UNION OF INDIA vs PURNA MUNICIPAL COUNCIL AND ORS.

The Supreme Court held that Section 135 of the Indian Railways Act, 1890 is saved under Article 285(1) of the Constitution, which exempts Union property from state taxes unless Parliament provides otherwise. The Court found the Bombay High Court's interpretation erroneous, as it failed to recognize that Section 135 does not allow local authorities to impose taxes on railway administrations without a specific notification from the Central Government. Consequently, the appeal by the Union of India was allowed, overturning the High Court's decision.