In Brief
The Supreme Court examined whether sales tax exemptions granted by unified Madhya Pradesh to industrial units with fixed assets above Rs. 100 crores survive after the state's bifurcation into Madhya Pradesh and Chhattisgarh in 2000. The Court held that after bifurcation, transactions between the two states constitute inter-state trade, not intra-state trade. The deeming fiction in Section 78 of the Reorganisation Act ensures continuity of laws but does not erase the constitutional distinction between states or allow intra-state exemptions to apply to inter-state transactions. The Court overruled Swarn Rekha Cokes, allowing the states' appeals and dismissing the assessee's appeals, while permitting assesses to challenge adjudication orders with time exclusions.
The lawyer headnote and full judgment text are available to registered users.