Hyderabad, Aug. 15 -- A Telangana government-run biodiversity body cannot be taxed by the Centre, the High Court has ruled, quashing an Income Tax (I-T) department order that had frozen its bank accounts.

Justices P Sam Koshy and Narsing Rao Nandikonda set aside the attachment notice issued against the Biodiversity Conservation Society of Telangana (BIOSOT), ruling on August 6 that its income falls squarely within the protection Article 289(1) of the Constitution gives to state government revenue against Union taxation.

The bench went a step further than simply reading down the notice. It clarified that this protection is not a tax break Parliament could choose to withdraw, but a constitutional guarantee that kicks in automatically once...