Jindal Stainless Ltd. & Anr. v. State of Haryana & Ors.
Background
This judgment answers a question of law; it does not decide the case itself. A nine-judge Constitution Bench was constituted to answer referred questions on the scope of Article 301 of the Constitution, which protects freedom of trade, commerce and intercourse, and on the compensatory tax doctrine, in the context of State entry tax laws. The lead appeal concerned entry tax imposed by Haryana.
Decision Breakdown
This is not a final judgment in the case itself. The majority, in a judgment signed by seven judges with separate opinions by two judges who partly dissented on some questions, overruled the compensatory tax theory from the Automobile Transport decision. It held that incentives and set-offs granted to a specified class of dealers would not violate Article 304(a). Whether the levies in these cases satisfy that test was left to be determined by the regular benches hearing the matters.
Lesson Learnt
There is no final ruling yet on whether the entry tax imposed in this appeal is valid. The principles declared are that a non-discriminatory tax can still violate Article 301 if it impedes free trade, that Article 304(a) and (b) are to be read disjunctively, and that the compensatory tax doctrine is overruled.