UNION OF INDIA vs CITY MUNICIPAL COUNCIL, BELLARY

The Supreme Court held that under Article 285(1) of the Constitution of India, railway property owned by the Union is exempt from all local taxes imposed by municipal authorities. The Court clarified that the levy of tax by the Bellary Municipal Council on railway property was not permissible as there was no law passed by Parliament that allowed such taxation, and the Railways (Local Authorities Taxation) Act, 1941 did not create a liability for the Union to pay municipal taxes. The appeal by the Union was allowed, affirming the exemption of railway property from local taxation.