President's Reference-Custom duties and duties of excise-Parliament's power to levy such duties on the property of States- Direct and indirect taxes-Distinction, if valid under Constitution-Customs duties and duties of excise, if taxes on property-"Taxation", Definition-Sea Customs Act, 1878 (8 of 1878), s 20-Central Excises and Salt Act, 1944 (1 of 1944), s. 3 (1)-Government of India Act, 1935 (25 & 26 Geo. 5, Ch. 42), ss. 154, 155-Constitution of India, Arts. 245, 246, 285, 289, 366 (28).

As a result of a proposal to introduce in Parliament a Bill to amend s. 20 of the Sea Customs Act, 1878, and s. 3 of the Central Excises and Salt Act, 1944, with a view to applying the provisions of the said two Acts to goods belonging to the State Governments, in regard to which certain doubts arose as to whether the provisions of the Bill were inconsistent with Art. 289 of the Constitution of India, the President of India referred under Art. 143 of the Constitution certain questions for the opinion of the Supreme Court to ascertain if the proposed amendments would be constitutional. The question was whether the provisions of Art. 289 of the Constitution precluded the Union from imposing, or authorising the imposition of (a) customs duties on the import or export, or (b) excise duties on the production or manufacture in India, of the property of a State used for purposes other than those specified In cl. (2) of that Article.