G. C. BHARUKA, J. ( 1 ) THESE revision petitions are directed against the order dated July 7, 1991 in S. T. A. Nos. 663 and 664 of 1991. The petitioner-industry is a partnership-firm engaged in the business of manufacture of steel and wooden furniture. During the assessment period 1987-88 and 1988-89, it had effected sales to Zilla Parishads in Karnataka and Nationalised Banks. It is contended on behalf of the petitioners that in view of the Government Notification No. FD 71 CSL 84, dated march 3, 1986 the rate of tax applicable on such sales was only to the maximum extent of 4 per cent. The said notification reads as under : sl. No. 200 notification no. FD 71 CSL 84, Bangalore, dated 3rd March, 1986 S. O. No. 479, Karnataka Gazette, dated 6th March, 1986. In exercise of the powers conferred by section 8a of the Karnataka Sales Tax Act, 1957 (Karnataka Act 25 of 1957), and in supersession of the Notification No. FD 142 CSL 79, dated 27th December, 1979, the Government of Karnataka, hereby reduces with immediate effect, the rate of tax payable under section 5 of the said Act in respect of sales to departments of government of India or Government of Karnataka or Government of any other State located in karnataka, or Zilla Parishads in Karnataka for use by them, by a dealer, relating to goods produced in his manufacturing unit located in the State of Karnataka to 4 per cent under the karnataka Sales Tax Act, 1957, notwithstanding anything contained in any of the Schedules to the Karnataka Sales Tax Act, 1957 or if the rate of tax prescribed in any of the Schedules to the said Act, is lower than 4 per cent, then it shall be at the prescribed rate. " the words "zilia Parishads in Karnataka" was inserted in the said notification with effect from january 23, 1989 vide Notification No. FD 131 CSL 88, dated January 20, 1989. ( 2 ) THE question that precisely fails for consideration is as to whether the sales effected to the nationalised Banks and to the Zilla Parishads were liable to levy of reduced rate of tax as contemplated in the notification quoted above. ( 2 ) THE question that precisely fails for consideration is as to whether the sales effected to the nationalised Banks and to the Zilla Parishads were liable to levy of reduced rate of tax as contemplated in the notification quoted above. Till the insertion of the expression, "zilia parishads in Karnataka" with effect from January 23, 1989 the reduced rate of tax was available only in respect of sales made to the Government departments, may be of the Central or State, located in the State of Karnataka. Therefore, what really needs to be determined is as to whether the "zilla Parishads" and the "nationalised Banks" to whom the sales have been effected in the present case can be treated as Government departments for the purposes of the said notification. ( 3 ) THE Zilla Parishads are established under section 138 of the Karnataka Zilla Panchayat, Taluk panchayat Samithies, Mandal Panchayat and Nyaya Panchayat Act, 1985. Sub-section (2) of section 138 of the Act reads as under : "every Zilla Parishad shall be a body corporate by the name of. . . . . . . . Zilla Parishad', shall have perpetual succession and a common seal and subject to such restrictions as are imposed by or under this or any other enactment, shall be vested with the capacity of suing or being sued in its corporate name, of acquiring, holding and transferring property movable or immovable, whether without or within the limits of the areas over which it has authority, of entering into contracts and of doing all things, necessary, proper or expedient for the purpose for which it is constituted. " ( 4 ) SIMILARLY, the Nationalised Banks as understood in common parlance, owe their establishment to section 3 of the Banking Companies (Acquisition and Transfer) of Undertaking Act, 1970. Under this Act, banks have been defined under section 2 (d) as corresponding new banks. Sub-section (4) of section 3 of the said Act, reads as under : "every corresponding new bank shall be a body corporate with perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property, and to contract and may sue and be sued in its name. Sub-section (4) of section 3 of the said Act, reads as under : "every corresponding new bank shall be a body corporate with perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property, and to contract and may sue and be sued in its name. " ( 5 ) CONSISTENTLY, the courts have held such statutory bodies having their independent corporate identity as bodies distinct from the Government departments, though, such bodies may withstand the test of being "state" being "other authority" for the purpose of article 12 of the Constitution of India. In the case of Tamlin v. Hannaford [1950] 1 KB 18, Lord Denning has observed that : "when Parliament intends that a new corporation should act on behalf of the Crown, it as a rule, so states in the statute constituting the corporation. In the absence of any such provision, the proper inference in the case, at any rate, of a commercial corporation, is that it acts on its own behalf, even though it is controlled by a Government department. " ( 6 ) SUBSEQUENTLY, the Supreme Court in the case of Ramana Dayaram Shetty v. International airport Authority of India AIR 1979 SC 1628 has held to the following effect : "a corporation may be created in one of two ways. It may be either established by statute or incorporated under a law such as the Companies Act, 1956 or the Societies Registration Act, 1860. Where a corporation is wholly controlled by Government not only in its policy-making but also in carrying out the functions entrusted to it by the law establishing it or by the charter of its incorporation, there can be no doubt that it would be an instrumentality or agency of government. But ordinarily where a corporation is established by statute, it is autonomous in its working, subject only to a provision, often times made, that it shall be bound by any directions that may be issued from time to time by Government in respect of policy matters. So also a corporation incorporated under law is managed by a board of directors or committee of management in accordance with the provisions of the statute under which it is incorporated. When does such a corporation become an instrumentality or, agency of Government ? So also a corporation incorporated under law is managed by a board of directors or committee of management in accordance with the provisions of the statute under which it is incorporated. When does such a corporation become an instrumentality or, agency of Government ? Is the holding of the entire share capital of the corporation by Government enough or is it necessary that in addition, there should be a certain amount of direct control exercised by Government and, if so, what should be the nature of such control ? Should the functions which the corporation is charged to carry out possess any particular characteristic or feature, or is the nature of the functions immaterial ? Now, one thing is clear that if the entire share capital of the corporation is held by Government, it would go a long way towards indicating that the corporation is an instrumentality or agency of Government. But, as is quite often the case, a corporation established by statute may have no shares or shareholders, in which case it would be a relevant factor to consider whether the administration is in the hands of a board of directors appointed by government, though this consideration also may not be determinative, because even where the directors are appointed by Government, they may be completely free from governmental control in the discharge of their functions. What then are the tests to determine whether a corporation established by statute or incorporated under law is an instrumentality or agency of Government ? it is not possible to formulate an all-inclusive or exhaustive test which would adequately answer this question. There is no cut and dried formula which would provide the correct division of corporations into those which are instrumentalities or agencies of Government and those which are not. " ( 7 ) AGAIN in the case of State of Punjab v. Raja Ram AIR1981 SC 1694 , 1981 (1 ) SCALE218 , (1981 )2 SCC66 , [1981 ]2 SCR712 , 1981 (13 )UJ155 (SC ) it has been pointedly held that : "a Government department has to be an organisation which is not only completely controlled and financed by the Government but has also no identity of its own. The money earned by such a department goes to the exchequer of the Government and losses incurred by the department are losses of the Government. The money earned by such a department goes to the exchequer of the Government and losses incurred by the department are losses of the Government. The corporation, on the other hand, is an autonomous body capable of acquiring, holding and disposing of property and having the power to contract. It may also sue or be sued by its own name and the Government does not figure in any litigation to which it is a party. It is true that its original share capital is provided by the Central Government (section 5 of the F. C. Act) and that 11 out of 12 members of its Board of Directors are appointed by that government (section 7 of the F. C. Act) but then these factors may at the most lead to the conclusion (about which we express no final opinion) that the corporation is an agency or instrumentality of the Central Government. " ( 8 ) FROM the above it is more than clear that neither the nationalised banks nor the Zilia Parishads can be treated as a Government department for the purpose of levy of reduced rate of tax under the notification referred to above. But so far as the Zilla Parishads are concerned, with effect from January 23, 1989 sales effected to these Parishads will be subject to reduced rate of tax under the notification. But, the said reduction will not be available on the premise that Zilla parishads are departments of State Government. The reduced rate of tax will be available to sales made to those statutory bodies only because of specific insertion made in this regard in the notification referred to above by treating such Zilla Parishads as having independent identities. From the above discussions it is clear that the Tribunal was right in holding that no benefit of reduced rate of tax could have been granted in respect of sales effected to the nationalised banks. But so far as the sales effected to the Zilla Parishads are concerned, it appears to have fallen in error in not granting such benefit in respect of sales effected to the Zilla Parishads in Karnataka even on or after January 23, 1989, to which in our opinion the petitioner was entitled to. But so far as the sales effected to the Zilla Parishads are concerned, it appears to have fallen in error in not granting such benefit in respect of sales effected to the Zilla Parishads in Karnataka even on or after January 23, 1989, to which in our opinion the petitioner was entitled to. ( 9 ) ACCORDINGLY, the appeal is allowed only to the extent that if the petitioner has effected any sale to Zilla Parishads in Karnataka as envisaged in the notification under consideration on or after january 23, 1989, then such sales will he subject to levy of tax at 4 per cent as provided in the aforesaid notification. No costs. ( 10 ) APPEALS allowed.