Doctrine of Immunity of Instrumentalities
According to Tax Law, the Doctrine of Immunity of Instrumentalities means, the State and Central (Federal) Governments have immunity from paying taxes imposed by the other. The immunity is applicable to the instrumentalities set up by the Governments i.e. Statutory Corporations setup by them.
- The concept of Doctrine of Immunity of Instrumentalities originated in the USA as a judicial interpretation but was not mentioned in the American constitution.
- Article 285 of the Constitution of India exempts the properties of the Union from State taxation.
- Article 286 deals with Restrictions as to imposition of tax on the sale or purchase of goods.
- Article 287 deals with Exemption from taxes on electricity
- Article 288 deals with Exemption from taxation by States in respect of water or electricity in certain cases
- Article 289(1) of the Constitution of India exempts the properties of the State from Union taxation.
- Article 289(2) of the Constitution of India relaxes the Doctrine saying that the Union can tax a State by passing a bill in the Parliament.
- Central Government can impose tax on income or property of State-owned companies or Corporations. Hence Article 289(1) is applicable only on State and not on its instrumentatlities.
Related Cases / Case Law / Case Laws
- State of West Bengal vs Union of India, AIR 1974 SC 1510: Validity of Coal Bearing Areas (Acquisition and Development) Act passed by the Parliament was challenged by the State. The Court held that under the Constitution, the States are not sovereign. Hence the court refused to apply the doctrine beyond the scope of express provisions in Articles 285, 287, 288 and 289.
- Supreme Court, studying the case of Andhra Pradesh Civil Supplies Corporation Ltd vs I T Commissioner, Hyderabad said that instrumentatlities of the State are different from that of the State and are hence taxable.
- Doctrine of Continuity of States
- Doctrine of Pleasure
- Doctrine of Unjust Enrichment
- Doctrine of Alternative Danger
- Doctrine of Immunity of Instrumentalities
- Doctrine of Technical Extension of Territorial Jurisdiction
- Doctrine of Estoppel
- Doctrine of Separation of Powers
- Drago Doctrine
- Hallestein Doctrine
- Monroe Doctrine