Jaiprakash Associates Limited v. State of Madhya Pradesh and Others

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2018 Supreme(Online)(SC) 3407

SUPREME COURT
Dr. A. K. Sikri, Ashok Bhushan, JJ.
Jaiprakash Associates Limited v. State of Madhya Pradesh and Others

Table of Content
1. entry tax framework and compensatory tax theory. (Para 1 , 2 , 3)
2. challenges against entry tax based on compensatory taxation principles. (Para 4 , 5 , 6)
3. tax law compatibility with constitutional provisions. (Para 7 , 8 , 10)
4. referrals to other benches for unresolved issues. (Para 11 , 12 , 13)
5. court decision on interim orders and liberty for petitions. (Para 14 , 15 , 16 , 17)

1. Leave granted in the special leave petitions.

3. The Court, by majority, answered the reference in the following terms:
" 1. Taxes simpliciter are not within the contemplation of Part XIII of the Constitution of India . The word 'Free' used in Art.301 does not mean "free from taxation".
2. Only such taxes as are discriminatory in nature are prohibited by Art.304(a). It follows that levy of a non - discriminatory tax would not constitute an infraction of Art.301.
3. Clauses (a) and (b) of Art.304 have to be read disjunctively.
4. A levy that violates 304(a) cannot be saved even if the procedure under Art.304(b) or the proviso there under is satisfied.
5. The compensatory tax theory evolved in Automobile Transport case and subsequently modified in Jindal's case has no juristic basis