Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(SC) 539

J. K. MAHESHWARI, ATUL S. CHANDURKAR
State of Uttar Pradesh – Appellant
Versus
Reliance Industries Limited – Respondent

Advocates appeared:
For the Appellant(s) : Mr. Dinesh Dwivedi, Sr. Adv. Mr. Bhakti Vardhan Singh, AOR Mr. Vikas Singh Jangra, Adv. Mr. Nishant Singh, Adv. Mr. Narendra Pandey, Adv. Mr. Sauvik Singh, Adv. Mr. J Tarun Kumar, Adv. Mr. Ankit Khatri, Adv.
For the Respondent(s): Dr. Abhishek Manu Singhvi, Sr. Adv. Mr. K.R. Sasiprabhu, AOR Mr. Shubhranshu Padhi, Adv. Mr. Ashwin M. Dave, Adv. Mr. Ketan Dave, Adv. Mr. Rishit Badiani, Adv. Mr. Avishkar Singhvi, Adv. Mr. Vishnu Sharma A.S., Adv. Mr. Nidhiram Sharma, Adv. Mr. Pranav Giri, Adv. Mr. Yashrath Misra, adv. Mr. tushar Bhardwaj, Adv. Mr. Naveen Kumar, AOR Ms. Nidhi Mohan Parashar, AOR Mr. Shailendra Swarup, AOR Mr. Kavin Gulati, Sr. Adv. Ms. Ruby Singh Ahuja, Adv. Ms. Ravneet Kaur Malik, Adv. Mr. Devang Kumar, Adv. Mr. Abhyuday Mishra, Adv. M/S. Karanjawala & Co., AOR Dr. N. Visakamurthy, AOR Ms. Devina Sehgal, AOR Mr. Sahil Bhalaik, AOR

Judgement Key Points

Key Points:
The judgment holds that a contract of sale that occasions movement of goods from one state to another constitutes an inter-state sale under CST, with situs fixed at delivery point irrespective of co-mingling or processing (!) (!) (!) (!) .
It declares origin state (Uttar Pradesh) as the competent authority to levy CST/VAT on inter-state gas sale, and quashes intra-state taxation (!) (!) (!) (!) (!) .
It analyzes the clarificatory nature of Explanation 3 to Section 3 of CST Act, holding it clarifies preexisting law and is retrospective unless expressly stated otherwise; it applies to the discussed transactions, not creating new rights (!) (!) (!) (!) .

What is inter-state sale under CST Act and how does movement of goods affect situs?

What is the competent taxing authority for inter-state gas transactions under CST Act and VAT Act?

What is the effect of Explanation 3 to Section 3 of CST Act (2016) on the retroactive application to pre-2016 transactions?

Table of Content
1. federal structure and free inter-state trade under constitution (Para 1 , 2 , 3)
2. facts of nelp, psc, gspa, gta and assessment history (Para 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20)
3. state argues sale ascertained only in uttar pradesh as intra-state (Para 21)
4. respondent argues transaction is inter-state sale under cst section 3 (Para 22 , 23)
5. constitutional division of taxing powers and federalism limits (Para 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57)
6. cst act sections 3 and 4 interplay; explanation 3 is clarificatory (Para 58 , 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67 , 68 , 69 , 70 , 71 , 72 , 73 , 74 , 75 , 76)
7. transaction is inter-state sale; state of up lacks vat jurisdiction (Para 77 , 78 , 79 , 80 , 81 , 82 , 83 , 84 , 85 , 86 , 87 , 88 , 89 , 90)

JUDGMENT :

J.K. MAHESHWARI, J.

CIVIL APPEAL NO. 3910 OF 2016

1. India is a Union of States. Reality is that all States are not endowed equally. There is stark disparity in the economic scenario among various States in India. Each State has its

Click Here to Read the rest of this document

2026 Supreme(SC) 539

J. K. MAHESHWARI, ATUL S. CHANDURKARState of Uttar Pradesh – AppellantVersusReliance Industries Limited – Respondent

What is inter-state sale under CST Act and how does movement of goods affect situs?

What is the competent taxing authority for inter-state gas transactions under CST Act and VAT Act?

What is the effect of Explanation 3 to Section 3 of CST Act (2016) on the retroactive application to pre-2016 transactions?

Cases Referred (17)

Related Judgments

State of Uttar Pradesh VS Reliance Industries Limited - 2026 Supreme(SC) 539

RELIANCE INDUSTRIES LIMITED VS STATE OF U. P. - 2012 Supreme(All) 2338

Vellanki Frame Works VS Commercial Tax Officer, Visakhapatnam - 2021 Supreme(SC) 261

Dharmendra M. Jani VS Union Of India - 2021 Supreme(Bom) 1104

Union of India VS Mohit Minerals Pvt. Ltd. Through Director - 2022 Supreme(SC) 479

Bharat Trading Corporation vs State of Assam, Represented by the Commissioner & Secretary to the Government of Assam, Department of Finance & Taxation - 2025 Supreme(Gau) 978

Mulji Ratanshi and Co. v. State of Kerala And Another - 1961 Supreme(Online)(Ker) 3

Kay Pan Fragrances (P) Ltd. VS Union of India - 2022 Supreme(All) 803

TAMILNADU TELECOMMUNICATIONS vs THE COMMERCIAL TAX OFFICER - 2025 Supreme(Online)(Mad) 74236

M/S TRIBAL COOP MARKTG.DEV.FED. INDIA.LT vs COMM. OF COMMERCIAL TAXES HYDERABAD - 2025 Supreme(Online)(Tel) 53389

J. K. MAHESHWARI, ATUL S. CHANDURKAR
State of Uttar Pradesh – Appellant
Versus
Reliance Industries Limited – Respondent