JINDAL STAINLESS LTD. & ANR versus STATE OF HARYANA & ORS

Citation: [2016] 10 S.C.R. 1 · Decided: 11-11-2016 · Supreme Court of India · Bench: T.S. THAKUR · Disposal: Directions issued

Cited by 11 judgment(s) · cites 4 · see the full citation network in Lexace

Judgment (excerpt)

120161 JO S.C.R. l 
.JINDAL STA!NLESS TTD. & ANR. 
v. 
STATE OF HARYANA & ORS. 
(Civil Appeal No. 3453 of 2002) 
NOVEMBER 11. 2016 
IT. S. THAKUR, C.ll, A. K. SIKRl, S. A. BOBDE, 
SHIVA KIRTI SINGH, N. V. RAMANA, R. BANUMATHI, 
A. M. KIJANWILKAR, DR. D. V. CIIANDRACIJUD AND 
ASllOK BHlJSHAN, .I.I.I 
Constitution of India: 
Arts.301. 304 · Taxes sirnpliciter are not within the 
contemplation o( Part XIII of the Constitution-· Word 'Free' used in 
:ln.301 does not mean "free .fim11 taxation" - Only such taxes as 
al'(' discriminalorr in nature are prohihired ''Y Art.304(a) - hfi>ll01r.1· 
that lny o( a no11-di.1·criminalon· tax would 110! co11stit11fe an 
infi·action of/lrt.301 -·Decisions o/thi.1· Court in Atiabari. Automobile 
Transport and .Jindal case.1· and all otherjudgmenrs that /bl/ow these 
pm11011nce111e11/s are to the extent o{ s1.1ch reliance overruled - Entry 
fox. (Per maiority) 
Art.30-'l{a).(h) - Clm1ses (a) and (h) of Art.301 to he read 
disiw1ctivelv. (Per majoritvj 
Art.304(a). (h) 
/I /ei:r that 1·iolates Art.304(a} cannot he 
sm·ed ei·e11 i( the pmcedure ul·lrt.31N(h) or the pro1·iso thereunder 
is satisfied. (Per majority) 
Cm11pen.1·atorv tax thenrv - Held: Th{' Compensatorv Jax 
theory evolved in Automobile Transport case and suhsequemly 
modified i11 Jinctars case hos no juristic basis and is rejected. (Per 
maf o ri I)') 
A 
B 
c 
D 
E 
F 
ilrr . .l(M - .1 tax 011 entn· ofp,oods into a local area fbr use, 
G 
sale or consumption therein is pennissihle even H'hen similar good' 
are nor produced wi1hi11 the taxing Stale - Art.301/ (a) .fi"mrns upon 
disai111i11ation (of a hostile nature in the protectio12ist sense) and 
not 011 mere differentiation -
Therefore. incentives. set-offs etc . 
. ~ra111ed to a specified class of dealers (or a limited period ·of rime 
1-1 
2 
SUPREME COURT REPORTS 
[2016] 10 S.C.R. 
A 
in a non-hostile fashion with a view to developing economical!)' 
backward areas would not violate ;lrt.304(a) - The question i,·hether 
the levies in the present case indeed satisfl' this test is !efi to he 
determined hv the i·egular benches hearing the matters. (Per 
majoritv) 
B 
llrt.304 - States are well within their right to design their 
fiscal legislations lo ensure that the lax hurden on good1· imported 
.fi·o111 other States and good~ produced within the State fall equallv 
- Such measures if taken would 1101 contravene Art. 304(a) - The 
q11es1irm · H·hether the le Pies in the present case indeed satislr this 
C 
test is left to he deter111ined by the regular benches hearing the 
matters. (Per majoritv) 
Sch. VJJ Dst II Entry 52 - E1111y Tax - 1/1e questions whether 
the entire State can he notified as a local area and whether entrv 
tax can he levied on ,<_?,oods entering the landmass of India fimn 
D 
another countrv left open to he determined in appropriate 
proceeding,.1·. (Per majoritv) 
Sovereignll' - Power to tax - Held: ft is essential attrihute of 
s0Fereig11tv - Exercise o( s01·ereign power is however subject to 
co11stit11tional li111i1atio11 - Poirer to le1y taxes heing a sovereign 
r~ 
pmver controlled 011/p /Jv Constitution, limitation on that poiver must 
/Jc express. (Per T S. Thak111; CJ/for himself and for A.K. Sikri and 
A.M. Khamrilkar. J.1.) 
F 
G 
H 
Arts.245, 246 and 304(a) - State\· power to levy tax - Held: 
Crmstiwtionallr vested pmver to /epy tax can he regulated or 
controlled onlv hv specific Constitutional limitations, if any -
Applving this principle to the case at ha11d, there is 110 specific 
limitation on the State'.\· power to few taxes on the import of goods 
.fi"om other States except the one re/erred to in Art.304(a) - That 
limira1io11 is confined to lev.v of discriminatory taxes within the 
comprehension of Art.304(a) -
So long as taxes are 11011-
discriminarorr and. therefi1re, consistent with Art.304(a}, there is 
no limitation leave alone any express limitation on the States· 
legislative power to levv any tax 011 the import ofgood1ji·o111 another 
State - The pmver to /e1y a tax in terms of Arts.245 and 246 read 
v.oith E11t1T 52 of Us! Ii no/ heing in dispute in the cases at hand, the 
JINDAL STAINLESS LTD. v. STATE Of HARYANA 
3 
ahsence of am• specific limitatio11 forhidding the exercise of' such 
A 
/!ower whether fiJr the sake o(fi-'ee rrade, commerce and i11tercourse 
or othenvise simplr 111ea11s that the Stare legislatures are ,fl-ee to le1~v 
laxes that are non-discriminatorr in nature (Per T S. Thak111; CJl 
j(Jr himself an

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