M/S. JINDAL STAINLESS LTD. AND ANR. versus STATE OF HARYANA AND ORS.

Citation: [2006] SUPP. 3 S.C.R. 569 · Decided: 14-07-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT
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Judgment (excerpt)

c 
A 
MIS. JINDAL STAINLESS LTD. AND ANR. 
v. 
STATE OF HARYANA AND ORS. 
JULY 14, 2006 
B 
[ARIJIT PASA Y AT AND S.H. KAPADIA, JJ.] 
Taxation: 
c 
Compensatoty tar-Impugned levy whether compensat0ty in nature-
High Courts examined the issue following two earlier Supreme Court 
judgments--Such judgments subsequently struck down by a Constitution 
Bench of Supreme Court-High Courts therefore directed to decide the issue 
aji-esh in light of the Constitution Bench judgment-Constitution of India, 
1950-Article 301. 
D 
In all the present appeals and connected matters the basic issue revolves 
round the judicially evolved concept of"compensatory tax". 
In a recent decision, a Constitution Bench of this Court in case of Jindal 
Stainless Ltd. while examining the concept of compensatory tax vis-a-vis E 
Article 301 of the Constitution held that the doctrine of"direct and immediate 
effect" of the impugned law on trade and commerce under Article 301 as 
propounded in the case of Atiabari Tea Co. Ltd. and the working test 
enunciated in Automobile Transport 's case for deciding whether a tax is 
compensatory or not will continue to apply and the test of"some connection" F 
indicated in the Bhagatram Rajeevkumar 's case and followed in the case of 
Bihar Chamber of Commerce is not good law. 
Directing placing of the present matters for further hearing, the Court 
HELD: I. I. In all these matters, the concerned High Courts do not 
appear to have examined the issue in the proper perspective, as they were G 
.. 
bound by the judgments in Bhagatram 's case and Bihm· Chambers of 
Commerce's case.1572-GI 
'· 
.. 
569 
H 
570 
SUPREME COURT REPORTS [2006] SUPP. 3 S.C.R. 
A 
1.2. At this juncture, it is necessary to take note of what has been stated 
in the judgment rendered by the Constitution Bench in case of .Jindal Stainless 
ltd. Since relevant data do not appear to have been placed before the High 
Courts, the parties are permitted to place them in the concerned Writ 
Petitions within two months. The concerned High Courts shall deal with the 
B 
basic issue as to whether the impugned levy was compensatory in nature. The 
High Courts are requested to decide the aforesaid issue within five months 
from the date of receipt of this order. The judgment in the respective cases 
shall be placed 011 record by the concerned parties within a month from the 
date of the decision in each case pursuant to direction of this Court. 
1573-A; 575-B-CJ 
c 
.Jindal Stainless Ltd & Anr. v. State of Haryana & Ors., (2006) 4 SCALE 
300, followed. 
Atiabari Tea Co. Lid. v. State of Assam, AIR (1961) SC 232; Aulomobile 
Transport (Rajasthan) Ltd v. State of Rajasthan, AIR (1962) SC 1406; Mis. 
D Bhagalram Raieevkumar v. Commissioner of Sales Tax, M.P. and Ors., 119951 
Suppl. 1 SCC 673 and State of Bihar and Ors. v. Bihar Chambers of Commerce 
and Ors., 119961 9 SCC 136, referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3453 of2002. 
E 
From the Judgment and Order dated 21.12.200 I of the High Court of 
Punjab and Haryana at Chandigarh in C.W.P. No. 6630/2000. 
WITH 
SLP (C) No. 10003/2004, SLP (C) No. 10007/2004, SLP (C) No. 10156/ 
F 2004, SLP (C) No. 10164/2004, SLP (C) No. 10167/2004, SLP (C) No. 10206/ 
2004, SLP (C) No.10381/2004, SLP (C) No.10391/2004, SLP (C) No.10404/2004, 
SLP (C) No. 10417/2004, SLP (C) No. 10501/2004. SLP (C) No. 10563/2004, SLP 
(C) No.10568/2004, SLP (C) No. 10571/2004, SLP (C) No. 11012/2004, SLP (C) 
No. 1127112004, SLP (C) No. 1132612004, T.C. (C) No. 1312004, SLP (C) No.14380/ 
G 
2005, C.A. Nos.2608/2003, 2637/2003, 2769/2000, 3144/2004, 3145/2004, 3146/ 
2004, 331412001, 3381-3400/1998, 3454/2002, 3455/2002, 3456-345912002, 3460/ 
2002, 3461/2002, 3462-3463/2002, 346412002, 3465/2002 3466/2002, 3467/2002, 
.. 
3468/2002, 3469/2002, 34 70/2002, 3 592/1998, 44 7112000, 4476/2000, 465111998, 
... 
4954/2004, Writ Petition No. 512/2003, C.A. Nos. 5141/2004, 5143/2004, 5144/ 
2004, 514512004, 514712004, 5148/2004, 5149/2004, 5150/2004, 515112004, 51521 
H 2004, 5153/2004, 5156/2004, 5157/2004, 5158/2004, 5159/2004, 516012004, 5162/ 
_ .. 
JINDAL STAINLESS LTD. v. ST ATE OF HARY ANA 
571 
c 
2004, 5163/2004, 5164/2004, 5165/2004, 5166/2004, 5167/2004, 5168/2004, 5169/ A 
2004, 5170/2004, Writ Petition (C) No. 574/2003, C.A. Nos. 5740/2002, 5858/ 
2002, 6331/2003, 6383-6421/1997, 6422-6435/1997, 6436/1997, 6437-6440/1997, 
7658/2004, 8241/2003, 8242/2003, 8243/2003, 8244/2003, 8245/2003, 8246/2003, 
8247/2003,
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