In Brief
Jaiprakash Associates and numerous other companies challenged entry tax levied by Madhya Pradesh and other states on goods entering local areas, claiming it violated Articles 301 and 304 of the Constitution. The Supreme Court, following a Nine-Judge Bench decision in Jindal Stainless, held that the compensatory tax theory (the primary basis of the High Court judgments) has no legal merit and is overruled. The Court clarified that non-discriminatory entry taxes are constitutionally valid. However, finding inadequate factual foundations in the High Court judgments to decide other constitutional issues (such as whether an entire state can be a 'local area'), the Court remitted the matters to the High Courts for fresh consideration with proper factual records.">
The lawyer headnote and full judgment text are available to registered users.