Article 288 of Constitution of India "Exemption from taxation by States in respect of water or electricity in certain cases"
(1) Save in so far as the President may by order
otherwise provide, no law of a State in force immediately
before the commencement of this Constitution shall impose,
or authorise the imposition of, a tax in respect of any
water or electricity stored, generated, consumed,
distributed or sold by any authority established by any
existing law or any law made by Parliament for regulating or
developing any inter-State river or river-valley.
Explanation.- The expression "law of a State in force" in
this clause shall include a law of a State passed or made
before the commencement of this Constitution and not
previously repealed, notwithstanding that it or parts of it
may not be then in operation either at all or in particular
areas.
(2) The Legislature of a State may by law impose, or authorise the imposition of, any such tax as is mentioned in clause (1), but no such law shall have any effect unless it has, after having been reserved for the consideration of the President received his assent; and if any such law provides for the fixation of the rates and other incidents of such tax by means of rules or orders to be made under the law by any authority, the law shall provide for the previous consent of the President being obtained to the making of any such rule or order.
Article 289 of Constitution of India "Exemption of property and income of a State from Union taxation"
(1) The property and income of a State shall be exempt
from Union taxation.
(2) Nothing in clause (1) shall prevent the Union from
imposing, or authorising the imposition of, any tax to such
extent, if any, as Parliament may by law provide in respect
of a trade or business of any kind carried on by, or on
behalf of, the Government of a State, or any operations
connected therewith, or any property used or occupied for
the purposes of such trade or business, or any income
accruing or arising in connection therewith.
(3)Nothing in clause (2) shall apply to any trade or
business, or to any class of trade or business, which
Parliament may by law declare to be incidental to the
ordinary functions of government.