levying tax on property of the Union even if involved in commercial activities and Rule 28 is directly hit by Article 285 of the Constitution and is unconstitutional.
(3.) It is further claimed that similar issue was raised in the year 1970 about payment of road tax and other similar taxes on the motor vehicles of Rajasthan Atomic Power Station and the Assistant Secretary to the Government of Rajasthan, Department of Home, in consultation with the Law Department, opined that no tax on the motor vehicles under the Rules, 1951 can be imposed and the contents of the letter in short dt. 11/12/1972 mentioned that since Atomic Power Project is the Department of the Central Government and the vehicles owned and possessed by Atomic Power Project, being property of the Union, tax is not required to be levied. It was further expressed that Article 285(1) read with Rule 28(b) of the Rules, 1951 provided total exemption from liability to tax in case of motor vehicles that are owned & exclusively used by or on behalf of any department of the Central Government and since the motor vehicles owned are exclusively used by the Atomic Power Project department of the Central Government for carrying its employees to and from Atomic Power Project and are not used in connection with commercial enterprises, exempts such motor vehicles from liability to tax. It is contended that intention was that no tax is levied on such an enterprise.;