In Brief
The Supreme Court disposed of multiple consolidated appeals challenging entry tax laws enacted by various States. The core issue centred on whether such entry taxes violated Article 301 of the Constitution (freedom of trade) and whether they constituted permissible "compensatory taxes." A Nine-Judge Bench had previously rejected the compensatory tax doctrine and held that only discriminatory taxes in a protectionist sense violate Article 304(a). The Court allowed assessees to file fresh petitions in High Courts to address three specific issues: whether entire States could be notified as local areas, whether entry tax applies to goods imported from outside India, and whether tax incentives for indigenous manufacturers constitute prohibited discrimination. The interim orders remained effective until 31 May 2017.
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