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Judgment

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3453/2002

JINDAL STAINLESS LTD.& ANR. …Appellants VS.

STATE OF HARYANA & ORS. …Respondents WITH

C.A. NO. 6383-6421/1997, C.A. NO. 6422-6435/1997, C.A. NO. 6436/1997, C.A. NO. 6437-6440/1997 , C.A. NO. 3381-3400/1998, C.A. NO. 4651/1998, C.A. NO. 918/1999, C.A. NO. 2769/2000, C.A. NO. 4471/2000, C.A. NO. 3314/2001, C.A. NO. 3454/2002, C.A. NO. 3455/2002, C.A. NO. 3456-3459/2002, C.A. NO. 3460/2002, C.A. NO. 3461/2002, C.A. NO. 3462-3463/2002, C.A. NO. 3464/2002, C.A. NO. 3465/2002, C.A. NO. 3466/2002, C.A. NO. 3467/2002, C.A. NO. 3468/2002, C.A. NO. 3469/2002, C.A. NO. 3470/2002, C.A. NO. 3471/2002, C.A. NO. 4008/2002, C.A. NO. 5385/2002, C.A. NO. 5740/2002, C.A. NO. 5858/2002, W.P.(C) NO. 512/2003, W.P.(C) NO. 574/2003, C.A. NO. 2608/2003, C.A. NO. 2633/2003, C.A. NO. 2637/2003, C.A. NO. 2638/2003, C.A. NO. 3720-3722/2003, C.A. NO. 6331/2003, C.A. NO. 8241/2003, C.A. NO. 8242/2003, C.A. NO. 8243/2003, C.A. NO. 8244/2003, C.A. NO. 8245/2003, C.A. NO. 8246/2003, C.A. NO. 8247/2003, C.A. NO. 8248/2003, C.A. NO. 8249/2003, C.A. NO. 8250/2003, C.A. NO. 8251/2003, C.A. NO. 8252/2003, T.C.(C) NO. 13/2004, W.P.(C) NO. 66/2004, W.P.(C) NO. 221/2004, C.A. NO. 997-998/2004, C.A. NO. 3144/2004, C.A. NO. 3145/2004, C.A. NO. 3146/2004, C.A. NO. 4953/2004, C.A. NO. 4954/2004, C.A. NO. 5139/2004, C.A. NO. 5141/2004, C.A. NO. 5142/2004, C.A. NO. 5143/2004, C.A. NO. 5144/2004, C.A. NO. 5145/2004, C.A. NO. 5147/2004, C.A. NO. 5148/2004, C.A. NO. 5149/2004, C.A. NO. 5150/2004, C.A. NO. 5151/2004, C.A. NO. 5152/2004, C.A. NO. 5153/2004, C.A. NO. 5154/2004, C.A. NO. 5155/2004, C.A. NO. 5156/2004, C.A. NO. 5157/2004, C.A. NO. 5158/2004, C.A. NO. 5159/2004, C.A. NO. 5160/2004, C.A. NO. 5162/2004, C.A. NO. 5163/2004, C.A. NO. 5164/2004, C.A. NO. 5165/2004, C.A. NO. 5166/2004, C.A. NO. 5167/2004,

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C.A. NO. 5168/2004, C.A. NO. 5169/2004, C.A. NO. 5170/2004, C.A. NO. 7658/2004, SLP(C) NO. 9479/2004, SLP(C) NO. 9496/2004, SLP(C). 9569/2004, SLP(C) NO. 9832/2004, SLP(C) NO. 9883/2004, SLP(C) NO. 9885/2004, SLP(C) NO. 9891/2004, SLP(C) NO. 9893/2004, SLP(C) NO. 9898/2004, SLP(C) NO. 9899/2004, SLP(C) NO. 9901/2004, SLP(C) NO. 9904/2004, SLP(C) NO. 9910/2004, SLP(C) NO. 9911/2004, SLP(C) NO. 9912/2004, SLP(C) NO. 9950/2004, SLP(C) NO. 9964/2004, SLP(C) NO. 9976/2004, SLP(C) NO. 9989/2004, SLP(C) NO. 9991/2004, SLP(C) NO. 9993/2004, SLP(C) NO. 9998/2004, SLP(C) NO. 9999/2004, SLP(C) NO. 10003/2004, SLP(C) NO. 10007/2004, SLP(C) NO. 10129/2004, SLP(C) NO. 10133/2004, SLP(C) NO. 10134/2004, SLP(C) NO. 10153/2004, SLP(C) NO. 10154/2004, SLP(C) NO. 10156/2004, SLP(C) NO. 10161/2004, SLP(C) NO. 10164/2004, SLP(C) NO. 10167/2004, SLP(C) NO. 10206/2004, SLP(C) NO. 10207/2004, SLP(C) NO. 10232/2004, SLP(C) NO. 10366/2004, SLP(C) NO. 10381/2004, SLP(C) NO. 10382/2004, SLP(C) NO. 10384/2004, SLP(C) NO. 10385/2004, SLP(C) NO. 10391/2004, SLP(C) NO. 10402/2004, SLP(C) NO. 10403/2004, SLP(C) NO. 10404/2004, SLP(C) NO. 10407/2004, SLP(C) NO. 10417/2004, SLP(C) NO. 10449/2004, SLP(C) NO. 10493/2004, SLP(C) NO. 10495/2004, SLP(C) NO. 10497/2004, SLP(C) NO. 10501/2004, SLP(C) NO. 10505/2004, SLP(C) NO. 10539/2004, SLP(C) NO. 10557/2004, SLP(C) NO. 10563/2004, SLP(C) NO. 10566/2004, SLP(C) NO. 10567/2004, SLP(C) NO. 10568/2004, SLP(C) NO. 10569/2004, SLP(C) NO. 10571/2004, SLP(C) NO. 10704/2004, SLP(C) NO. 10706/2004, SLP(C) NO. 10708/2004, SLP(C) NO. 10736/2004, SLP(C) NO. 10906/2004, SLP(C) NO. 10907/2004, SLP(C) NO. 10908/2004, SLP(C) NO. 10909/2004, SLP(C) NO. 10910/2004, SLP(C) NO. 10923/2004, SLP(C) NO. 10929/2004, SLP(C) NO. 10977/2004, SLP(C) NO. 11012/2004, SLP(C) NO. 11266/2004, SLP(C) NO. 11271/2004, SLP(C) NO. 11274/2004, SLP(C) NO. 11281/2004, SLP(C) NO. 11320/2004, SLP(C) NO. 11326/2004, SLP(C) NO. 11328/2004, SLP(C) NO. 11329/2004, SLP(C) NO. 11370/2004, SLP(C) NO. 14380/2005, SLP(C) NO. 1101/2007, SLP(C) NO. 1288/2007, SLP(C) NO. 6914/2007, SLP(C) NO. 9054/2007, SLP(C) NO. 10694/2007, SLP(C) NO. 12959/2007, SLP(C) NO. 13806/2007, SLP(C) NO. 14070/2007, SLP(C) NO. 14819/2007, SLP(C) NO. 14820/2007, SLP(C) NO. 14821/2007, SLP(C) NO. 14823/2007, SLP(C) NO. 14824/2007, SLP(C) NO. 14826/2007, SLP(C) NO. 14828/2007, SLP(C) NO. 14829/2007, SLP(C) NO. 14830/2007, SLP(C) NO. 14832/2007, SLP(C) NO. 14833/2007, SLP(C) NO. 14835/2007, SLP(C) NO. 14837/2007, SLP(C) NO. 14838/2007, SLP(C) NO. 14839/2007, SLP(C) NO. 14841/2007, SLP(C) NO. 14842/2007, SLP(C) NO. 14845/2007, SLP(C) NO. 14846/2007, SLP(C) NO. 14847/2007, SLP(C) NO. 15082-15085/2007, SLP(C) NO. 15807/2007, SLP(C) NO. 16351/2007, SLP(C) NO. 17589/2007, SLP(C) NO. 17590/2007, SLP(C) NO. 17905/2007, SLP(C) NO. 17906/2007, SLP(C) NO. 17907/2007, SLP(C) NO. 17908/2007, SLP(C) NO. 17909/2007, SLP(C) NO. 17910/2007, SLP(C) NO. 17911/2007, SLP(C) NO. 17913/2007, SLP(C) NO.

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17914/2007, SLP(C) NO. 17915/2007, SLP(C) NO. 17916/2007, SLP(C) NO. 17917/2007, SLP(C) NO. 17918/2007, SLP(C) NO. 17919/2007, SLP(C) NO. 17920/2007, SLP(C) NO. 17921/2007, SLP(C) NO. 17922/2007, SLP(C) NO. 17923/2007, SLP(C) NO. 17924/2007, SLP(C) NO. 17925/2007, SLP(C) NO. 17926/2007, SLP(C) NO. 17929/2007, SLP(C) NO. 17930/2007, SLP(C) NO. 17933/2007, SLP(C) NO. 17934/2007, SLP(C) NO. 17936/2007, SLP(C) NO. 17937/2007, SLP(C) NO. 17938/2007, SLP(C) NO. 17939/2007, SLP(C) NO. 17941/2007, SLP(C) NO. 17942/2007, SLP(C) NO. 17943/2007, SLP(C) NO. 17944/2007, SLP(C) NO. 17957/2007, SLP(C) NO. 17959/2007, SLP(C) NO. 17960/2007, SLP(C) NO. 17961/2007, SLP(C) NO. 17962/2007, SLP(C) NO. 17963/2007, SLP(C) NO. 17964/2007, SLP(C) NO. 17965/2007, SLP(C) NO. 17972/2007, SLP(C) NO. 17973/2007, SLP(C) NO. 17974/2007, SLP(C) NO. 17975/2007, SLP(C) NO. 17976/2007, SLP(C) NO. 17977/2007, SLP(C) NO. 17978/2007, SLP(C) NO. 17979/2007, SLP(C) NO. 17980/2007, SLP(C) NO. 17981/2007, SLP(C) NO. 17983/2007, SLP(C) NO. 17984/2007, SLP(C) NO. 18036/2007, SLP(C) NO. 18037/2007, SLP(C) NO. 18038/2007, SLP(C) NO. 18039/2007, SLP(C) NO. 18040/2007, SLP(C) NO. 18041/2007, SLP(C) NO. 18042/2007, SLP(C) NO. 18043/2007, SLP(C) NO. 18044/2007, SLP(C) NO. 18045/2007, SLP(C) NO. 18046/2007, SLP(C) NO. 18047/2007, SLP(C) NO. 18048/2007, SLP(C) NO. 18049/2007, SLP(C) NO. 18050/2007, SLP(C) NO. 18051/2007, SLP(C) NO. 18053/2007, SLP(C) NO. 18054/2007, SLP(C) NO. 18055/2007, SLP(C) NO. 18056/2007, SLP(C) NO. 18057/2007, SLP(C) NO. 18058/2007, SLP(C) NO. 18059/2007, SLP(C) NO. 18061/2007, SLP(C) NO. 18062/2007, SLP(C) NO. 18063/2007, SLP(C) NO. 18064/2007, SLP(C) NO. 18065/2007, SLP(C) NO. 18066/2007, SLP(C) NO. 18067/2007, SLP(C) NO. 18068/2007, SLP(C) NO. 18069/2007, SLP(C) NO. 18073/2007, SLP(C) NO. 18074/2007, SLP(C) NO. 18075/2007, SLP(C) NO. 18076/2007, SLP(C) NO. 18077/2007, SLP(C) NO. 18078/2007, SLP(C) NO. 18079/2007, SLP(C) NO. 18080/2007, SLP(C) NO. 18081/2007, SLP(C) NO. 18082/2007, SLP(C) NO. 18083/2007, SLP(C) NO. 18084/2007, SLP(C) NO. 18085/2007, SLP(C) NO. 18086/2007, SLP(C) NO. 18087/2007, SLP(C) NO. 18088/2007, SLP(C) NO. 18089/2007, SLP(C) NO. 18090/2007, SLP(C) NO. 18091/2007, SLP(C) NO. 18092/2007, SLP(C) NO. 19049/2007, SLP(C) NO. 19050/2007, SLP(C) NO. 19051/2007, SLP(C) NO. 19052/2007, SLP(C) NO. 19053/2007, SLP(C) NO. 19055/2007, SLP(C) NO. 19057/2007, SLP(C) NO. 19059/2007, SLP(C) NO. 19060/2007, SLP(C) NO. 19062/2007, SLP(C) NO. 19064/2007, SLP(C) NO. 19066/2007, SLP(C) NO. 19068/2007, SLP(C) NO. 19070/2007, SLP(C) NO. 19071/2007, SLP(C) NO. 19072/2007, SLP(C) NO. 19073/2007, SLP(C) NO. 19074/2007, SLP(C) NO. 19076/2007, SLP(C) NO. 19077/2007, SLP(C) NO. 19094/2007, SLP(C) NO. 19095/2007, SLP(C) NO. 19096/2007, SLP(C) NO. 19099/2007, SLP(C) NO. 19100/2007, SLP(C) NO. 19101/2007, SLP(C) NO. 19102/2007, SLP(C) NO. 19103/2007, SLP(C) NO. 19104/2007, SLP(C) NO. 19105/2007, SLP(C) NO. 19106/2007, SLP(C) NO. 19107/2007, SLP(C) NO.

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19108/2007, SLP(C) NO. 19110/2007, SLP(C) NO. 19111/2007, SLP(C) NO. 19113/2007, SLP(C) NO. 19114/2007, SLP(C) NO. 19505/2007, SLP(C) NO. 19506/2007, SLP(C) NO. 19507/2007, SLP(C) NO. 19508/2007, SLP(C) NO. 19510/2007, SLP(C) NO. 19511/2007, SLP(C) NO. 19512/2007, SLP(C) NO. 19513/2007, SLP(C) NO. 19514/2007, SLP(C) NO. 19515/2007, SLP(C) NO. 19516/2007, SLP(C) NO. 19518/2007, SLP(C) NO. 19521/2007, SLP(C) NO. 19522/2007, SLP(C) NO. 19523-19528/2007, SLP(C) NO. 19529/2007, SLP(C) NO. 19530/2007, SLP(C) NO. 19531/2007, SLP(C) NO. 19543-19547/2007, SLP(C) NO. 20527/2007, SLP(C) NO. 20529/2007, SLP(C) NO. 20559/2007, SLP(C) NO. 21841/2007, SLP(C) NO. 21843/2007, SLP(C) NO. 21844/2007, SLP(C) NO. 21845/2007, SLP(C) NO. 21846/2007, SLP(C) NO. 21847/2007, SLP(C) NO. 21848/2007, SLP(C) NO. 21849/2007, SLP(C) NO. 21851/2007, SLP(C) NO. 21855/2007, SLP(C) NO. 21864/2007, SLP(C) NO. 21866/2007, SLP(C) NO. 21867/2007, SLP(C) NO. 21871-21904/2007, SLP(C) NO. 21905/2007, SLP(C) NO. 21907/2007, SLP(C) NO. 21908/2007, SLP(C) NO. 21909/2007, SLP(C) NO. 21910/2007, SLP(C) NO. 22947/2007, SLP(C) NO. 22958/2007, SLP(C) NO. 24934-25066/2007, SLP(C) NO. 742/2008, SLP(C) NO. 746/2008, SLP(C) NO. 747/2008, SLP(C) NO. 3230/2008, SLP(C) NO. 3231/2008, SLP(C) NO. 3233/2008, SLP(C) NO. 3234/2008, SLP(C) NO. 3236/2008, SLP(C) NO. 3237/2008, SLP(C) NO. 3238-3262/2008, C.A. NO. 4715/2008, C.A. NO. 5041-5042/2008, SLP(C) NO. 5407/2008, SLP(C) NO. 5408/2008, SLP(C) NO. 6148-6152/2008, SLP(C) NO. 6831/2008, SLP(C) NO. 7914/2008, SLP(C) NO. 8053-8077/2008, SLP(C) NO. 8199/2008, SLP(C) NO. 9227/2008, SLP(C) NO. 12424-12425/2008, SLP(C) NO. 13327/2008, SLP(C) NO. 13889/2008, SLP(C) NO. 14232-14252/2008, SLP(C) NO. 14454-14778/2008, SLP(C) NO. 14828/2008, SLP(C) NO. 14829/2008, SLP(C) NO. 14875/2008, SLP(C) NO. 15047/2008, SLP(C) NO. 15078/2008, SLP(C) NO. 15090/2008, SLP(C) NO. 15161/2008, SLP(C) NO. 15164/2008, SLP(C) NO. 15179/2008, SLP(C) NO. 15253/2008, SLP(C) NO. 15273/2008, SLP(C) NO. 15274/2008, SLP(C) NO. 15286-15287/2008, SLP(C) NO. 15288-15289/2008, S.L.P.(C)… /2008 CC NO. 15314 , SLP(C) NO. 15324/2008, SLP(C) NO. 15325/2008, SLP(C) NO. 15326/2008, SLP(C) NO. 15327/2008, SLP(C) NO. 15328/2008, SLP(C) NO. 15329/2008, SLP(C) NO. 15330/2008, SLP(C) NO. 15331/2008, SLP(C) NO. 15335/2008, SLP(C) NO. 15337/2008, SLP(C) NO. 15356/2008, SLP(C) NO. 15357/2008, SLP(C) NO. 15369/2008, SLP(C) NO. 15405/2008, SLP(C) NO. 15491/2008, SLP(C) NO. 15492/2008, SLP(C) NO. 15493/2008, SLP(C) NO. 15495/2008, SLP(C) NO. 15496/2008, SLP(C) NO. 15498/2008, SLP(C) NO. 15540/2008, SLP(C) NO. 15551/2008, SLP(C) NO. 15579/2008, SLP(C) NO. 15605/2008, SLP(C) NO. 15618/2008, SLP(C) NO. 15623/2008, SLP(C) NO. 15628/2008, SLP(C) NO. 15629/2008, SLP(C) NO. 15630/2008, SLP(C) NO. 15631/2008, SLP(C) NO. 15632/2008, SLP(C) NO. 15633/2008, SLP(C) NO. 15636/2008, SLP(C) NO. 15643/2008, SLP(C) NO. 15647/2008, SLP(C) NO. 15652/2008, SLP(C) NO. 15653/2008, SLP(C) NO. 15655/2008, SLP(C) NO.

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15656/2008, SLP(C) NO. 15657/2008, SLP(C) NO. 15659/2008, SLP(C) NO. 15660/2008, SLP(C) NO. 15666/2008, SLP(C) NO. 15684/2008, SLP(C) NO. 15700/2008, SLP(C) NO. 15711/2008, SLP(C) NO. 15819/2008, SLP(C) NO. 15845/2008, SLP(C) NO. 15934/2008, SLP(C) NO. 16664/2008, SLP(C) NO. 16667/2008, SLP(C) NO. 16689/2008, SLP(C) NO. 16733/2008, SLP(C) NO. 16754/2008, SLP(C) NO. 16832/2008, SLP(C) NO. 16837/2008, SLP(C) NO. 16841/2008, SLP(C) NO. 16865/2008, SLP(C) NO. 16885/2008, SLP(C) NO. 16926/2008, SLP(C) NO. 16930/2008, SLP(C) NO. 17187/2008, SLP(C) NO. 17192/2008, SLP(C) NO. 17193/2008, SLP(C) NO. 17203/2008, SLP(C) NO. 17204/2008, SLP(C) NO. 17233/2008, SLP(C) NO. 17267/2008, SLP(C) NO. 17269/2008, SLP(C) NO. 17271/2008, SLP(C) NO. 17272/2008, SLP(C) NO. 17274/2008, SLP(C) NO. 17276/2008, SLP(C) NO. 17277/2008, SLP(C) NO. 17279/2008, SLP(C) NO. 17280/2008, SLP(C) NO. 17282/2008, SLP(C) NO. 17367/2008, SLP(C) NO. 17368/2008, SLP(C) NO. 17369/2008, SLP(C) NO. 17370/2008, SLP(C) NO. 17372/2008, SLP(C) NO. 17373/2008, SLP(C) NO. 17374/2008, SLP(C) NO. 17375/2008, SLP(C) NO. 17376/2008, SLP(C) NO. 17377/2008, SLP(C) NO. 17408/2008, SLP(C) NO. 17865/2008, SLP(C) NO. 17892/2008, SLP(C) NO. 18001/2008, SLP(C) NO. 18030/2008, SLP(C) NO. 18034/2008, SLP(C) NO. 18035/2008, SLP(C) NO. 18040/2008, SLP(C) NO. 18066-18067/2008, SLP(C) NO. 18344/2008, SLP(C) NO. 18346/2008, SLP(C) NO. 18354/2008, SLP(C) NO. 18360-18364/2008, SLP(C) NO. 18379/2008, SLP(C) NO. 18405/2008, SLP(C) NO. 18532/2008, SLP(C) NO. 18533/2008, SLP(C) NO. 18582/2008, SLP(C) NO. 18684-18714/2008, SLP(C) NO. 18850/2008, SLP(C) NO. 18857/2008, SLP(C) NO. 18865/2008, SLP(C) NO. 18870/2008, SLP(C) NO. 18871/2008, SLP(C) NO. 19019/2008, SLP(C) NO. 19026/2008, SLP(C) NO. 19030/2008, SLP(C) NO. 19049/2008, SLP(C) NO. 19120/2008, SLP(C) NO. 19141/2008, SLP(C) NO. 19372/2008, SLP(C) NO. 19421/2008, SLP(C) NO. 19425/2008, SLP(C) NO. 19460/2008, SLP(C) NO. 19470/2008, SLP(C) NO. 19714/2008, SLP(C) NO. 19722/2008, SLP(C) NO. 19731/2008, SLP(C) NO. 19737/2008, SLP(C) NO. 19802/2008, SLP(C) NO. 19847/2008, SLP(C) NO. 19849/2008, SLP(C) NO. 19867/2008, SLP(C) NO. 19873/2008, SLP(C) NO. 19876/2008, SLP(C) NO. 19986/2008, SLP(C) NO. 20068/2008, SLP(C) NO. 20089/2008, SLP(C) NO. 20165/2008, SLP(C) NO. 20766/2008, SLP(C) NO. 20795/2008, SLP(C) NO. 21107/2008, SLP(C) NO. 21117-21125/2008, SLP(C) NO. 21127/2008, SLP(C) NO. 21506/2008, SLP(C) NO. 21509/2008, SLP(C) NO. 21510/2008, SLP(C) NO. 21819/2008, SLP(C) NO. 22081/2008, SLP(C) NO. 22083/2008, SLP(C) NO. 22084/2008, SLP(C) NO. 22086/2008, SLP(C) NO. 22100-22101/2008, SLP(C) NO. 22195/2008, SLP(C) NO. 22707/2008, SLP(C) NO. 22735/2008, SLP(C) NO. 22931/2008, SLP(C) NO. 23075/2008, SLP(C) NO. 23077/2008, SLP(C) NO. 23270/2008, SLP(C) NO. 23277/2008, SLP(C) NO. 23383/2008, SLP(C) NO. 23609/2008, SLP(C) NO. 23623/2008, SLP(C) NO. 25378/2008, SLP(C) NO. 25498/2008, SLP(C) NO. 26377/2008, SLP(C) NO. 26543/2008, SLP(C) NO. 26571/2008, SLP(C) NO.

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17488/2009, SLP(C) NO. 17490/2009, SLP(C) NO. 17491/2009, SLP(C) NO. 17492-17498/2009, SLP(C) NO. 17722/2009, SLP(C) NO. 17731/2009, SLP(C) NO. 17744/2009, SLP(C) NO. 19695/2009, SLP(C) NO. 22293/2009, SLP(C) NO. 22295/2009, SLP(C) NO. 22302/2009, SLP(C) NO. 22303/2009, SLP(C) NO. 22304/2009, SLP(C) NO. 22306/2009, SLP(C) NO. 22307/2009, SLP(C) NO. 22308/2009, SLP(C) NO. 22309/2009, SLP(C) NO. 22310/2009, SLP(C) NO. 22311/2009, SLP(C) NO. 22312/2009, SLP(C) NO. 22313/2009, SLP(C) NO. 22316/2009, SLP(C) NO. 22317/2009, SLP(C) NO. 22318/2009, SLP(C) NO. 22320/2009, SLP(C) NO. 22321/2009, SLP(C) NO. 22322/2009, SLP(C) NO. 22323/2009, SLP(C) NO. 22324/2009, SLP(C) NO. 22325/2009, SLP(C) NO. 22408/2009, SLP(C) NO. 22425/2009, SLP(C) NO. 22428/2009, SLP(C) NO. 23990/2009, SLP(C) NO. 24149/2009, SLP(C) NO. 24430/2009, SLP(C) NO. 24822/2009, SLP(C) NO. 25157/2009, SLP(C) NO. 25390/2009, SLP(C) NO. 25399-25400/2009, SLP(C) NO. 25467/2009, SLP(C) NO. 25470/2009, SLP(C) NO. 25474/2009, SLP(C) NO. 25753/2009, SLP(C) NO. 25797/2009, SLP(C) NO. 26116/2009, SLP(C) NO. 26236/2009, SLP(C) NO. 26509/2009, SLP(C) NO. 27883/2009, SLP(C) NO. 28509/2009, SLP(C) NO. 28583/2009, SLP(C) NO. 28696/2009, SLP(C) NO. 28775/2009, SLP(C) NO. 29597/2009, SLP(C) NO. 29868/2009, SLP(C) NO. 30383/2009, SLP(C) NO. 30746-30845/2009, SLP(C) NO. 30847/2009, SLP(C) NO. 31410/2009, SLP(C) NO. 31411/2009, SLP(C) NO. 31412/2009, SLP(C) NO. 33176/2009, SLP(C) NO. 33663-33665/2009, SLP(C) NO. 33672/2009, SLP(C) NO. 34253/2009, SLP(C) NO. 34859/2009, SLP(C) NO. 35038/2009, SLP(C) NO. 35585/2009, SLP(C) NO. 35587/2009, SLP(C) NO. 35740/2009, SLP(C) NO. 35742/2009, SLP(C) NO. 35743-35746/2009, SLP(C) NO. 35747/2009, SLP(C) NO. 35749/2009, SLP(C) NO. 35750/2009, SLP(C) NO. 35751/2009, SLP(C) NO. 35752/2009, SLP(C) NO. 35753/2009, SLP(C) NO. 35754/2009, SLP(C) NO. 35755/2009, SLP(C) NO. 35756/2009, SLP(C) NO. 35757/2009, SLP(C) NO. 36193/2009, SLP(C) NO. 36196/2009, SLP(C) NO. 36219/2009, SLP(C) NO. 36271/2009, W.P.(C) NO. 11/2010, W.P.(C) NO. 42/2010, W.P.(C) NO. 43/2010, W.P.(C) NO. 44/2010, W.P.(C) NO. 46/2010, W.P.(C) NO. 48/2010, W.P.(C) NO. 63/2010, W.P.(C) NO. 71/2010, SLP(C) NO. 104/2010, SLP(C) NO. 245/2010, SLP(C) NO. 247/2010, SLP(C) NO. 248/2010, S.L.P.(C)… /2010 CC NO. 886, S.L.P.(C)… /2010 CC NO. 1082, SLP(C) NO. 1820/2010, SLP(C) NO. 1876/2010, SLP(C) NO. 2459/2010, SLP(C) NO. 3387/2010, SLP(C) NO. 4102/2010, SLP(C) NO. 4362/2010, SLP(C) NO. 4388/2010, SLP(C) NO. 4389/2010, SLP(C) NO. 4390/2010, SLP(C) NO. 4511/2010, SLP(C) NO. 4572/2010, SLP(C) NO. 4720/2010, SLP(C) NO. 5151/2010, SLP(C) NO. 5308/2010, SLP(C) NO. 5309/2010, C.A. NO. 5343- 5344/2010, SLP(C) NO. 6037/2010, SLP(C) NO. 6723/2010, SLP(C) NO. 6762/2010, SLP(C) NO. 6763/2010, SLP(C) NO. 6765/2010, SLP(C) NO. 6770/2010, SLP(C) NO. 6811/2010, SLP(C) NO. 7356/2010, SLP(C) NO. 7426/2010, SLP(C) NO. 7776/2010, SLP(C) NO. 7929/2010, SLP(C) NO. 9022/2010, SLP(C) NO. 9077/2010, SLP(C) NO. 9702/2010, SLP(C) NO.

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9723/2010, SLP(C) NO. 10361/2010, SLP(C) NO. 11419/2010, SLP(C) NO. 11423/2010, SLP(C) NO. 12690/2010, SLP(C) NO. 14845/2010, SLP(C) NO. 14886/2010, SLP(C) NO. 15015/2010, SLP(C) NO. 15903/2010, SLP(C) NO. 16694/2010, SLP(C) NO. 16720/2010, SLP(C) NO. 18318/2010, SLP(C) NO. 18834/2010, SLP(C) NO. 19194/2010, SLP(C) NO. 19199/2010, SLP(C) NO. 19217/2010, SLP(C) NO. 22327/2010, SLP(C) NO. 22520/2010, SLP(C) NO. 23836/2010, SLP(C) NO. 29578/2010, SLP(C) NO. 36486/2010, W.P.(C) NO. 31/2011, W.P.(C) NO. 497/2011, C.A. NO. 905/2011, SLP(C) NO. 1308/2011, C.A. NO. 2041/2011, C.A. NO. 2042/2011, S.L.P.(C)… /2011 CC NO. 2103, SLP(C) NO. 3433/2011, SLP(C) NO. 4730/2011, SLP(C) NO. 4743/2011, SLP(C) NO. 4747/2011, SLP(C) NO. 4750/2011, SLP(C) NO. 5094/2011, SLP(C) NO. 5105/2011, SLP(C) NO. 5106/2011, SLP(C) NO. 5110/2011, SLP(C) NO. 5112/2011, SLP(C) NO. 6351/2011, SLP(C) NO. 6492/2011, SLP(C) NO. 8571/2011, SLP(C) NO. 9758/2011, C.A. NO. 9900-9903/2011, SLP(C) NO. 12605/2011, SLP(C) NO. 13451/2011, SLP(C) NO. 13525/2011, SLP(C) NO. 13526/2011, SLP(C) NO. 14144/2011, SLP(C) NO. 14269/2011, SLP(C) NO. 14342/2011, SLP(C) NO. 18858/2011, SLP(C) NO. 18859/2011, SLP(C) NO. 18862/2011, SLP(C) NO. 18863/2011, SLP(C) NO. 18864/2011, SLP(C) NO. 33344/2011, W.P.(C) NO. 278/2012, W.P.(C) NO. 290/2012, C.A. NO. 4210/2012, C.A. NO. 5860/2012, C.A. NO. 5861/2012, C.A. NO. 8275/2012, C.A. NO. 8278/2012, C.A. NO. 8280/2012, C.A. NO. 8283/2012, C.A. NO. 8284/2012, C.A. NO. 8286/2012, C.A. NO. 8290/2012, C.A. NO. 8292/2012, C.A. NO. 8294/2012, C.A. NO. 8295/2012, C.A. NO. 8296/2012, C.A. NO. 8297/2012, C.A. NO. 8298/2012, C.A. NO. 8299/2012, C.A. NO. 8300/2012, C.A. NO. 8301/2012, C.A. NO. 8302/2012, C.A. NO. 8303/2012, C.A. NO. 8304/2012, C.A. NO. 8305/2012, C.A. NO. 8306/2012, C.A. NO. 8307/2012, C.A. NO. 8308/2012, C.A. NO. 8309/2012, C.A. NO. 8311/2012, C.A. NO. 8312/2012, C.A. NO. 8313/2012, C.A. NO. 8314/2012, C.A. NO. 8315/2012, C.A. NO. 8316/2012, SLP(C) NO. 8333/2012, C.A. NO. 8734/2012, C.A. NO. 8735/2012, C.A. NO. 8736/2012, C.A. NO. 8737/2012, C.A. NO. 8738/2012, C.A. NO. 8739/2012, C.A. NO. 8740/2012, C.A. NO. 8741/2012, C.A. NO. 8744/2012, C.A. NO. 8745/2012, C.A. NO. 8832/2012, C.A. NO. 8833/2012, C.A. NO. 8834/2012, C.A. NO. 8836/2012, C.A. NO. 8837/2012, C.A. NO. 8839/2012, C.A. NO. 8840/2012, C.A. NO. 8841/2012, C.A. NO. 8842/2012, C.A. NO. 8843/2012, C.A. NO. 8844/2012, C.A. NO. 8845/2012, C.A. NO. 8846/2012, C.A. NO. 9148/2012, C.A. NO. 9149/2012, C.A. NO. 9150/2012, C.A. NO. 9151/2012, C.A. NO. 9152/2012, C.A. NO. 9153/2012, C.A. NO. 9154/2012, C.A. NO. 9155/2012, C.A. NO. 9156/2012, C.A. NO. 9157/2012, C.A. NO. 9158/2012, C.A. NO. 9159/2012, C.A. NO. 9160/2012, C.A. NO. 9161/2012, C.A. NO. 9162/2012, C.A. NO. 9163/2012, C.A. NO. 9164/2012, C.A. NO. 9165/2012, C.A. NO. 9166/2012, C.A. NO. 9167/2012, C.A. NO. 9168/2012, C.A. NO. 9169/2012, C.A. NO. 9170/2012, C.A. NO. 9292/2012, C.A. NO. 9293/2012, SLP(C) NO. 16535-16536/2012, SLP(C) NO. 16538/2012,

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9164/2015, SLP(C) NO. 9167/2015, SLP(C) NO. 9176/2015, SLP(C) NO. 9181/2015, SLP(C) NO. 11832/2015, SLP(C) NO. 9188/2015, SLP(C) NO. 9348/2015, SLP(C) NO. 5908/2015, SLP(C) NO. 9386/2015, SLP(C) NO. 9484/2015, SLP(C) NO. 9582/2015, SLP(C) NO. 7874/2015, SLP(C) NO. 11080-

11086/2015, SLP(C) NO. 12839/2015, SLP(C) NO. 11156/2015, SLP(C) NO. 11170/2015, SLP(C) NO. 12844/2015, SLP(C) NO. 8162/2015, SLP(C) NO. 11484/2015, SLP(C) NO. 12847/2015, SLP(C) NO. 11582/2015, SLP(C) NO. 11592/2015, SLP(C) NO. 13200/2015, SLP(C) NO. 13201/2015, SLP(C) NO. 4219-

4227/2015, SLP(C) NO. 2966-2999/2015, SLP(C) NO. 11888/2015, SLP(C) NO. 11203/2015, SLP(C) NO. 14828/2015, SLP(C) NO. 14854/2015, SLP(C) NO. 15856/2015, SLP(C) NO. 15857/2015, SLP(C) NO. 15858/2015, SLP(C) NO. 11458-11465/2015, SLP(C) NO. 18213/2015, SLP(C) NO. 18333/2015, SLP(C) NO. 16312/2015, SLP(C) NO. 18334/2015, SLP(C) NO. 18335/2015, SLP(C) NO. 15855/2015, SLP(C) NO. 18338/2015, SLP(C) NO. 18184/2015, SLP(C) NO. 18179/2015, C.A. NO. 1956/2003, SLP(C) NO. 8775-8777/2015, SLP(C) NO. 5303/2015, SLP(C) NO. 16853/2015, SLP(C) NO. 21720/2015, SLP(C) NO. 23673- 23674/2015, SLP(C) NO. 23764/2015, SLP(C) NO. 23765/2015, SLP(C) NO. 15353/2015, SLP(C) NO. 22349/2015, SLP(C) NO. 21718/2015, SLP(C) NO. 24547/2015, SLP(C) NO. 23757/2015, C.A. NO. 8240/2015, SLP(C) NO. 26751/2015, SLP(C) NO. 9117/2015, SLP(C) NO. 2214/2015, SLP(C) NO. 2531/2015, SLP(C) NO. 2289/2015, SLP(C) NO. 2530/2015, SLP(C) NO. 2392/2015, SLP(C) NO. 2499/2015, SLP(C) NO. 2502/2015, SLP(C) NO. 2538- 2543/2015, SLP(C) NO. 2426/2015, SLP(C) NO. 2358/2015, SLP(C) NO. 2401/2015, SLP(C) NO. 2389/2015, SLP(C) NO. 2485/2015, SLP(C) NO. 2495/2015, SLP(C) NO. 3163-3164/2015, SLP(C) NO. 3666/2015, SLP(C) NO. 3679/2015, SLP(C) NO. 3723/2015, SLP(C) NO. 3321/2015, SLP(C) NO. 4198-

4199/2015, SLP(C) NO. 3325/2015, SLP(C) NO. 3466/2015, SLP(C) NO. 3635/2015, SLP(C) NO. 3318/2015, SLP(C) NO. 30396/2015, C.A. NO. 110/2016, C.A. NO. 109/2016, C.A. NO. 583/2016, SLP(C) NO. 4945/2016, SLP(C) NO. 8253/2016, SLP(C) NO. 8204/2008, C.A. NO. 3925/2016, SLP(C) NO. 2057/2016, SLP(C) NO. 86/2016, SLP(C) NO. 72/2016, C.A. NO. 5534/2016, C.A. NO. 5536/2016, C.A. NO. 5137/2016, SLP(C) NO. 33923/2012, C.A. NO. 5537/2016, SLP(C) NO. 16116/2009, SLP(C) NO. 30594/2009, SLP(C) NO. 2636/2015, SLP(C) NO. 2680/2015, SLP(C) NO. 2952/2015, SLP(C) NO. 2641/2015, SLP(C) NO. 2588/2015, SLP(C) NO. 2928/2015, SLP(C) NO. 2737/2015, SLP(C) NO. 2682/2015, SLP(C) NO. 8197-8198/2015, SLP(C) NO. 4197/2015, C.A. NO. 5538/2016, C.A. NO. 5533/2016, SLP(C) NO. 14539-14541/2016, SLP(C) NO. 16820/2016, C.A. NO. 4642-4643/2016

ORDER

By majority the Court answers the reference in the following terms: 10

Page 10

Taxes simpliciter are not within the contemplation of Part XIII of the Constitution of India. The word ‘Free’ used in Article 301 does not mean “free from taxation”.
Only such taxes as are discriminatory in nature are prohibited by Article 304(a). It follows that levy of a non-discriminatory tax would not constitute an infraction of Article 301.
Clauses (a) and (b) of Article 304 have to be read disjunctively.
A levy that violates 304(a) cannot be saved even if the procedure under Article 304(b) or the proviso there under is satisfied.
The compensatory tax theory evolved in Automobile Transport case and subsequently modified in Jindal’s case has no juristic basis and is therefore rejected.
Decisions of this Court in Atiabari, Automobile Transport and Jindal cases (supra) and all other judgments that follow these pronouncements are to the extent of such reliance over ruled.
A tax on entry of goods into a local area for use, sale or consumption therein is permissible although similar goods are not produced within the taxing state.
Article 304 (a) frowns upon discrimination (of a hostile nature in the protectionist sense) and not on mere differentiation. Therefore, incentives, set-offs etc. granted to a specified class of dealers for a limited period of time in a non-hostile fashion with a view to developing economically backward areas would not violate Article 304(a). The question whether the levies in the present case indeed satisfy this test is left to be determined by the regular benches hearing the matters.
States are well within their right to design their fiscal legislations to ensure that the tax burden on goods imported from other States and goods produced within the State fall equally. Such measures if taken would not contravene Article 304(a) of the Constitution. The question whether the levies in the present case indeed satisfy this test is left to be determined by the regular benches hearing the matters.

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The questions whether the entire State can be notified as a local area and whether entry tax can be levied on goods entering the landmass of India from another country are left open to be determined in appropriate proceedings.

.……………..………….…..…CJI.

(T.S. THAKUR)

…………………………….…..…J.

(A.K. SIKRI)

…………………………….…..…J.

(S.A. BOBDE)

…………………………….…..…J.

(SHIVA KIRTI SINGH)

…………………………….…..…J.

(N.V. RAMANA)

…………………………….…..…J.

(R. BANUMATHI)

…………………………….…..…J.

(A.M. KHANWILKAR)

New Delhi;

November 11, 2016

Page 12

R E P O R T A B L E

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.3453 OF 2002

Jindal Stainless Ltd. & Anr. …Appellant(s)

Versus

State of Haryana & Ors. …Respondent(s)

WITH

C.A. NO. 6383-6421/1997, C.A. NO. 6422-6435/1997, C.A. NO. 6436/1997, C.A. NO. 6437-6440/1997 , C.A. NO. 3381-3400/1998, C.A. NO. 4651/1998, C.A. NO. 918/1999, C.A. NO. 2769/2000, C.A. NO. 4471/2000, C.A. NO. 3314/2001, C.A. NO. 3454/2002, C.A. NO. 3455/2002, C.A. NO. 3456-3459/2002, C.A. NO. 3460/2002, C.A. NO. 3461/2002, C.A. NO. 3462-3463/2002, C.A. NO. 3464/2002, C.A. NO. 3465/2002, C.A. NO. 3466/2002, C.A. NO. 3467/2002, C.A. NO. 3468/2002, C.A. NO. 3469/2002, C.A. NO. 3470/2002, C.A. NO. 3471/2002, C.A. NO. 4008/2002, C.A. NO. 5385/2002, C.A. NO. 5740/2002, C.A. NO. 5858/2002, W.P.(C) NO. 512/2003, W.P.(C) NO. 574/2003, C.A. NO. 2608/2003, C.A. NO. 2633/2003, C.A. NO. 2637/2003, C.A. NO. 2638/2003, C.A. NO. 3720-3722/2003, C.A. NO. 6331/2003, C.A. NO. 8241/2003, C.A. NO. 8242/2003, C.A. NO. 8243/2003, C.A. NO. 8244/2003, C.A. NO. 8245/2003, C.A. NO. 8246/2003, C.A. NO. 8247/2003, C.A. NO. 8248/2003, C.A. NO. 8249/2003, C.A. NO. 8250/2003, C.A. NO. 8251/2003, C.A. NO. 8252/2003, T.C.(C) NO. 13/2004, W.P.(C) NO. 66/2004, W.P.(C) NO. 221/2004, C.A. NO. 997- 998/2004, C.A. NO. 3144/2004, C.A. NO. 3145/2004, C.A. NO. 3146/2004, C.A. NO. 4953/2004, C.A. NO. 4954/2004, C.A. NO. 5139/2004, C.A. NO. 5141/2004, C.A. NO. 5142/2004, C.A. NO. 5143/2004, C.A. NO. 5144/2004, C.A. NO. 5145/2004, C.A. NO. 5147/2004, C.A. NO. 5148/2004, C.A. NO. 5149/2004, C.A. NO. 5150/2004, C.A. NO. 5151/2004, C.A. NO. 5152/2004, C.A. NO. 5153/2004, C.A. NO. 5154/2004, C.A. NO. 5155/2004, C.A. NO. 5156/2004, C.A. NO. 5157/2004, C.A. NO. 5158/2004, C.A. NO. 5159/2004, C.A. NO. 5160/2004, C.A. NO. 5162/2004, C.A. NO. 5163/2004, C.A. NO.

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5164/2004, C.A. NO. 5165/2004, C.A. NO. 5166/2004, C.A. NO. 5167/2004, C.A. NO. 5168/2004, C.A. NO. 5169/2004, C.A. NO. 5170/2004, C.A. NO. 7658/2004, SLP(C) NO. 9479/2004, SLP(C) NO. 9496/2004, SLP(C) NO. 9569/2004, SLP(C) NO. 9832/2004, SLP(C) NO. 9883/2004, SLP(C) NO. 9885/2004, SLP(C) NO. 9891/2004, SLP(C) NO. 9893/2004, SLP(C) NO. 9898/2004, SLP(C) NO. 9899/2004, SLP(C) NO. 9901/2004, SLP(C) NO. 9904/2004, SLP(C) NO. 9910/2004, SLP(C) NO. 9911/2004, SLP(C) NO. 9912/2004, SLP(C) NO. 9950/2004, SLP(C) NO. 9964/2004, SLP(C) NO. 9976/2004, SLP(C) NO. 9989/2004, SLP(C) NO. 9991/2004, SLP(C) NO. 9993/2004, SLP(C) NO. 9998/2004, SLP(C) NO. 9999/2004, SLP(C) NO. 10003/2004, SLP(C) NO. 10007/2004, SLP(C) NO. 10129/2004, SLP(C) NO. 10133/2004, SLP(CCJI) NO. 10134/2004, SLP(C) NO. 10153/2004, SLP(C) NO. 10154/2004, SLP(C) NO. 10156/2004, SLP(C) NO. 10161/2004, SLP(C) NO. 10164/2004, SLP(C) NO. 10167/2004, SLP(C) NO. 10206/2004, SLP(C) NO. 10207/2004, SLP(C) NO. 10232/2004, SLP(C) NO. 10366/2004, SLP(C) NO. 10381/2004, SLP(C) NO. 10382/2004, SLP(C) NO. 10384/2004, SLP(C) NO. 10385/2004, SLP(C) NO. 10391/2004, SLP(C) NO. 10402/2004, SLP(C) NO. 10403/2004, SLP(C) NO. 10404/2004, SLP(C) NO. 10407/2004, SLP(C) NO. 10417/2004, SLP(C) NO. 10449/2004, SLP(C) NO. 10493/2004, SLP(C) NO. 10495/2004, SLP(C) NO. 10497/2004, SLP(C) NO. 10501/2004, SLP(C) NO. 10505/2004, SLP(C) NO. 10539/2004, SLP(C) NO. 10557/2004, SLP(C) NO. 10563/2004, SLP(C) NO. 10566/2004, SLP(C) NO. 10567/2004, SLP(C) NO. 10568/2004, SLP(C) NO. 10569/2004, SLP(C) NO. 10571/2004, SLP(C) NO. 10704/2004, SLP(C) NO. 10706/2004, SLP(C) NO. 10708/2004, SLP(C) NO. 10736/2004, SLP(C) NO. 10906/2004, SLP(C) NO. 10907/2004, SLP(C) NO. 10908/2004, SLP(C) NO. 10909/2004, SLP(C) NO. 10910/2004, SLP(C) NO. 10923/2004, SLP(C) NO. 10929/2004, SLP(C) NO. 10977/2004, SLP(C) NO. 11012/2004, SLP(C) NO. 11266/2004, SLP(C) NO. 11271/2004, SLP(C) NO. 11274/2004, SLP(C) NO. 11281/2004, SLP(C) NO. 11320/2004, SLP(C) NO. 11326/2004, SLP(C) NO. 11328/2004, SLP(C) NO. 11329/2004, SLP(C) NO. 11370/2004, SLP(C) NO. 14380/2005, SLP(C) NO. 1101/2007, SLP(C) NO. 1288/2007, SLP(C) NO. 6914/2007, SLP(C) NO. 9054/2007, SLP(C) NO. 10694/2007, SLP(C) NO. 12959/2007, SLP(C) NO. 13806/2007, SLP(C) NO. 14070/2007, SLP(C) NO. 14819/2007, SLP(C) NO. 14820/2007, SLP(C) NO. 14821/2007, SLP(C) NO. 14823/2007, SLP(C) NO. 14824/2007, SLP(C) NO. 14826/2007, SLP(C) NO. 14828/2007, SLP(C) NO. 14829/2007, SLP(C) NO. 14830/2007, SLP(C) NO. 14832/2007, SLP(C) NO. 14833/2007, SLP(C) NO. 14835/2007, SLP(C) NO. 14837/2007, SLP(C) NO. 14838/2007, SLP(C) NO. 14839/2007, SLP(C) NO. 14841/2007, SLP(C) NO. 14842/2007, SLP(C) NO. 14845/2007, SLP(C) NO. 14846/2007, SLP(C) NO.

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14847/2007, SLP(C) NO. 15082-15085/2007, SLP(C) NO. 15807/2007, SLP(C) NO. 16351/2007, SLP(C) NO. 17589/2007, SLP(C) NO. 17590/2007, SLP(C) NO. 17905/2007, SLP(C) NO. 17906/2007, SLP(C) NO. 17907/2007, SLP(C) NO. 17908/2007, SLP(C) NO. 17909/2007, SLP(C) NO. 17910/2007, SLP(C) NO. 17911/2007, SLP(C) NO. 17913/2007, SLP(C) NO. 17914/2007, SLP(C) NO. 17915/2007, SLP(C) NO. 17916/2007, SLP(C) NO. 17917/2007, SLP(C) NO. 17918/2007, SLP(C) NO. 17919/2007, SLP(C) NO. 17920/2007, SLP(C) NO. 17921/2007, SLP(C) NO. 17922/2007, SLP(C) NO. 17923/2007, SLP(C) NO. 17924/2007, SLP(C) NO. 17925/2007, SLP(C) NO. 17926/2007, SLP(C) NO. 17929/2007, SLP(C) NO. 17930/2007, SLP(C) NO. 17933/2007, SLP(C) NO. 17934/2007, SLP(C) NO. 17936/2007, SLP(C) NO. 17937/2007, SLP(C) NO. 17938/2007, SLP(C) NO. 17939/2007, SLP(C) NO. 17941/2007, SLP(C) NO. 17942/2007, SLP(C) NO. 17943/2007, SLP(C) NO. 17944/2007, SLP(C) NO. 17957/2007, SLP(C) NO. 17959/2007, SLP(C) NO. 17960/2007, SLP(C) NO. 17961/2007, SLP(C) NO. 17962/2007, SLP(C) NO. 17963/2007, SLP(C) NO. 17964/2007, SLP(C) NO. 17965/2007, SLP(C) NO. 17972/2007, SLP(C) NO. 17973/2007, SLP(C) NO. 17974/2007, SLP(C) NO. 17975/2007, SLP(C) NO. 17976/2007, SLP(C) NO. 17977/2007, SLP(C) NO. 17978/2007, SLP(C) NO. 17979/2007, SLP(C) NO. 17980/2007, SLP(C) NO. 17981/2007, SLP(C) NO. 17983/2007, SLP(C) NO. 17984/2007, SLP(C) NO. 18036/2007, SLP(C) NO. 18037/2007, SLP(C) NO. 18038/2007, SLP(C) NO. 18039/2007, SLP(C) NO. 18040/2007, SLP(C) NO. 18041/2007, SLP(C) NO. 18042/2007, SLP(C) NO. 18043/2007, SLP(C) NO. 18044/2007, SLP(C) NO. 18045/2007, SLP(C) NO. 18046/2007, SLP(C) NO. 18047/2007, SLP(C) NO. 18048/2007, SLP(C) NO. 18049/2007, SLP(C) NO. 18050/2007, SLP(C) NO. 18051/2007, SLP(C) NO. 18053/2007, SLP(C) NO. 18054/2007, SLP(C) NO. 18055/2007, SLP(C) NO. 18056/2007, SLP(C) NO. 18057/2007, SLP(C) NO. 18058/2007, SLP(C) NO. 18059/2007, SLP(C) NO. 18061/2007, SLP(C) NO. 18062/2007, SLP(C) NO. 18063/2007, SLP(C) NO. 18064/2007, SLP(C) NO. 18065/2007, SLP(C) NO. 18066/2007, SLP(C) NO. 18067/2007, SLP(C) NO. 18068/2007, SLP(C) NO. 18069/2007, SLP(C) NO. 18073/2007, SLP(C) NO. 18074/2007, SLP(C) NO. 18075/2007, SLP(C) NO. 18076/2007, SLP(C) NO. 18077/2007, SLP(C) NO. 18078/2007, SLP(C) NO. 18079/2007, SLP(C) NO. 18080/2007, SLP(C) NO. 18081/2007, SLP(C) NO. 18082/2007, SLP(C) NO. 18083/2007, SLP(C) NO. 18084/2007, SLP(C) NO. 18085/2007, SLP(C) NO. 18086/2007, SLP(C) NO. 18087/2007, SLP(C) NO. 18088/2007, SLP(C) NO. 18089/2007, SLP(C) NO. 18090/2007, SLP(C) NO. 18091/2007, SLP(C) NO. 18092/2007, SLP(C) NO. 19049/2007, SLP(C) NO. 19050/2007, SLP(C) NO. 19051/2007, SLP(C) NO. 19052/2007, SLP(C) NO. 19053/2007, SLP(C) NO. 19055/2007, SLP(C) NO. 19057/2007, SLP(C) NO. 19059/2007, SLP(C) NO. 19060/2007,

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SLP(C) NO. 19062/2007, SLP(C) NO. 19064/2007, SLP(C) NO. 19066/2007, SLP(C) NO. 19068/2007, SLP(C) NO. 19070/2007, SLP(C) NO. 19071/2007, SLP(C) NO. 19072/2007, SLP(C) NO. 19073/2007, SLP(C) NO. 19074/2007, SLP(C) NO. 19076/2007, SLP(C) NO. 19077/2007, SLP(C) NO. 19094/2007, SLP(C) NO. 19095/2007, SLP(C) NO. 19096/2007, SLP(C) NO. 19099/2007, SLP(C) NO. 19100/2007, SLP(C) NO. 19101/2007, SLP(C) NO. 19102/2007, SLP(C) NO. 19103/2007, SLP(C) NO. 19104/2007, SLP(C) NO. 19105/2007, SLP(C) NO. 19106/2007, SLP(C) NO. 19107/2007, SLP(C) NO. 19108/2007, SLP(C) NO. 19110/2007, SLP(C) NO. 19111/2007, SLP(C) NO. 19113/2007, SLP(C) NO. 19114/2007, SLP(C) NO. 19505/2007, SLP(C) NO. 19506/2007, SLP(C) NO. 19507/2007, SLP(C) NO. 19508/2007, SLP(C) NO. 19510/2007, SLP(C) NO. 19511/2007, SLP(C) NO. 19512/2007, SLP(C) NO. 19513/2007, SLP(C) NO. 19514/2007, SLP(C) NO. 19515/2007, SLP(C) NO. 19516/2007, SLP(C) NO. 19518/2007, SLP(C) NO. 19521/2007, SLP(C) NO. 19522/2007, SLP(C) NO. 19523-19528/2007, SLP(C) NO. 19529/2007, SLP(C) NO. 19530/2007, SLP(C) NO. 19531/2007, SLP(C) NO. 19543-19547/2007, SLP(C) NO. 20527/2007, SLP(C) NO. 20529/2007, SLP(C) NO. 20559/2007, SLP(C) NO. 21841/2007, SLP(C) NO. 21843/2007, SLP(C) NO. 21844/2007, SLP(C) NO. 21845/2007, SLP(C) NO. 21846/2007, SLP(C) NO. 21847/2007, SLP(C) NO. 21848/2007, SLP(C) NO. 21849/2007, SLP(C) NO. 21851/2007, SLP(C) NO. 21855/2007, SLP(C) NO. 21864/2007, SLP(C) NO. 21866/2007, SLP(C) NO. 21867/2007, SLP(C) NO. 21871-21904/2007, SLP(C) NO. 21905/2007, SLP(C) NO. 21907/2007, SLP(C) NO. 21908/2007, SLP(C) NO. 21909/2007, SLP(C) NO. 21910/2007, SLP(C) NO. 22947/2007, SLP(C) NO. 22958/2007, SLP(C) NO. 24934-25066/2007, SLP(C) NO. 742/2008, SLP(C) NO. 746/2008, SLP(C) NO. 747/2008, SLP(C) NO. 3230/2008, SLP(C) NO. 3231/2008, SLP(C) NO. 3233/2008, SLP(C) NO. 3234/2008, SLP(C) NO. 3236/2008, SLP(C) NO. 3237/2008, SLP(C) NO. 3238-3262/2008, C.A. NO. 4715/2008, C.A. NO. 5041-5042/2008, SLP(C) NO. 5407/2008, SLP(C) NO. 5408/2008, SLP(C) NO. 6148-6152/2008, SLP(C) NO. 6831/2008, SLP(C) NO. 7914/2008, SLP(C) NO. 8053-8077/2008, SLP(C) NO. 8199/2008, SLP(C) NO. 9227/2008, SLP(C) NO. 12424-12425/2008, SLP(C) NO. 13327/2008, SLP(C) NO. 13889/2008, SLP(C) NO. 14232-14252/2008, SLP(C) NO. 14454-14778/2008, SLP(C) NO. 14828/2008, SLP(C) NO. 14829/2008, SLP(C) NO. 14875/2008, SLP(C) NO. 15047/2008, SLP(C) NO. 15078/2008, SLP(C) NO. 15090/2008, SLP(C) NO. 15161/2008, SLP(C) NO. 15164/2008, SLP(C) NO. 15179/2008, SLP(C) NO. 15253/2008, SLP(C) NO. 15273/2008, SLP(C) NO. 15274/2008, SLP(C) NO. 15286-15287/2008, SLP(C) NO. 15288-15289/2008, S.L.P.(C)… /2008 CC NO. 15314 , SLP(C) NO. 15324/2008, SLP(C) NO. 15325/2008, SLP(C) NO. 15326/2008, SLP(C)

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15327/2008, SLP(C) NO. 15328/2008, SLP(C) NO. 15329/2008, SLP(C) NO. 15330/2008, SLP(C) NO. 15331/2008, SLP(C) NO. 15335/2008, SLP(C) NO. 15337/2008, SLP(C) NO. 15356/2008, SLP(C) NO. 15357/2008, SLP(C) NO. 15369/2008, SLP(C) NO. 15405/2008, SLP(C) NO. 15491/2008, SLP(C) NO. 15492/2008, SLP(C) NO. 15493/2008, SLP(C) NO. 15495/2008, SLP(C) NO. 15496/2008, SLP(C) NO. 15498/2008, SLP(C) NO. 15540/2008, SLP(C) NO. 15551/2008, SLP(C) NO. 15579/2008, SLP(C) NO. 15605/2008, SLP(C) NO. 15618/2008, SLP(C) NO. 15623/2008, SLP(C) NO. 15628/2008, SLP(C) NO. 15629/2008, SLP(C) NO. 15630/2008, SLP(C) NO. 15631/2008, SLP(C) NO. 15632/2008, SLP(C) NO. 15633/2008, SLP(C) NO. 15636/2008, SLP(C) NO. 15643/2008, SLP(C) NO. 15647/2008, SLP(C) NO. 15652/2008, SLP(C) NO. 15653/2008, SLP(C) NO. 15655/2008, SLP(C) NO. 15656/2008, SLP(C) NO. 15657/2008, SLP(C) NO. 15659/2008, SLP(C) NO. 15660/2008, SLP(C) NO. 15666/2008, SLP(C) NO. 15684/2008, SLP(C) NO. 15700/2008, SLP(C) NO. 15711/2008, SLP(C) NO. 15819/2008, SLP(C) NO. 15845/2008, SLP(C) NO. 15934/2008, SLP(C) NO. 16664/2008, SLP(C) NO. 16667/2008, SLP(C) NO. 16689/2008, SLP(C) NO. 16733/2008, SLP(C) NO. 16754/2008, SLP(C) NO. 16832/2008, SLP(C) NO. 16837/2008, SLP(C) NO. 16841/2008, SLP(C) NO. 16865/2008, SLP(C) NO. 16885/2008, SLP(C) NO. 16926/2008, SLP(C) NO. 16930/2008, SLP(C) NO. 17187/2008, SLP(C) NO. 17192/2008, SLP(C) NO. 17193/2008, SLP(C) NO. 17203/2008, SLP(C) NO. 17204/2008, SLP(C) NO. 17233/2008, SLP(C) NO. 17267/2008, SLP(C) NO. 17269/2008, SLP(C) NO. 17271/2008, SLP(C) NO. 17272/2008, SLP(C) NO. 17274/2008, SLP(C) NO. 17276/2008, SLP(C) NO. 17277/2008, SLP(C) NO. 17279/2008, SLP(C) NO. 17280/2008, SLP(C) NO. 17282/2008, SLP(C) NO. 17367/2008, SLP(C) NO. 17368/2008, SLP(C) NO. 17369/2008, SLP(C) NO. 17370/2008, SLP(C) NO. 17372/2008, SLP(C) NO. 17373/2008, SLP(C) NO. 17374/2008, SLP(C) NO. 17375/2008, SLP(C) NO. 17376/2008, SLP(C) NO. 17377/2008, SLP(C) NO. 17408/2008, SLP(C) NO. 17865/2008, SLP(C) NO. 17892/2008, SLP(C) NO. 18001/2008, SLP(C) NO. 18030/2008, SLP(C) NO. 18034/2008, SLP(C) NO. 18035/2008, SLP(C) NO. 18040/2008, SLP(C) NO. 18066-18067/2008, SLP(C) NO. 18344/2008, SLP(C) NO. 18346/2008, SLP(C) NO. 18354/2008, SLP(C) NO. 18360-18364/2008, SLP(C) NO. 18379/2008, SLP(C) NO. 18405/2008, SLP(C) NO. 18532/2008, SLP(C) NO. 18533/2008, SLP(C) NO. 18582/2008, SLP(C) NO. 18684-18714/2008, SLP(C) NO. 18850/2008, SLP(C) NO. 18857/2008, SLP(C) NO. 18865/2008, SLP(C) NO. 18870/2008, SLP(C) NO. 18871/2008, SLP(C) NO. 19019/2008, SLP(C) NO. 19026/2008, SLP(C) NO. 19030/2008, SLP(C) NO. 19049/2008, SLP(C) NO. 19120/2008, SLP(C) NO. 19141/2008, SLP(C) NO. 19372/2008, SLP(C) NO. 19421/2008, SLP(C) NO. 19425/2008, SLP(C) NO. 19460/2008, SLP(C) NO. 19470/2008,

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SLP(C) NO. 19714/2008, SLP(C) NO. 19722/2008, SLP(C) NO. 19731/2008, SLP(C) NO. 19737/2008, SLP(C) NO. 19802/2008, SLP(C) NO. 19847/2008, SLP(C) NO. 19849/2008, SLP(C) NO. 19867/2008, SLP(C) NO. 19873/2008, SLP(C) NO. 19876/2008, SLP(C) NO. 19986/2008, SLP(C) NO. 20068/2008, SLP(C) NO. 20089/2008, SLP(C) NO. 20165/2008, SLP(C) NO. 20766/2008, SLP(C) NO. 20795/2008, SLP(C) NO. 21107/2008, SLP(C) NO. 21117-

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SLP(C) NO. 6701/2009, SLP(C) NO. 6702/2009, SLP(C) NO. 6703/2009, SLP(C) NO. 6704/2009, SLP(C) NO. 6705/2009, SLP(C) NO. 6708/2009, SLP(C) NO. 6709/2009, SLP(C) NO. 6710/2009, SLP(C) NO. 6711/2009, SLP(C) NO. 6712/2009, SLP(C) NO. 6713/2009, SLP(C) NO. 6714-

6715/2009, SLP(C) NO. 6953/2009, SLP(C) NO. 7345/2009, SLP(C) NO. 8244/2009, SLP(C) NO. 9548/2009, SLP(C) NO. 9699/2009, SLP(C) NO. 10040/2009, SLP(C) NO. 10041/2009, SLP(C) NO. 10042/2009, SLP(C) NO. 10045/2009, SLP(C) NO. 10047/2009, SLP(C) NO. 10048/2009, SLP(C) NO. 10049/2009, SLP(C) NO. 10050/2009, SLP(C) NO. 10051/2009, SLP(C) NO. 10053-10054/2009, SLP(C) NO. 10192/2009, SLP(C) NO. 10279/2009, SLP(C) NO. 10952/2009, SLP(C) NO. 10954-10956/2009, SLP(C) NO. 11042/2009, SLP(C) NO. 11122/2009, SLP(C) NO. 11603-11611/2009, SLP(C) NO. 11646/2009, SLP(C) NO. 12948/2009, SLP(C) NO. 13270- 13274/2009, SLP(C) NO. 13483/2009, SLP(C) NO. 13496/2009, SLP(C) NO. 13517/2009, SLP(C) NO. 13611-13612/2009, SLP(C) NO. 14429/2009, SLP(C) NO. 14484/2009, SLP(C) NO. 14488/2009, SLP(C) NO. 14623/2009, SLP(C) NO. 14856/2009, SLP(C) NO. 14949/2009, SLP(C) NO. 15723/2009, SLP(C) NO. 16253/2009, SLP(C) NO. 16757-16760/2009, SLP(C) NO. 16784/2009, SLP(C) NO. 16789/2009, SLP(C) NO. 16888-16898/2009, SLP(C) NO. 17332-17333/2009, SLP(C) NO. 17394-17396/2009, SLP(C) NO. 17488/2009, SLP(C) NO. 17490/2009, SLP(C) NO. 17491/2009, SLP(C) NO. 17492-17498/2009, SLP(C) NO. 17722/2009, SLP(C) NO. 17731/2009, SLP(C) NO. 17744/2009, SLP(C) NO. 19695/2009, SLP(C) NO. 22293/2009, SLP(C) NO. 22295/2009, SLP(C) NO. 22302/2009, SLP(C) NO. 22303/2009, SLP(C) NO. 22304/2009, SLP(C) NO. 22306/2009, SLP(C) NO. 22307/2009, SLP(C) NO. 22308/2009, SLP(C) NO. 22309/2009, SLP(C) NO. 22310/2009, SLP(C) NO. 22311/2009, SLP(C) NO. 22312/2009, SLP(C) NO. 22313/2009, SLP(C) NO. 22316/2009, SLP(C) NO. 22317/2009, SLP(C) NO. 22318/2009, SLP(C) NO. 22320/2009, SLP(C) NO. 22321/2009, SLP(C) NO. 22322/2009, SLP(C) NO. 22323/2009, SLP(C) NO. 22324/2009, SLP(C) NO. 22325/2009, SLP(C) NO. 22408/2009, SLP(C) NO. 22425/2009, SLP(C) NO. 22428/2009, SLP(C) NO. 23990/2009, SLP(C) NO. 24149/2009, SLP(C) NO. 24430/2009, SLP(C) NO. 24822/2009, SLP(C) NO. 25157/2009, SLP(C) NO. 25390/2009, SLP(C) NO. 25399-25400/2009, SLP(C) NO. 25467/2009, SLP(C) NO. 25470/2009, SLP(C) NO. 25474/2009, SLP(C) NO. 25753/2009, SLP(C) NO. 25797/2009, SLP(C) NO. 26116/2009, SLP(C) NO. 26236/2009, SLP(C) NO. 26509/2009, SLP(C) NO. 27883/2009, SLP(C) NO. 28509/2009, SLP(C) NO. 28583/2009, SLP(C) NO. 28696/2009, SLP(C) NO. 28775/2009, SLP(C) NO. 29597/2009, SLP(C) NO. 29868/2009, SLP(C) NO. 30383/2009, SLP(C) NO. 30746-30845/2009, SLP(C) NO. 30847/2009, SLP(C) NO. 31410/2009,

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SLP(C) NO. 31411/2009, SLP(C) NO. 31412/2009, SLP(C) NO. 33176/2009, SLP(C) NO. 33663-33665/2009, SLP(C) NO. 33672/2009, SLP(C) NO. 34253/2009, SLP(C) NO. 34859/2009, SLP(C) NO. 35038/2009, SLP(C) NO. 35585/2009, SLP(C) NO. 35587/2009, SLP(C) NO. 35740/2009, SLP(C) NO. 35742/2009, SLP(C) NO. 35743-35746/2009, SLP(C) NO. 35747/2009, SLP(C) NO. 35749/2009, SLP(C) NO. 35750/2009, SLP(C) NO. 35751/2009, SLP(C) NO. 35752/2009, SLP(C) NO. 35753/2009, SLP(C) NO. 35754/2009, SLP(C) NO. 35755/2009, SLP(C) NO. 35756/2009, SLP(C) NO. 35757/2009, SLP(C) NO. 36193/2009, SLP(C) NO. 36196/2009, SLP(C) NO. 36219/2009, SLP(C) NO. 36271/2009, W.P.(C) NO. 11/2010, W.P.(C) NO. 42/2010, W.P.(C) NO. 43/2010, W.P.(C) NO. 44/2010, W.P.(C) NO. 46/2010, W.P.(C) NO. 48/2010, W.P.(C) NO. 63/2010, W.P.(C) NO. 71/2010, SLP(C) NO. 104/2010, SLP(C) NO. 245/2010, SLP(C) NO. 247/2010, SLP(C) NO. 248/2010, S.L.P.(C)… /2010 CC NO. 886, S.L.P.(C)… /2010 CC NO. 1082, SLP(C) NO. 1820/2010, SLP(C) NO. 1876/2010, SLP(C) NO. 2459/2010, SLP(C) NO. 3387/2010, SLP(C) NO. 4102/2010, SLP(C) NO. 4362/2010, SLP(C) NO. 4388/2010, SLP(C) NO. 4389/2010, SLP(C) NO. 4390/2010, SLP(C) NO. 4511/2010, SLP(C) NO. 4572/2010, SLP(C) NO. 4720/2010, SLP(C) NO. 5151/2010, SLP(C) NO. 5308/2010, SLP(C) NO. 5309/2010, C.A. NO. 5343-5344/2010, SLP(C) NO. 6037/2010, SLP(C) NO. 6723/2010, SLP(C) NO. 6762/2010, SLP(C) NO. 6763/2010, SLP(C) NO. 6765/2010, SLP(C) NO. 6770/2010, SLP(C) NO. 6811/2010, SLP(C) NO. 7356/2010, SLP(C) NO. 7426/2010, SLP(C) NO. 7776/2010, SLP(C) NO. 7929/2010, SLP(C) NO. 9022/2010, SLP(C) NO. 9077/2010, SLP(C) NO. 9702/2010, SLP(C) NO. 9723/2010, SLP(C) NO. 10361/2010, SLP(C) NO. 11419/2010, SLP(C) NO. 11423/2010, SLP(C) NO. 12690/2010, SLP(C) NO. 14845/2010, SLP(C) NO. 14886/2010, SLP(C) NO. 15015/2010, SLP(C) NO. 15903/2010, SLP(C) NO. 16694/2010, SLP(C) NO. 16720/2010, SLP(C) NO. 18318/2010, SLP(C) NO. 18834/2010, SLP(C) NO. 19194/2010, SLP(C) NO. 19199/2010, SLP(C) NO. 19217/2010, SLP(C) NO. 22327/2010, SLP(C) NO. 22520/2010, SLP(C) NO. 23836/2010, SLP(C) NO. 29578/2010, SLP(C) NO. 36486/2010, W.P.(C) NO. 31/2011, W.P.(C) NO. 497/2011, C.A. NO. 905/2011, SLP(C) NO. 1308/2011, C.A. NO. 2041/2011, C.A. NO. 2042/2011, S.L.P.(C)… /2011 CC NO. 2103, SLP(C) NO. 3433/2011, SLP(C) NO. 4730/2011, SLP(C) NO. 4743/2011, SLP(C) NO. 4747/2011, SLP(C) NO. 4750/2011, SLP(C) NO. 5094/2011, SLP(C) NO. 5105/2011, SLP(C) NO. 5106/2011, SLP(C) NO. 5110/2011, SLP(C) NO. 5112/2011, SLP(C) NO. 6351/2011, SLP(C) NO. 6492/2011, SLP(C) NO. 8571/2011, SLP(C) NO. 9758/2011, C.A. NO. 9900- 9903/2011, SLP(C) NO. 12605/2011, SLP(C) NO. 13451/2011, SLP(C) NO. 13525/2011, SLP(C) NO. 13526/2011, SLP(C) NO. 14144/2011, SLP(C) NO.

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14269/2011, SLP(C) NO. 14342/2011, SLP(C) NO. 18858/2011, SLP(C) NO. 18859/2011, SLP(C) NO. 18862/2011, SLP(C) NO. 18863/2011, SLP(C) NO. 18864/2011, SLP(C) NO. 33344/2011, W.P.(C) NO. 278/2012, W.P.(C) NO. 290/2012, C.A. NO. 4210/2012, C.A. NO. 5860/2012, C.A. NO. 5861/2012, C.A. NO. 8275/2012, C.A. NO. 8278/2012, C.A. NO. 8280/2012, C.A. NO. 8283/2012, C.A. NO. 8284/2012, C.A. NO. 8286/2012, C.A. NO. 8290/2012, C.A. NO. 8292/2012, C.A. NO. 8294/2012, C.A. NO. 8295/2012, C.A. NO. 8296/2012, C.A. NO. 8297/2012, C.A. NO. 8298/2012, C.A. NO. 8299/2012, C.A. NO. 8300/2012, C.A. NO. 8301/2012, C.A. NO. 8302/2012, C.A. NO. 8303/2012, C.A. NO. 8304/2012, C.A. NO. 8305/2012, C.A. NO. 8306/2012, C.A. NO. 8307/2012, C.A. NO. 8308/2012, C.A. NO. 8309/2012, C.A. NO. 8311/2012, C.A. NO. 8312/2012, C.A. NO. 8313/2012, C.A. NO. 8314/2012, C.A. NO. 8315/2012, C.A. NO. 8316/2012, SLP(C) NO. 8333/2012, C.A. NO. 8734/2012, C.A. NO. 8735/2012, C.A. NO. 8736/2012, C.A. NO. 8737/2012, C.A. NO. 8738/2012, C.A. NO. 8739/2012, C.A. NO. 8740/2012, C.A. NO. 8741/2012, C.A. NO. 8744/2012, C.A. NO. 8745/2012, C.A. NO. 8832/2012, C.A. NO. 8833/2012, C.A. NO. 8834/2012, C.A. NO. 8836/2012, C.A. NO. 8837/2012, C.A. NO. 8839/2012, C.A. NO. 8840/2012, C.A. NO. 8841/2012, C.A. NO. 8842/2012, C.A. NO. 8843/2012, C.A. NO. 8844/2012, C.A. NO. 8845/2012, C.A. NO. 8846/2012, C.A. NO. 9148/2012, C.A. NO. 9149/2012, C.A. NO. 9150/2012, C.A. NO. 9151/2012, C.A. NO. 9152/2012, C.A. NO. 9153/2012, C.A. NO. 9154/2012, C.A. NO. 9155/2012, C.A. NO. 9156/2012, C.A. NO. 9157/2012, C.A. NO. 9158/2012, C.A. NO. 9159/2012, C.A. NO. 9160/2012, C.A. NO. 9161/2012, C.A. NO. 9162/2012, C.A. NO. 9163/2012, C.A. NO. 9164/2012, C.A. NO. 9165/2012, C.A. NO. 9166/2012, C.A. NO. 9167/2012, C.A. NO. 9168/2012, C.A. NO. 9169/2012, C.A. NO. 9170/2012, C.A. NO. 9292/2012, C.A. NO. 9293/2012, SLP(C) NO. 16535-16536/2012, SLP(C) NO. 16538/2012, SLP(C) NO. 18602/2012, SLP(C) NO. 28173/2012, SLP(C) NO. 33954/2012, SLP(C) NO. 36187/2012, SLP(C) NO. 37455/2012, SLP(C) NO. 37680/2012, SLP(C) NO. 37708-37709/2012, SLP(C) NO. 37712/2012, SLP(C) NO. 37728/2012, SLP(C) NO. 38304/2012, SLP(C) NO. 38919/2012, SLP(C) NO. 39998/2012, SLP(C) NO. 40146/2012, SLP(C) NO. 40147/2012, T.C.(C) NO. 149/2013, SLP(C) NO. 449/2013, C.A. NO. 539/2013, C.A. NO. 540/2013, C.A. NO. 541/2013, C.A. NO. 542/2013, C.A. NO. 543/2013, C.A. NO. 544/2013, C.A. NO. 545/2013, C.A. NO. 546/2013, C.A. NO. 547/2013, C.A. NO. 548/2013, SLP(C) NO. 1426/2013, SLP(C) NO. 8939/2013, SLP(C) NO.

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9844/2013, SLP(C) NO. 10466/2013, SLP(C) NO. 10516/2013, SLP(C) NO. 10879/2013, SLP(C) NO. 11060/2013, SLP(C) NO. 16744-16746/2013, SLP(C) NO. 16867/2013, SLP(C) NO. 16869/2013, SLP(C) NO. 16870/2013, SLP(C) NO. 27001-27002/2013, SLP(C) NO. 30986/2013, SLP(C) NO. 32256/2013, SLP(C) NO. 33600/2013, C.A. NO. 1838/2014, C.A. NO. 9216/2014, C.A. NO. 9214/2014, SLP(C) NO. 29119/2014, SLP(C) NO. 208/2015, SLP(C) NO. 212/2015, SLP(C) NO. 315-317/2015, SLP(C) NO. 320/2015, SLP(C) NO. 336/2015, SLP(C) NO. 352/2015, SLP(C) NO. 376/2015, SLP(C) NO. 411-421/2015, SLP(C) NO. 380/2015, SLP(C) NO. 437/2015, SLP(C) NO. 445/2015, SLP(C) NO. 457/2015, SLP(C) NO. 508/2015, SLP(C) NO. 510/2015, SLP(C) NO. 567/2015, SLP(C) NO. 561- 562/2015, SLP(C) NO. 585/2015, SLP(C) NO. 621/2015, SLP(C) NO. 638/2015, SLP(C) NO. 641/2015, SLP(C) NO. 661/2015, SLP(C) NO. 664/2015, SLP(C) NO. 662/2015, SLP(C) NO. 669/2015, SLP(C) NO. 668/2015, SLP(C) NO. 671/2015, SLP(C) NO. 672/2015, SLP(C) NO. 675/2015, SLP(C) NO. 674/2015, SLP(C) NO. 683/2015, SLP(C) NO. 690- 691/2015, SLP(C) NO. 684-686/2015, SLP(C) NO. 693-694/2015, SLP(C) NO. 712/2015, SLP(C) NO. 1270/2015, SLP(C) NO. 1424/2015, SLP(C) NO. 1596/2015, SLP(C) NO. 1631/2015, SLP(C) NO. 1714/2015, SLP(C) NO. 1851-1852/2015, SLP(C) NO. 1943-2001/2015, SLP(C) NO. 2038/2015, SLP(C) NO. 2054/2015, SLP(C) NO. 2063-2065/2015, SLP(C) NO. 2081/2015, SLP(C) NO. 91/2015, SLP(C) NO. 4557/2015, SLP(C) NO. 4581/2015, SLP(C) NO. 4657/2015, SLP(C) NO. 5046/2015, SLP(C) NO. 5107/2015, SLP(C) NO. 5131/2015, SLP(C) NO. 5143/2015, SLP(C) NO. 5375/2015, SLP(C) NO. 5447/2015, SLP(C) NO. 5610/2015, SLP(C) NO. 5966/2015, SLP(C) NO. 6086/2015, SLP(C) NO. 6143/2015, SLP(C) NO. 6158/2015, SLP(C) NO. 6240-6243/2015, SLP(C) NO. 6565/2015, SLP(C) NO. 6575/2015, SLP(C) NO. 6631/2015, SLP(C) NO. 4600/2015, SLP(C) NO. 5007/2015, SLP(C) NO. 6728/2015, SLP(C) NO. 6754-6755/2015, SLP(C) NO. 6823/2015, SLP(C) NO. 6907/2015, SLP(C) NO. 6909-6910/2015, SLP(C) NO. 6939/2015, SLP(C) NO. 6956/2015, SLP(C) NO. 4386/2015, SLP(C) NO. 7319/2015, SLP(C) NO. 7957-7958/2015, SLP(C) NO. 8089/2015, SLP(C) NO. 2483/2015, SLP(C) NO. 8248/2015, SLP(C) NO. 8325/2015, SLP(C) NO. 8350-8351/2015, SLP(C) NO. 8527/2015, SLP(C) NO. 9585/2015, SLP(C) NO. 11830/2015, SLP(C) NO. 8798/2015, SLP(C) NO. 9584/2015, SLP(C) NO. 5311-5329/2015, SLP(C) NO. 11204- 11205/2015, SLP(C) NO. 9164/2015, SLP(C) NO. 9167/2015, SLP(C) NO. 9176/2015, SLP(C) NO. 9181/2015, SLP(C) NO. 11832/2015, SLP(C) NO. 9188/2015, SLP(C) NO. 9348/2015, SLP(C) NO. 5908/2015, SLP(C) NO. 9386/2015, SLP(C) NO. 9484/2015, SLP(C) NO. 9582/2015, SLP(C) NO.

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7874/2015, SLP(C) NO. 11080-11086/2015, SLP(C) NO. 12839/2015, SLP(C) NO. 11156/2015, SLP(C) NO. 11170/2015, SLP(C) NO. 12844/2015, SLP(C) NO. 8162/2015, SLP(C) NO. 11484/2015, SLP(C) NO. 12847/2015, SLP(C) NO. 11582/2015, SLP(C) NO. 11592/2015, SLP(C) NO. 13200/2015, SLP(C) NO. 13201/2015, SLP(C) NO. 4219-4227/2015, SLP(C) NO. 2966-

2999/2015, SLP(C) NO. 11888/2015, SLP(C) NO. 11203/2015, SLP(C) NO. 14828/2015, SLP(C) NO. 14854/2015, SLP(C) NO. 15856/2015, SLP(C) NO. 15857/2015, SLP(C) NO. 15858/2015, SLP(C) NO. 11458-11465/2015, SLP(C) NO. 18213/2015, SLP(C) NO. 18333/2015, SLP(C) NO. 16312/2015, SLP(C) NO. 18334/2015, SLP(C) NO. 18335/2015, SLP(C) NO. 15855/2015, SLP(C) NO. 18338/2015, SLP(C) NO. 18184/2015, SLP(C) NO. 18179/2015, C.A. NO. 1956/2003, SLP(C) NO. 8775-8777/2015, SLP(C) NO. 5303/2015, SLP(C) NO. 16853/2015, SLP(C) NO. 21720/2015, SLP(C) NO. 23673- 23674/2015, SLP(C) NO. 23764/2015, SLP(C) NO. 23765/2015, SLP(C) NO. 15353/2015, SLP(C) NO. 22349/2015, SLP(C) NO. 21718/2015, SLP(C) NO. 24547/2015, SLP(C) NO. 23757/2015, C.A. NO. 8240/2015, SLP(C) NO. 26751/2015, SLP(C) NO. 9117/2015, SLP(C) NO. 2214/2015, SLP(C) NO. 2531/2015, SLP(C) NO. 2289/2015, SLP(C) NO. 2530/2015, SLP(C) NO. 2392/2015, SLP(C) NO. 2499/2015, SLP(C) NO. 2502/2015, SLP(C) NO. 2538-2543/2015, SLP(C) NO. 2426/2015, SLP(C) NO. 2358/2015, SLP(C) NO. 2401/2015, SLP(C) NO. 2389/2015, SLP(C) NO. 2485/2015, SLP(C) NO. 2495/2015, SLP(C) NO. 3163-3164/2015, SLP(C) NO. 3666/2015, SLP(C) NO. 3679/2015, SLP(C) NO. 3723/2015, SLP(C) NO. 3321/2015, SLP(C) NO. 4198-4199/2015, SLP(C) NO. 3325/2015, SLP(C) NO. 3466/2015, SLP(C) NO. 3635/2015, SLP(C) NO. 3318/2015, SLP(C) NO. 30396/2015, C.A. NO. 110/2016, C.A. NO. 109/2016, C.A. NO. 583/2016, SLP(C) NO. 4945/2016, SLP(C) NO. 8253/2016, SLP(C) NO. 8204/2008, C.A. NO. 3925/2016, SLP(C) NO. 2057/2016, SLP(C) NO. 86/2016, SLP(C) NO. 72/2016, C.A. NO. 5534/2016, C.A. NO. 5536/2016, C.A. NO. 5137/2016, SLP(C) NO. 33923/2012, C.A. NO. 5537/2016, SLP(C) NO. 16116/2009, SLP(C) NO. 30594/2009, SLP(C) NO. 2636/2015, SLP(C) NO. 2680/2015, SLP(C) NO. 2952/2015, SLP(C) NO. 2641/2015, SLP(C) NO. 2588/2015, SLP(C) NO. 2928/2015, SLP(C) NO. 2737/2015, SLP(C) NO. 2682/2015, SLP(C) NO. 8197-8198/2015, SLP(C) NO. 4197/2015, C.A. NO. 5538/2016, C.A. NO. 5533/2016, SLP(C) NO. 14539-14541/2016, SLP(C) NO. 16820/2016, C.A. NO. 4642-4643/2016

J U D G M E N T

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T.S. THAKUR, CJI (for himself and A.K. Sikri and A.M. Khanwilkar, JJ.) 1. These appeals bring to fore for our determination vexed questions touching the interpretation of Articles 301 to 307 comprising Part XIII of the Constitution which have been the subject matter of several Constitution Bench decisions of this Court, all but one, decided by majority. The questions assume in a great measure considerable public importance not only because the same deal with the powers of the State legislatures to levy taxes but also because any pronouncement of this Court is bound to impact the federal character of our polity and the Centre-State relationship in legislative and fiscal matters. There is no gainsaying that it is the importance of the questions that lies at the bottom of the present reference to a larger Bench made in the following circumstances.

In exercise of their legislative powers under Entry 52 of List II of the Seventh Schedule to the Constitution several States in the country, at least 14 of whom are parties to these proceedings, have enacted laws that provide for levy of a tax on the “entry of goods into local areas comprising the States”. The constitutional validity of these levies was questioned in different High Courts by assesses/dealers aggrieved of the same, inter alia, on the ground that the same were violative of the constitutionally recognised right to free trade commerce and intercourse guaranteed under Article 301 of the Constitution of India. The levies were also assailed on the ground that the same were discriminatory and, therefore, violative of Article 304(a) of the Constitution of India. Absence of Presidential sanction in terms of Article 304(b) of the Constitution of India was also set-up as a ground of challenge to the levies imposed by the respective State legislatures. Writ Petition

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(Civil) No. 8700 of 2000 filed before the High Court of Punjab and Haryana was one such petition that assailed the constitutional validity of the Haryana Local Development Act, 2000. Relying upon the decisions of this Court in Atiabari Tea Co. Ltd. v. State of Assam & Ors. (AIR 1961 SC 232); Automobile Transport (Rajasthan) Ltd. etc. v. State of Rajasthan & Ors. (AIR 1962 SC 1406); M/s. Bhagatram Rajeev Kumar v. Commissioner of Sales Tax, M.P. and Ors. (1995 Supp [1] SCC 673 ); and State of Bihar and Ors. v. Bihar Chamber of Commerce and Ors. (1996) 9 SCC 136, a Division Bench of the High Court of Punjab and Haryana dismissed the said petition and connected matters on the ground that the levy was compensatory in character hence outside the purview of Article 301.

The correctness of the said order was assailed before this Court in Jindal Stripe Ltd. and Anr. v. State of Haryana and Ors. (2003) 8 SCC 60. A two-Judge Bench of this Court, however, referred the matter to a larger Bench as it noticed an apparent conflict between the pronouncements of this Court in Atiabari (supra) and Automobile Transport (supra) cases on the one hand and Bhagatram (supra) and Bihar Chamber of Commerce (supra) on the other. The Court after noticing the development of law on the subject observed:

“25. To sum up: the pre-1995 decisions held that an exaction to reimburse/recompense the State the cost of an existing facility made available to the traders or the cost of a specific facility planned to be provided to the traders is compensatory tax and that it is implicit in such a levy that it must, more or less, be commensurate with the cost of the service or facility. The decisions emphasized that the imposition of tax must be with the definite purpose of meeting the expenses on account of providing or adding to the trading facilities either immediately or in future provided the quantum of tax sought to be generated is

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based on a reasonable relation to the actual or projected expenditure on the cost of the service or facility.

The decisions in Bhagatram and Bihar Chamber of Commerce now say that even if the purpose of imposition of the tax is not merely to confer a special advantage on the traders but to benefit the public in general including the traders, that levy can still be considered to be compensatory. According to this view, an indirect or incidental benefit to traders by reason of stepping up the developmental activities in various local areas of the State can be legitimately brought within the concept of compensatory tax, the nexus between the tax known as compensatory tax and the trading facilities not being necessarily either direct or specific.
Since the concept of compensatory tax has been judicially evolved as an exception to the provisions of Article 301 and as the parameters of this judicial concept are blurred, particularly by reason of the decisions in Bhagatram and Bihar Chamber of Commerce we are of the view that the interpretation of Article 301 vis-à-vis compensatory tax should be authoritatively laid down with certitude by the Constitution Bench under Article 145(3).
In the circumstances let all these matters be placed

before the Hon’ble the Chief Justice for appropriate

directions.”

The matters were, pursuant to the above, placed before a Constitution Bench of this Court in Jindal Stainless Ltd. (2) and Anr. v. State of Haryana and Ors., (2006) 7 SCC 241 which resolved the conflict noticed in the reference order by holding that the working test propounded by seven Judges in Automobile Transport case (supra) was incompatible with the test of ‘some connection’ enunciated by the three Judge Bench in Bhagatram’s case (supra). The Court held that the test of ‘some connection’ as propounded in Bhagatram’s case (supra) had no application to the

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concept of compensatory tax. The Court, accordingly, overruled the decisions rendered in Bhagatram and Bihar Chamber of Commerce cases and held that the doctrine of ‘direct and immediate effect’ of the impugned law on trade and commerce under Article 301 as propounded in Atiabari (supra) and the working test

enunciated in Automobile Transport (supra) cases for deciding whether a tax is compensatory or not will continue to apply. The Court observed:

“53. We reiterate that the doctrine of “direct and immediate effect” of the impugned law on trade and commerce under Article 301 as propounded in Atiabari Tea Co. Ltd. v. State of Assam and the working test enunciated in Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan for deciding whether a tax is compensatory or not vide para 19 of the Report (AIR), will continue to apply and the test of “some connection” indicated in para 8 (of SCC) of the judgment in Bhagatram Rajeevkumar v. CST and followed in State of Bihar v. Bihar Chamber of Commerce is, in our opinion, not good law. Accordingly, the constitutional validity of various local enactments which are the subject-matters of pending appeals, special leave petitions and writ petitions will now be listed for being disposed of in the light of this judgment.”

The matters were, in terms of the above direction, listed before a two-Judge bench for hearing of the appeals in the light of the above pronouncement of the Constitution Bench. The two-Judge Bench, however, noticed that although the basic issue in the appeals revolved around the concept of compensatory tax, the High Courts had not examined the same as they had considered themselves bound by the view taken in Bhagatram and Bihar Chamber of Commerce cases (supra). The Court further found that in the absence of relevant data before the High Courts, the issue whether the levies were compensatory could not have been

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considered and accordingly referred the matter back to the High Courts to decide the said aspect. The appeals were, in the meantime, adjourned to await the finding from the High Courts on the question whether the levies were indeed compensatory in nature having regard to the decisions of this Court in Atiabari and Automobile Transport cases (supra).

The matters were accordingly taken up by the High Courts, after the remand, who came to the conclusion that the impugned levies were neither compensatory in character nor was the procedure stipulated by Article 304(b) and the proviso to the same followed. The levies were on that basis held to be in violation of Article 301 being an impediment to free trade, commerce and intercourse and accordingly struck down. The High Courts of Assam, Arunachal Pradesh, Jharkhand, Kerala and Tamil Nadu struck down the levies imposed by their respective States also on the ground that they were discriminatory in nature hence violative of Article 304(a) of the Constitution.
All these judgments and orders of the High Courts, passed after the remand, then, came to be challenged by the States concerned in the appeals filed against the same. These appeals initially came-up before a two-Judge Bench of this Court comprising Justice Arijit Pasayat and Justice S.H. Kapadia. Their Lordships referred the same to a Constitution Bench for an authoritative pronouncement on as many as ten questions formulated in the reference order (Jaiprakash Associates Limited v. State of Madhya Pradesh and Ors. (2009) 7 SCC 339). The Court noticed the arguments advanced on behalf of the assessees that entry taxes were, in essence and in the classical sense, in the nature of ‘a fee’ and not ‘a tax’. It also noted the 28

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contention that all the cases on which the parties had placed reliance related to entry tax in the context of tax on vehicles in contradiction to taxes on entry of goods. The Court was of the view that while the Constitution Bench in Jindal Stainless Ltd. (2) (supra) had dealt with some aspects of the matter, certain other important constitutional issues remained to be examined especially because a conceptually and contextually different approach may be required vis-à-vis

“transport cases” on the one hand and cases of “entry tax on goods” on the other. The questions formulated by the Court for determination by the Constitution Bench were in the following words:

“(1) Whether the State enactments relating to levy of entry tax have to be tested with reference to both clauses (a) and (b) of Article 304 of the Constitution for determining their validity and whether clause (a) of Article 304 is conjunctive with or separate from clause (b) of Article 304?

(2) Whether imposition of entry tax levied in terms of Entry 52 List II of the Schedule VII is violative of Article 301 of the Constitution? If the answer is in the affirmative whether such levy can be protected if entry tax is compensatory in character and if the answer to the aforesaid question is in the affirmative what are the yardsticks to be applied to determine the compensatory character of the entry tax?

(3) Whether Entry 52 List II, Schedule VII of the Constitution like other taxing entries in the Schedule, merely provides a taxing field for exercising the power to levy and whether collection of entry tax which ordinarily would be credited to the Consolidated Fund of the State being a revenue received by the Government of the State and would have to be appropriated in accordance with law and for the purposes and in the manner provided in the Constitution as per Article 266 and there is nothing express or explicit in Entry 52 List II, Schedule VII which would compel the State to spend the tax collected within the local area in which it

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was collected?

(4) Will the principles of quid pro quo relevant to a fee apply in the matter of taxes imposed under Part XIII?

(5) Whether the entry tax may be levied at all where the goods meant for being sold, used or consumed come to rest (standstill) after the movement of the goods ceases in the “local area”?

(6) Whether the entry tax can be termed a tax on the movement of goods when there is no bar to the entry of goods at the State border or when it passes through a local area within which they are not sold, used or consumed?

(7) Whether interpretation of Articles 301 to 304 in the context of tax on vehicles (commonly known as

“transport”) cases in Atiabari case and Automobile

Transport case apply to entry tax cases and if so, to what

extent?

(8) Whether the non-discriminatory indirect State tax which is capable of being passed on and has been passed on by traders to the consumers infringes Article 301 of the

Constitution?

(9) Whether a tax on goods within the State which directly impedes the trade and thus violates Article 301 of the

Constitution can be saved by reference to Article 304 of

the Constitution alone or can be saved by any other

article?

(10) Whether a levy under Entry 52 List II, even if held to be in nature of a compensatory levy, must, on the principle of equivalence demonstrate that the value of the

quantifiable benefit is represented by the costs incurred in procuring the facility/services (which costs in turn become the basis of reimbursement/recompense for the provider of the services/facilities) to be provided in the “local area”

concerned and whether the entire State or a part thereof

can be comprehended as local area for the purpose of

entry tax?”

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The matter was accordingly placed before a five-Judge Bench of this Court (Jindal Stainless Limited and Anr. v. State of Haryana and Ors. (2010) 4 SCC 595) who briefly referred to the decisions in Atiabari, Automobile Transport cases (supra) and Keshav Mills Co. Ltd. v. CIT (AIR 1965 SC 1636) and a few others and referred the matters to a larger Bench for reconsideration of the judgment of this Court in Atiabari and Automobile Transport (supra). The Court noted that the correctness of the view taken in the said two cases had been doubted as early as in the year 1975 in G.K. Krishnan v. State of Tamil Nadu (1975) 1 SCC 375. The reference order briefly set out some of the questions that required consideration by a larger Bench. The Court said:

“11. Some of these aspects which need consideration by a larger Bench of this Court may be briefly enumerated. Interplay/interrelationship between Article 304(a) and Article 304(b). The significance of the word “and”

between Articles 304(a) and 304(b). The significance of the non obstante clause in Article 304. The balancing of freedom of trade and commerce in Article 301 vis-a-vis the States’ authority to levy taxes under Articles 245 and 246 of the Constitution read with the appropriate legislative entries in the Seventh Schedule, particularly in the context of movement of trade and commerce.

Whether Article 304(a) and Article 304(b) deal with different subjects? Whether the impugned taxation law to be valid under Article 304 (a) must also fulfil the conditions mentioned in Article 304(b), including Presidential assent? Whether the word “restrictions” in Article 302 and in Article 304(b) includes tax laws? Whether validity of a law impugned as violative of Article 301 should be judged only in the light of the test of non-discrimination? Does Article 303 circumscribe Article 301? Whether “internal goods” would come under Article 304(b) and “external goods” under Article 304(a)? Whether “per se test” propounded in Atiabari case should or should not be rejected? Whether tax simpliciter constitutes a restriction under Part XIII of the

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Constitution? Whether the word “restriction” in Article 304(b) includes tax laws? Is taxation justiciable? Whether the “working test” laid down in Atiabari makes a tax law per se violative of Article 301? Interrelationship between Article 19(1)(g) and Article 301 of the Constitution? These are some of the questions which warrant reconsideration of the judgments in Atiabari Tea Co. Ltd. and Automobile Transport (Rajasthan) Ltd. by a larger Bench of this Court.”

At the hearing before us learned counsel for the parties agreed after a day – long exploratory exercise that the questions that fall for determination by this Court could be re-framed as under:
Can the levy of a non-discriminatory tax per se constitute infraction of Article 301 of the Constitution of India?
If answer to question No. 1 is in the affirmative, can a tax which is compensatory in nature also fall foul of Article 301 of the Constitution of India?
What are the tests for determining whether the tax or levy is compensatory in nature?
Is the Entry Tax levied by the States in the present batch of cases violative of Article 301 of the Constitution and in particular have the impugned State enactments relating to entry tax to be tested with reference to both Articles 304(a) and 304(b) of the Constitution for determining their validity?
We have heard learned counsel for the parties at considerable length on the above questions which we shall now take up for discussion ad-seriatim.

Re: Question No. 1

Whether non-discriminatory fiscal measures also impede free trade, commerce and intercourse and thereby fall foul of Article 301 of the Constitution

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can be answered only if one keeps in view the Constitutional scheme underlying separation of powers in a federal system of governance like the one chosen by us. The answer would also depend upon the way we look at, understand and interpret the provisions of the Constitution and in particular the provisions of Parts XI, XII and XIII thereof. Interpretation of these and indeed every other provision must have due regard to what are recognised as the basic features of the Constitution. In doing so, the approach of the Courts can neither be rigid nor wooden or pedantic. Being a living and dynamic document, the Constitution ought to receive an equally dynamic and pragmatic interpretation that harmonizes and balances competing aims and objectives and promotes attainment of national goals and objectives. It must, as observed by this Court, in Kihoto Hollohan v. Zachillhu (1992) Supp 2 SCC 651 be read as a logical whole. The Constitutional provisions cannot be read in isolation, nor can they be interpreted in a manner that renders another provision redundant declared this Court in T.M.A. Pai Foundation and others v. State of Karnataka (2002) 8 SCC 481. If words used in the provision are imprecise, protean or evocative or can reasonably bear meaning more than one, it would be legitimate for the Court to go beyond the literal confines of the provision and to call in aid other well recognised rules of construction such as legislative history, the basic scheme and framework of the statute as a whole, the object sought to be achieved and the consequence flowing from the adoption of one in preference to the other possible interpretation observed this Court in Chief Justice of Andhra Pradesh and others. v. L.V. A. Dixitulu and others (1979) 2 SCC 34. Reference may also be made to the decision of this Court in Kesavananda Bharati v. State of Kerala (1973) 4 SCC 225 where this Court quoted with approval Lord Greene’s33

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observations in the following words:

“56. ……It is not right to construe words in vacuum and

then insert the meaning into an article. Lord Green

observed in Bidie v. General Accident, Fire and Life

Assurance Corporation [1948] 2 All E.R. 995:

The first thing one has to do, I venture to think, in construing words in a section of an Act of Parliament is not to take those words in vacuo, so to speak, and attribute to them what is sometimes called their natural or ordinary meaning. Few words in the English language have a natural or ordinary meaning in the sense that they must be so read that their meaning is entirely independent of their context. The method of construing statutes that I prefer is not to take particular words and attribute to them a sort of prima facie meaning which you may have to displace or modify. It is to read the statute as a whole and ask oneself the question: ‘In this state, in this context, relating to this subject-matter, what is the true meaning of that word.

I respectfully adopt the reasoning of Lord Green in

construing the expression “the amendment of the

Constitution….

xxxxxxxx

I may also refer to the observation of Gwyer, C.J., and

Lord Wright:

“A grant of the power in general terms, standing by

itself, would no doubt be construed in the wider sense; but it may be qualified by other express provisions in the same enactment, by the implications of the context, and even by considerations arising out of what appears to be the general scheme of the Act.” (Per Gwyer, C.J. — The Central Provinces and Berar Act, 1939, FCR 18 at 42 MR).

“The question, then, is one of construction and in the

ultimate resort must be determined upon the actual words used, read not in vacua but as occurring in a single

complex instrument, in which one part may throw light on

another. The Constitution has been described as the

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federal compact, and the Construction must hold a

balance between all its parts.” (Per Lord Wright — James v. Commonwealth of Australia, 1936 AC 578 at 613.)”

It is trite that a narrow interpretation that may have the potential or tendency to subvert the delicate balance which the framers of the Constitution had in mind while distributing legislative businesses including the sovereign power to levy taxes must be avoided and a construction that is most beneficial for a harmonious relationship between different limbs of the State including that between the Centre and the States or States inter se adopted. This may, at times, involve ironing out of rough edges which exercise a Constitutional Court must necessarily undertake to avoid confusion and resultant negation of the Constitutional objectives.
Having said so, we must sail smooth on certain fundamentals before we address the question whether levy of taxes per se operate as an impediment or restriction on the right to free trade, commerce and intercourse. That is because a true and correct answer to Question No.1 can be found only if we constantly keep those fundamentals in mind while attempting to resolve what has been found to be somewhat difficult to resolve. For instance, whether levy of a tax is an attribute of sovereignty and if so whether Article 246 of the Constitution recognises the sovereign power of the State to make laws including the power to levy taxes on subjects enumerated in List II of the Seventh Schedule of the Constitution is an important dimension that must be addressed as a part of the interpretative exercise. So also, we must examine whether power to tax if held to be subservient to Article 301, shall have the effect of denuding the States of their sovereignty in the

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matter of levy of taxes and in the process affect the federal structure of the polity envisaged by the Constitution. If levy of taxes is always presumed to be reasonable and in public interest, whether such levies could be said to be within the contemplation of Article 304(b) when it provided for imposition of “reasonable restrictions in public interest” is yet another aspect that must be explored especially when the reasonableness of any restriction within the comprehension of Article 304(b) is not free from judicial scrutiny by Courts. These are some of the broad and fundamental issues that need to be examined before we attempt to answer the question whether levy of taxes per se acts as an impediment for free trade, commerce and intercourse. We may now briefly refer to these fundamentals before adverting to the provisions of Part XIII that fall for our interpretation.

Power to Tax : an Attribute of sovereignty

Power to levy taxes has been universally acknowledged as an essential attribute of sovereignty. Cooley in his Book on Taxation – Volume-1 (4th Edn.) in Chapter-2 recognises the power of taxation to be inherent in a sovereign State. The power, says the author, is inherent in the people and is meant to recover a contribution of money or other property in accordance with some reasonable rule or apportionment for the purpose of defraying public expenses. The following passage from the book is apposite:

“57. Power to tax as an inherent attribute of sovereignty.

The power of taxation is an essential and inherent attribute of sovereignty, belonging as a matter of right to every independent government. It is possessed by the government without being expressly conferred by the

people. The power is inherent in the people because the sustenance of the government requires contributions from

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them. In fact the power of taxation may be defined as “the power inherent in the sovereign state to recover a contribution of money or other property, in accordance with some reasonable rule or apportionment, from the property or occupations within its jurisdiction for the purpose of defraying the public expenses.” Constitutional provisions relating to the power of taxation do not operate as grants of the power of taxation to the government but instead merely constitute limitations upon a power which would otherwise be practically without limit. This inherent power to tax extends to everything over which the sovereign power extends, but not to anything beyond its sovereign power. Even the federal government’s power of taxation does not include things beyond its sovereign power. But where exclusive jurisdiction over land is granted to another state or country, the land remains subject to the taxing power of the state within whose boundaries it is located.”

To the same effect is the decision of this Court in Raja Jagannath Baksh Singh v. State of U.P. & Anr. (AIR 1962 SC 1563) where this Court observed: “…. The power of taxation is, no doubt, the sovereign right of the State; as was observed by Chief Justice Marshall in M’Culloch v. Maryland [4 Law Edn.579 p.607] : “The power of taxing the people and their property is essential to the very existence of Government, and may be legitimately exercised on the objects to which it is applicable to the utmost extent to which the Government may choose to carry it.” In that sense, it is not the function of the court to enquire whether the power of taxation has been reasonably exercised either in respect of the amount taxed or in respect of the property which is made the object of the tax. Article 265 of the Constitution provides that no tax shall be levied or collected, except by authority of law; and so, for deciding whether a tax has been validly levied or not, it would be necessary first to enquire whether the legislature which passes the Act was competent to pass it or not.”

(Emphasis supplied)

Reference may also be made to Dena Bank v. Bhikhabhai Prabhudas Parekh & Co. (2000) 5 SCC 694 where this Court held:

“8. The principle of priority of government debts is founded 37

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on the rule of necessity and of public policy. The basic justification for the claim for priority of State debts rests on the well-recognised principle that the State is entitled to raise money by taxation because unless adequate revenue is received by the State, it would not be able to function as a sovereign Government at all. It is essential that as a sovereign, the State should be able to discharge its primary governmental functions and in order to be able to discharge such functions efficiently, it must be in possession of necessary funds and this consideration emphasises the necessity and the wisdom of conceding to the State, the right to claim priority in respect of its tax dues (see Builders Supply Corpn.[AIR 1965 SC 1061: (1965) 56 ITR 91])”

(Emphasis supplied)

In Commissioner of Income Tax, Udiapur, Rajasthan v. MCdowell and Co. Ltd. (2009) 10 SCC 755 where this Court reiterated the legal position in the following words:

“21. “Tax”, “duty”, “cess” or “fee” constituting a class denotes to various kinds of imposts by State in its sovereign power of taxation to raise revenue for the State. Within the expression of each specie each expression denotes different kind of impost depending on the purpose for which they are levied. This power can be exercised in any of its manifestation only under any law authorising levy and collection of tax as envisaged under Article 265 which uses only the expression that no “tax” shall be levied and collected except authorised by law. It in its elementary meaning conveys that to support a tax legislative action is essential, it cannot be levied and collected in the absence of any legislative sanction by exercise of executive power of State under Article 73 by the Union or Article 162 by the State.

Under Article 366(28) “Taxation” has been defined to include the imposition of any tax or impost whether general or local or special and tax shall be construed accordingly. “Impost” means compulsory levy. The well known and well-settled characteristic of “tax” in its wider sense includes all imposts. Imposts in the context have

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following characteristics:

(i) The power to tax is an incident of sovereignty.

(ii) “Law” in the context of Article 265 means an Act of legislature and cannot comprise an executive order or rule without express statutory authority.

(iii) The term “tax” under Article 265 read with Article

366(28) includes imposts of every kind viz. tax, duty, cess or fees.

(iv) As an incident of sovereignty and in the nature of

compulsory exaction, a liability founded on principle of

contract cannot be a “tax” in its technical sense as an

impost, general, local or special. “

(Emphasis Supplied)

Power of Taxation under the Constitution:

We shall presently turn to the Constitutional limitations on the sovereign power to tax but before we do so we need to point out that while the power to levy taxes is an attribute of sovereignty, exercise of that power is controlled by the Constitution. This is evident from the provisions of Article 265 which forbids levy or recovery of any tax except by the authority of law. It reads:

“265. Taxes not to be imposed save by authority of law –

No tax shall be levied or collected except by authority of

law.”

The authority of law referred to above must be traceable to a provision in the Constitution especially where the legislative powers are shared by the Centre and the States as is the case with our Constitution which provides for what has been described as quasi federal system of governance.

The source of power to enact laws is contained in Articles 245 and 246 of the Constitution which read:

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“245. Extent of laws made by Parliament and by the Legislatures of States – (1) Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State.

(2) No law made by Parliament shall be deemed to be

invalid on the ground that it would have extra-territorial

operation.

Subject-matter of laws made by Parliament and by the Legislatures of States – (1) Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the “Union List”).

(2) Notwithstanding anything in clause (3), Parliament and , subject to clause (1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the “Concurrent List”).

(3) Subject to clauses (1) and (2), the Legislature of any

State has exclusive power to make laws for such State or

any part thereof with respect to any of the matters

enumerated in List II in the Seventh Schedule (in this

Constitution referred to as the ‘State List’).

(4)Parliament has power to make laws with respect to any matter for any part of the territory of India not included [in a State] notwithstanding that such matter is a matter

enumerated in the State List.”

Interpreting Articles 245 and 246, a three-Judge Bench of this Court in M/s. Hoechst Pharmaceuticals Ltd and Ors. v. State of Bihar and Ors. (1983) 4 SCC 45, held on a review of the available decisions that the Constitution effects a complete separation of taxing powers of the Union and the States under Article 246 and that there is no overlapping anywhere in the exercise of that power. The sources of 40

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taxation are clearly delineated, observed the Court. The Court also held that there is a distinction between general subjects of legislation and taxation for the former are dealt within one group while the later is dealt with in a separate group. The result is that the power to tax cannot be deduced from a general legislative entry. That view was approved by a Constitution Bench of this Court in State of West Bengal v. Kesoram Industries Ltd. (2004) 10 SCC 201. The propositions stated in the two decisions must therefore be treated to be fairly well settled. Reference may also be made to the decision of this Court in State of Kerala and ors. v. Mar Appraem Kuri Co. Ltd. and Anr. (2012) 7 SCC 106 where this Court explained the sweep and purport of Articles 245 and 246:

“35. Article 245 deals with extent of laws made by Parliament and by the legislatures of States. The verb “made”, in past tense, finds place in the Head Note to Article 245. The verb “make”, in the present tense, exists in Article 245(1) whereas the verb “made”, in the past tense, finds place in Article 245(2). While the legislative power is derived from Article 245, the entries in the Seventh Schedule of the Constitution only demarcate the legislative fields of the respective legislatures and do not confer legislative power as such. While Parliament has power to make laws for the whole or any part of the territory of India, the legislature of a State can make laws only for the State or part thereof. Thus, Article 245 inter alia indicates the extent of laws made by Parliament and by the State Legislatures.

Article 246 deals with the subject-matter of laws made by Parliament and by the legislatures of States. The verb “made” once again finds place in the Head Note to Article 246. This article deals with distribution of legislative powers

as between the Union and the State Legislatures, with reference to the different Lists in the Seventh Schedule. In short, Parliament has full and exclusive powers to legislate with respect to matters in List I and has also power to legislate with respect to matters in List III, whereas the State

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Legislatures, on the other hand, have exclusive power to legislate with respect to matters in List II, minus matters falling in List I and List III and have concurrent power with respect to matters in List III. (See Subrahmanyan Chettiar v. Muttuswami Goundan)

Article 246, thus, provides for distribution, as between Union and the States, of the legislative powers which are conferred by Article 245. Article 245 begins with the expression “subject to the provisions of this Constitution”. Therefore, Article 246 must be read as “subject to other provisions of the Constitution”.
For the purposes of this decision, the point which needs to be emphasised is that Article 245 deals with conferment of legislative powers whereas Article 246 provides for distribution of the legislative powers. Article 245 deals with extent of laws whereas Article 246 deals with distribution of legislative powers. In these articles, the Constitution Framers have used the word “make” and not “commencement” which has a specific legal connotation. [See Section 3(13) of the General Clauses Act, 1897.]”

(Emphasis supplied)

Limitations on the Exercise of Power

Exercise of sovereign power is, however, subject to Constitutional limitations especially in a federal system like ours where the States also to the extent permissible exercise the power to make laws including laws that levy taxes, duties and fees. That the power to levy taxes is subject to constitutional limitations is no longer res-integra. A Constitution Bench of this Court has in Synthetics and Chemicals Ltd. and Ors. v. State of U.P. and Ors. (1990) 1 SCC 109 recognised that in India the Centre and the States both enjoy the exercise of sovereign power, to the extent the Constitution confers upon them that power. This Court declared:

“56 … We would not like, however, to embark upon any

theory of police power because the Indian Constitution

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does not recognise police power as such. But we must

recognise the exercise of Sovereign power which gives the State sufficient authority to enact any law subject to the

limitations of the Constitution to discharge its functions.

Hence, the Indian Constitution as a sovereign State has

power to legislate on all branches except to the limitation

as to the division of powers between the Centre and the

States and also subject to the fundamental rights

guaranteed under the Constitution. The Indian States,

between the Centre and the States, has sovereign power. The sovereign power is plenary and inherent in every

sovereign State to do all things which promote the health, peace, morals, education and good order of the people.

Sovereignty is difficult to define. This power of sovereignty

is, however, subject to constitutional limitations.”This power, according to some constitutional authorities, is to the

public what necessity is to the individual. Right to tax or

levy impost must be in accordance with the provisions of

the Constitution.”

What then are the Constitutional limitations on the power of the State legislatures to levy taxes or for that matter enact legislations in the field reserved for them under the relevant entries of List II and III of the Seventh Schedule. The first and the foremost of these limitations appears in Article 13 of the Constitution of India which declares that all laws in force in the territory of India immediately before the commencement of the Constitution are void to the extent they are inconsistent with the provisions of Part III dealing with the fundamental rights guaranteed to the citizens. It forbids the States from making any law which takes away or abridges, any provision of Part III. Any law made in contravention of the said rights shall to the extent of contravention be void. There is no gain saying that the power to enact laws has been conferred upon the Parliament subject to the above Constitutional limitation. So also in terms of Article 248, the residuary power

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to impose a tax not otherwise mentioned in the Concurrent List or the State List has been vested in the Parliament to the exclusion of the State legislatures, and the States’ power to levy taxes limited to what is specifically reserved in their favour and no more.

Article 249 similarly empowers the Parliament to legislate with respect to a matter in the State List for national interest provided the Council of States has declared by a resolution supported by not less than two-thirds of the members present and voting that it is necessary or expedient in national interest to do so. The power is available till such time any resolution remains in force in terms of Article 249 (2) and the proviso thereunder.
Article 250 is yet another provision which empowers the Parliament to legislate with respect to any matter in the State List when there is a proclamation of emergency. In the event of an inconsistency between laws made by Parliament under Articles 249 and 250, and laws made by legislature of the States, the law made by Parliament shall, to the extent of the inconsistency, prevail over the law made by the State in terms of Article 251.
The power of Parliament to legislate for two or more States by consent, in regard to matters not otherwise within the power of the Parliament is regulated by Article 252, while Article 253 starting with a non-obstante clause empowers Parliament to make any law for the whole country or any part of the territory of India for implementing any treaty, agreement or convention with any other country or countries or any decision made at any international conference, association or other body.
Article 285 exempts the property of the Union from all taxes imposed by the States save in so far as the Parliament may by law provide. Article 286 places yet 44

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another Constitutional limitation on the State’s power to collect any levy that imposes or authorises the imposition of a tax on the sale or purchase of goods where such sale or purchase takes place outside the State or in the course of import of the goods into or export of the goods outside the territory of India. It also makes any law of a State imposing tax on sale or purchase of goods of special importance in inter State trade or commerce or a tax on the sale or purchase of goods being a tax of the nature referred to in the relevant sub-clauses of clause 29(A) of Article 366 subject to such restrictions and conditions as to the system of levy, rates and other incidents of tax as the Parliament may by law specify.

Article 287 places a Constitutional limitation on the State’s legislative power to enact laws in so far as imposition of tax on consumption or sale of electricity consumed by the Government of India or sold to the Government of India for consumption by the Government or for consumption of the construction, maintenance or operation of any railway by the Government of India or a rail company etc. Similarly, Article 288 contains a Constitutional limitation on the power of the State in so far as imposition of a tax in respect of any water or electricity stored, generated, consumed, distributed or sold by any authority established by any existing law or any law made by the Parliament is concerned.
It would thus appear that even when Article 246(2) and (3) confers exclusive power on the State legislatures to make laws with respect to matters in the Seventh Schedule such legislative power is exercisable subject to constitutional limitations referred to above. What is significant is that the power of the State legislatures to levy taxes is also subject to the limitations of Article 304(a) of the Constitution 45

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appearing in Part XIII thereof, which part regulates trade, commerce and intercourse within the territory of India and comprises Articles 301 to 307. The provisions of these Articles have been the subject matter of a series of decisions of this Court including several Constitution Bench decisions to some of which we shall presently refer. The language employed in the provisions and the non-obstante clauses with which the same start have all the same given rise to several contentious issues for determination by this Court over the past five decades or so. The fact that the present batch of cases had to be referred to a Nine-Judge Bench to once again examine the very same issues as have been debated and determined in the previous judgments of this Court only shows that the task of interpreting the provisions is by no means easy and has in fact become more and more difficult on account of the pronouncements of this Court taking different views not many of which have been unanimous. The marked difference in the approach adopted by learned counsel for the parties in these appeals is also a measure of the complexities of issues that fall for determination. This is specially so because the prevailing legal position in terms of the judgment of this Court in Atiabari and Automobile cases (supra) holding that fiscal measures that are compensatory fall beyond the mischief of Article 301 has been questioned by both sides. Mr. Harish Salve who led the forensic exercise followed by M/s.Arvind Datar, Laxmi Kumaran, Ravindra Shrivastava, N. Venkataraman and others vehemently argued that the “Compensatory Tax Theory” propounded by the Seven Judges Bench of this Court in Automobile case (supra) had no legal basis or constitutional sanction and was neither acceptable nor workable. That is particularly so because the State legislatures had taken umbrage under the “Compensatory Tax 46

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Theory” and declared the fiscal levies imposed by them to be compensatory in character and claimed the same to be outside the mischief of Article 301 and consequently immune from any challenge on the ground that these taxes and levies were unreasonable restrictions on the right to free trade and commerce. The States who have enacted the laws providing for levy of taxes on the entry of goods into a local area within the meaning of Entry 52 of List II have, on the other hand similarly contended that the Compensatory Tax Theory is bereft of any legal basis and that the decision in Atiabari and Automobile cases (supra) need to be revisited to restore and protect the sovereign power of legislation of the States and the Federal character of our polity. Suffice it to say that except a feeble attempt made by some Counsel, there has been a general consensus that the compensatory tax theory deserves to be rejected and the issues examined afresh on a true and correct interpretation of the relevant constitutional provisions. We are mentioning all this only to show that even after fifty years and several illuminating pronouncements of this Court, the cleavage in the judicial opinion as to the true and correct legal position on the subject continues to loom large and haunt lawyers and litigants and, if we may say so, even Judges alike. The present reference to a larger Bench is in that backdrop expected to give a quietus to this raging legal controversy of considerable complexity, though given the perseverance of the litigants and the ingenuity of the bar a quietus is only a pious hope which has and may even in future elude us.

Constitutional Limitations must be Express:

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The power to levy taxes, being a sovereign power controlled only by the Constitution, any limitation on that power must be express. That proposition is well settled by the decisions of this Court in Maharaj Umeg Singh v. State of Bombay, AIR 1955 SC 540 and Firm Bansidhar Premsukhdas v. State of Rajasthan AIR 1967 SC 40. In Umeg Singh’s case (supra) this Court stated the legal position in the following words:

“12…….The legislative competence of the State Legislature can only be circumscribed by express prohibition contained in the Constitution itself and unless and until there is any provision in the Constitution expressly prohibiting legislation on the subject either absolutely or conditionally, there is no fetter or limitation on the plenary powers which the State Legislature enjoys to legislate on the topics enumerated in the Lists II & III of the Seventh Schedule to the Constitution.

xxxx xxxx xxxx

The fetter or limitation upon the legislative power of the State Legislature which had plenary powers of legislation within the ambit of the legislative heads specified in the Lists II & III of the Seventh Schedule to the Constitution could only be imposed by the Constitution itself and not by any obligation which had been undertaken by either the Dominion Government or the Province of Bombay or even the State of Bombay. Under Article 246 the State Legislature was invested with the power to legislate on the topics enumerated in Lists II & III of the Seventh Schedule to the Constitution and this power was by virtue of article 245(1) subject to the provisions of the Constitution.

The Constitution itself laid down the fetters or limitations on this power, e.g., in Article 303 or article 286(2). But unless and until the Court came to the conclusion that the Constitution itself had expressly prohibited legislation on the subject either absolutely or conditionally the power of the

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State Legislature to enact legislation within its legislative competence was plenary. Once the topic of legislation was comprised within any of the entries in the Lists II & III of the Seventh Schedule to the Constitution the fetter or limitation on such legislative power had to be found within the Constitution itself and if there was no such fetter or limitation to be found there the State Legislature had full competence to enact the impugned Act no matter whether such enactment was contrary to the guarantee given, or the obligation undertaken by the Dominion Government or the Province of Bombay or even the State of Bombay.

Again in Bansidhar’s case (supra) this Court reiterated the legal position in the following words:

“8… It is well-established that Parliament or the State Legislatures are competent to enact a law altering the terms and conditions of a previous contract or of a grant under which the liability of the Government of India or of the State Governments arises. The legislative competence of Parliament or of the State Legislatures can only be circumscribed by express prohibition contained in the Constitution itself and unless and until there is any provision in the Constitution expressly prohibiting legislation on the subject either absolutely or conditionally, there is no fetter of limitation on the plenary powers which the Legislature is endowed with for legislating on the topics enumerated in the relevant lists. This view is borne out by the decision of the Judicial Committee in Thakur Jagannath Baksh Singh v. The United Provinces [1946 FCR 111] in which a similar complaint was made by the taluqdars of Oudh against the United Provinces Tenancy Act (U.P. Act 17 of 1939). It was held by the Judicial Committee that the Crown cannot deprive itself of its legislative authority by the mere fact that in the exercise of its prerogative it makes a grant of land within the territory over which such legislative authority exists, and no court can annul the enactment of a legislative body acting within the legitimate scope of its sovereign competence. If therefore, it be found that the subject-matter of a Crown grant is within the competence

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of a Provincial legislature nothing can prevent that legislature from legislating about it unless the Constitution Act itself expressly prohibits legislation on the subject either absolutely or conditionally. Accordingly, in the absence of any such express prohibition, the United Provinces Tenancy Act, 1939, which in consolidating and amending the law relating to agricultural tenancies and other matters connected therewith in Agra and Oudh, dealt with matters within the exclusive legislative competence of the Provincial legislature under Item 21 of List 11 of the Seventh schedule to the Government of India Act, 1935, was intra vires the Provincial legislature notwithstanding that admittedly some of its provisions cut down the absolute rights claimed by the appellant taluqdar to be comprised in the grant of his estate as evidenced by the sanad granted by the Crown to his predecessor. The same principle has been reiterated by this Court in Maharaj Umeg Singh and others v. The State of Bombay [1955 2 SCR 164]. It was pointed out that in view of Art. 246 of the Constitution, no curtailment of legislative competence can be spelt out of the terms of clause 5 of the Letters of Guarantee given by the Dominion Government to the Rulers of “States” subsequent to the agreements of Merger, which guaranteed, inter alia, the continuance of Jagirs in the merged ’States’. This principle also underlies the recent decision of this Court in Maharaja Shree Umaid Mills Ltd. v. Union of India [1963 Supp 2 SCR 515] in which it was pointed out that there is nothing in Art. 295 of the Constitution which prohibits Parliament from enacting a law altering the terms. and conditions of a contract or of a grant under which the liability of the Government of India arises….” (Emphasis Supplied)

One other fundamental aspect which must always be kept in mind while interpreting the provisions of the Constitution is the federal structure envisaged by it. Whether or not the Constitution of India is truly federal in character has been the subject matter of debate not only in

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the Constituent Assembly but also in Courts for over 60 years. The character of the Constitutional scheme described in the Constituent Assembly Debates was that there were doubts expressed whether the Constitution really provided a federal structure in the governance of the country. The criticism was that the scheme underlying the Constitution was more unitary than federal, on account not only of several provisions in the Constitution that empowered the Centre to at times intervene and enact laws for the States but also on account of the Centre’s power to take over the governance of the State. Repelling that criticism, Dr. B.R. Ambedkar speaking in the Constituent Assembly explained the true character of the Constitution of India in the following significant words:

“There is only one point of constitutional import to which I propose to make a reference. A serious complaint is made on the ground that there is too much of centralisation and that the States have been reduced to municipalities. It is clear that this view is not only an exaggeration, but is also founded on a misunderstanding of what exactly the Constitution contrives to do. As to the relation between the Centre and the States, it is necessary to bear in mind the fundamental principle on which it rests. The basic principle of federalism is that the legislative and executive authority is partitioned between the Centre and the States not by any law to be made by the Centre but by the Constitution itself. This is what Constitution does. The States under our Constitution are in no way dependent upon the Centre for their legislative or executive authority. The Centre and the States are coequal in this matter. It is difficult to see how such a Constitution can be called centralism. It may be

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that the Constitution assigns to the Centre too large a field for the operation of its legislative and executive authority than is to be found in any other federal Constitution. It may be that the residuary powers are given to the Centre and not to the States. But these features do not form the essence of federalism. The chief mark of federalism as I said lies in the partition of the legislative and executive authority between the Centre and the units by the Constitution. This is the principle embodied in our Constitution.”

To the same effect was the answer given to the criticism by Shri T.T. Krishnamachari during the Constituent Assembly Debates on the draft Constitution, when he said:

“Sir, I would like to go into a few fundamental objections because as I said it would not be right for us to leave these criticisms uncontroverted. Let me take up a matter which is perhaps partly theoretical but one which has a validity so far as the average man in this country is concerned. Are we framing a unitary Constitution? Is this Constitution centralising power in Delhi? Is there any way provided by means of which the position of people in various areas could be safeguarded, their voices heard in regard to matters of their local administration? I think it is a very big charge to make that this Constitution is not a federal Constitution, and that it is a unitary one. We should not forget that this question that the Indian Constitution should be a federal one has been settled by our Leader who is no more with us, in the Round Table Conference in London eighteen years back.”

“I would ask my honourable friend to apply a very simple test so far as this Constitution is concerned to find out whether it is federal or not. The simple definition I have got from the German school of political philosophy is that the first criterion is that the State must exercise compulsive power in the enforcement of a given political order, the second is that these powers must be regularly exercised

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over all the inhabitants of a given territory, and the third is the most important and that is that the activity of the State must not be completely circumscribed by orders handed down for execution by the superior unit. The important words are ‘must not be completely circumscribed’, which envisages some powers of the State are bound to be circumscribed by the exercise of federal authority. Having all these factors in view, I will urge that our Constitution is a federal Constitution. I will urge that our Constitution is one in which we have given power to the units which are both substantial and significant in the legislative sphere and in the executive sphere.” (Emphasis Supplied)

Whether or not the Constitution provides a federal structure for the governance of the country has been the subject matter of a long line of decisions of this Court, reference to all of which may be unnecessary but the legal position appears to be fairly well settled that the Constitution provides for a quasi federal character with a strong bias towards the Centre. The pronouncements recognised the proposition that even when Constitution may not be strictly federal in its character as the United States of America, where sovereign States came together to constitute a federal union, where each State enjoins a privilege of having a Constitution of its own, the significant feature of a federal Constitution are found in the Indian Constitution which makes it a quasi federal Constitution, if not truly federal in character and in stricto sensu federal. The two decisions which stand out in the long line of pronouncements of this Court on the subject may, at this stage, be 53

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briefly mentioned. The first of these cases is the celebrated decisions of this Court in Kesavananda Bharati case (supra), wherein a thirteen Judges Bench of this Court, Sikri CJ (as His Lordship then was), being one of them talks about whether the Constitution of India was federal in character and if so whether federal character of the Constitution formed the basic feature of the Constitution. Sikri CJ. summed up the basic feature of the Constitution in the following words:

“292. … … …The true position is that every provision of the Constitution can be amended provided in the result the basic foundation and structure of the Constitution remains the same. The basic structure may be said to consist of the following features:

(1) Supremacy of the Constitution.

(2) Republican and Democratic form of Government.

(3) Secular character of the Constitution.

(4) Separation of powers between the legislature, the executive and the judiciary;

(5) Federal character of the Constitution.

The above structure is built on the basic foundation i.e. the dignity and freedom of the individual. This is of supreme importance. This cannot by any form of amendment be destroyed.
The above foundation and the above basic features are easily discernible not only from the preamble but the whole scheme of the Constitution, which I have already discussed.”

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To the same effect are the views expressed by Shelat and Grover JJ. who declared that the federal character of the Constitution is a part of its basic structure.

In S.R. Bommai v. Union of India 1994 (3) SCC 1, this Court had yet another occasion to examine whether the Constitution was federal in nature. Speaking for himself and Justice Kuldeep Singh, Sawant J. while referring to H.M Seervai’s commentary on “Constitutional Law of India”

held that the principle of federalism has not been watered down so as to make the Constitution unitary in character. The presence in the Constitution exclusive legislative powers conferred on the State and the provision that such powers may be exercised by the Parliament during an emergency may not affect and dilute the federal character of the Constitution. So also, the provisions of Article 355 imposing the duty on the Union to protect a State against internal disorder are not inconsistent with the federal principles nor are the powers vested in the Central Government under Article 356 inconsistent with the federal character of the Constitution.

The Court, in particular, dealt with the question whether List II contains unimportant matters thereby denuding the Constitution of its federal

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character. The Court observed that List II contains very important subjects assigned to the State including the power to levy taxes which powers are made mutually exclusive so that ordinarily the States have independent source of revenue of their own. The following passages from the decision are apposite:

“…….

97 (k) The view that unimportant matters were assigned to the States cannot be sustained in face of the very important subjects assigned to the States in List II, and the same applies to taxing powers of the States, which are made mutually exclusive of the taxing powers of the Union so that ordinarily the States have independent source of revenue of their own. The legislative entries relating to taxes in List II show that the sources of revenue available to the States are substantial and would increasingly become more substantial. In addition to the exclusive taxing powers of the States, the States become entitled either to appropriate taxes collected by the Union or to a share in the taxes collected by the Union.

The above discussion thus shows that the States have an independent constitutional existence and they have as important a role to play in the political, social, educational and cultural life of the people as the Union. They are neither satellites nor agents of the Centre. The fact that during emergency and in certain other eventualities their powers are overridden or invaded by the Centre is not destructive of the essential federal nature of our Constitution. The invasion of power in such circumstances is not a normal feature of the Constitution. They are exceptions and have to be resorted to only occasionally to meet the exigencies of the special situations. The exceptions are not a rule.
For our purpose, further it is really not necessary to determine whether, in spite of the provisions of the Constitution referred to above, our Constitution is federal,

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quasi-federal or unitary in nature. It is not the theoretical label given to the Constitution but the practical implications of the provisions of the Constitution which are of importance to decide the question that arises in the present context, viz., whether the powers under Article 356(1) can be exercised by the President arbitrarily and unmindful of its consequences to the governance in the State concerned. So long as the States are not mere administrative units but in their own right constitutional potentates with the same paraphernalia as the Union, and with independent Legislature and the Executive constituted by the same process as the Union, whatever the bias in favour of the Centre, it cannot be argued that merely because (and assuming it is correct) the Constitution is labelled unitary or quasi-federal or a mixture of federal and unitary structure, the President has unrestricted power of issuing Proclamation under Article 356(1). If the Presidential powers under the said provision are subject to judicial review within the limits discussed above, those limitations will have to be applied strictly while scrutinising the concerned material.”

(Emphasis Supplied)

What is important is that B.P. Jeevan Reddy, J. speaking for himself and Aggarwal J., while holding the Constitution to be federal in character cautioned that the Centre cannot tamper with the powers conferred upon the States. States are not mere appendages of the Centre within the sphere allotted to them. The States are supreme and the Centre cannot tamper with their powers.
Justice K. Ramaswamy, speaking for himself also accepted federalism of the Indian Constitution as a basic feature. One other decision that has dealt with the federal character of the Constitution of 57

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India is Kuldeep Nair v. Union of India and Ors. (2006) 7 SCC 1 wherein this Court held that nature of federalism in the Indian Constitution is no longer res integra. Relying upon the Constituent Assembly Debates to which we have referred earlier. The Court declared:

“50. A lot of energy has been devoted on behalf of the petitioners to build up a case that the Constitution of India is federal. The nature of federalism in the Indian Constitution is no longer res integra.

There can be no quarrel with the proposition that the Indian model is broadly based on federal form of governance. Answering the criticism of the tilt towards the Centre, Shri T.T. Krishnamachari, during debates in the Constituent Assembly on the draft Constitution, had stated as follows:

……….”

While parting with this aspect we must also refer to the decision of this Court in Re: Under Article 143, Constitution of India (Special Reference No.1 of 1964) AIR 1965 SC 745 wherein this Court held:

“39. In dealing with this question, it is necessary to bear in mind one fundamental feature of a Federal Constitution. In England, Parliament is sovereign; and in the words of Dicey, the three distinguishing features of the principle of Parliamentary Sovereignty are that Parliament has the right to make or unmake any law whatever; that no person or body is recognised by the law of England as having a right to override or set aside the legislation of Parliament, and that the right or power of Parliament extends to every part of the Queen’s dominions (1). On the other hand, the essential characteristic of federalism is “the distribution of limited executive, legislative and judicial authority among bodies which are coordinate with and independent of each other”. The supremacy of the constitution is

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fundamental to the existence of a federal State in order to prevent either the legislature of the federal unit or those of the member States from destroying or impairing that delicate balance of power which satisfies the particular requirements of States which are desirous of union, but not prepared to merge their individuality in a unity. This supremacy of the constitution is protected by the authority of an independent judicial body to act as the interpreter of a scheme of distribution of powers. Nor is any change possible in the Constitution by the ordinary process of federal or State legislation (2). Thus the dominant

characteristic of the British Constitution cannot be claimed by a Federal Constitution like ours.”

Before we turn to the provisions of Articles 301 to 307 comprising Part XIII of the Constitution, we need to also bear in mind the historical backdrop in which that part of the Constitution was enacted. While doing so we must at the threshold acknowledge that the historical perspective of Part XIII has been explored several times during the past in several pronouncements of this Court. The exposition of different stages of evolution and development of what comprises Part XIII today has been both extensive as well as incisive. The decisions of the Court have gone into great details while examining the history of Part XIII. It will, therefore, be presumptuous for us to suggest that the historical basis of Part XIII is a virgin area being traversed for the first time. In fairness to the scholarly pronouncements that have preceded the present batch of cases, we must acknowledge with gratitude the usefulness of the in-

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depth study and understanding of the Judges who have examined and traced the evolution of Part XIII while drawing their conclusions from the same, no matter such inferences and conclusions have more often than not been varied which is but natural when one examines history or the events that led to its making.

It is, in our opinion, unnecessary to refer to all the decisions that have till now traced the development of the jurisprudence concerning Part XIII from its inception. A reference to some of the decisions alone should, in our opinion, suffice. The first of these decisions to which we must make a reference is the Constitution Bench decision in M.P.V. Sunderaramier v. State of Andhra Pradesh, AIR 1958 SC 468. That was a case filed under Article 32 of the Constitution of India for a Writ of Prohibition restraining the State of Andhra Pradesh from imposing a tax on inter-State trade of sale and purchase of yarn. The levy and collection of any such tax was according to the petitioner contrary to the provision contained in Article 282 (6) of the Constitution of India. One of the questions that fell for consideration of the Court was whether the States could impose a tax on inter-State sales having regard to the provisions of Articles 246 and 301 of the Constitution of India. The argument was that the freedom guaranteed under Article 301 included 60

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freedom from taxation with the result that any tax on inter-State sales would offend that guarantee. The contention was rejected by this Court in unequivocal terms. The Court said :

“(50) This contention suffers, in our opinion, from serious infirmities. It overlooks that our Constitution was not written on a tabula-rasa, that a Federal Constitution had been established under the Government of India Act, 1935, and though that has undergone considerable change by way of repeal, modification and addition, it still remains the framework on which the present Constitution is built, and that the provisions of the Constitution must accordingly be read in the light of the provisions of the Government of India Act.”

(Emphasis supplied)

Three years later came the Constitution Bench decision of this Court in Atiabari Tea Company Ltd. case (supra). The petitioner in that case questioned the constitutional validity of Assam Taxation (on Goods Carried by Roads or Inland Waterways) Act, (Assam Act XIII of 1954), before the High Court. The Writ Petition having failed, the matter was brought up in appeal before this Court which was heard alongwith several petitions filed under Article 32 of the Constitution of India. The impugned legislation levied taxes on certain goods carried by road and inland waterways in the State of Assam. The levy under the legislation was challenged primarily on the ground that the same was ultra vires of the Constitution inter aila because of their repugnance with the

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provision of Article 301 of the Constitution. This Court by a majority struck down the Constitutional validity of the enactment holding that the impugned levy operated directly and immediately as a restriction on free trade, commerce and intercourse guaranteed under Article 301 of the Constitution of India. The decision propounded three different points of view, one each taken by B.P. Sinha, CJ. and J.C. Shah, J. and the third by majority comprising P.B. Gajendragadkar, K.N. Wanchoo and K.C. Das Gupta, JJ. We shall presently deal with the rationale underlying the three views but before we do so, we may gainfully extract from the decision rendered by Sinha, CJ., the historical perspective in which Part XIII of the Constitution was enacted. In Para 9 of the Report, Sinha, CJ., as His Lordship then was, traced the evolution of Part XIII in the following words:

“9. In order to fully appreciate the implications of the provisions of Part XIII of the Constitution, it is necessary to bear in mind the history and background of those provisions. The Constitution Act of 1935 (Government of India Act, 26 (‘Geo. 5, Ch. 2) which envisages the federal constitution for the whole of India, including what was then Indian India in contradistinction to British India, which could not be fully implemented and which also introduced full provincial autonomy enacted Section 297 prohibiting certain restrictions on internal trade in these terms:

(1) No Provincial Legislature or Government shall –

(a) By virtue of the entry in the Provincial Legislative List relating to trade and commerce within the Province, or the

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entry in that list relating to the production, supply, and distribution of commodities, have power to pass any law or take any executive action prohibiting or restricting the entry into, or export from the Province of goods of any class or description; or

(b) By virtue of anything in this Act have power to impose any tax, cess, toll or due which, as between goods manufactured or produced in the Province and similar goods not so manufactured or produced, discriminates in favour of the former, or which, in the case of goods manufactured or produced outside the Province, discriminates between goods manufactured or produced in one locality and similar goods manufactured or produced in another locality.

(2) Any law passed in contravention of this section shall, to the extent of the contravention, be invalid.”

It will be noticed that the prohibition contained in the section quoted above applied only to Provincial Governments and Provincial Legislatures with reference to entries in the Provincial Legislative List relating to trade and commerce within the Province and to production, supply and distribution of commodities. That section dealt with prohibitions or restrictions in respect of import into or export from a Province, of goods generally. It also dealt with the power to impose taxes etc. and prohibited discrimination against goods manufactured or produced outside a Province or goods produced in different localities. Part XIII of the Constitution has introduced all those prohibitions, not only in respect of State Legislatures, but of Parliament also. ….
In this connection it has got to be remembered that before the commencement of the Constitution about two thirds of India was directly under British rule and was called ‘British India’ and the remaining about one-third was being directly ruled by the Princes and was known as “Native States”. There were a large number of them with varying degrees of sovereignty vested in them. Those rulers had, broadly speaking, the trappings of a Sovereign State with power to impose taxes and to regulate the flow of trade,

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commerce and intercourse. It is a notorious fact that many of them had erected trade barriers seriously impeding the free flow of trade, commerce and intercourse, not only shutting out but also shutting in commodities meant for mass consumption. Between the years 1947 and 1950 almost all the Indian States entered into engagements with the Government of India and ultimately merged their individualities into India as one political unit, with the result that what was called British India, broadly speaking, became, under the Constitution, Part A States, and subject to certain exceptions not relevant to our purpose, the Native States became Part B States. We also know that before the Constitution introduced the categories of Part A States, Part B States and Part C States (excluding Part D relating to other territories), Part B States themselves, before their being constituted into so many units, contained many small States, which formed themselves into Unions of a number of States, and had such trade barriers and custom posts, even inter se. But even after the merger, the Constitution had to take notice of the existence of trade barriers and therefore had to make transitional provisions with the ultimate objective of abolishing them all. Most of those Native States, big or small, had their own taxes, cesses, tolls and other imposts and duties meant not only for raising revenue, but also as trade barriers and tariff walls. It was in the background of these facts and circumstances that the Constitution by Article 301 provided for the abolition of all those trade barriers and tariff walls. When for the first time in the history of India the entire territory within the geographical boundaries of India, minus what became Pakistan, was knit into one political unit, it was necessary to abolish all those trade barriers and custom posts in the interest of national solidarity, economic and cultural unity as also of freedom of trade, commerce and intercourse.”

(Emphasis supplied)

The majority opinion offered by Gajendragadkar J., also traced the history of Part XIII in the following words:

“33. Let us first recall the political and constitutional background of Part XIII. It is a matter of common

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knowledge that, before the Constitution was adopted, nearly two-thirds of the territory of India was subject to British Rule and was then known as British India, while the remaining part of the territory of India was governed by Indian Princes and it consisted of several Indian States. A large number of these States claimed sovereign rights within the limitations imposed by the paramount power in that behalf, and they purported to exercise their legislative power of imposing taxes in respect of trade and commerce which inevitably led to the erection of customs barriers between themselves and the rest of India. In the matter of such barriers British India was governed by the provisions of Section 297 of the Constitution Act, 1935. To the provisions of this section we will have occasion later to refer during the course of this judgment. Thus, prior to 1950 the flow of trade and commerce was impeded at several points which constituted the boundaries of Indian States. After India attained political freedom in 1947 and before the Constitution was adopted the historical process of the merger and integration of the several Indian States with the rest of the country was speedily accomplished with the result that when the Constitution was first passed the territories of India consisted of Part A States which broadly stated represented the provinces in British India, and Part B States which were made up of Indian States. This merger or integration of Indian States with the Union of India was preceded by the merger and consolidation of some of the States inter-se between themselves. It is with the knowledge of the trade barriers which had been raised by the Indian States in exercise of their legislative powers that the Constitution- makers framed the Articles in Part XIII. The main object of Article 301 obviously was to allow the free flow of the stream of trade, commerce and intercourse throughout the territory of India.”

Then came the decision of this Court in Automobile case (supra) wherein, this Court examined the challenge to the Rajasthan Motor Vehicles Act, inter aila, on the ground that levy of taxes imposed under

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the said Act were offensive to Article 301 of the Constitution of India. S.K. Das, J. speaking for the majority also traced the historical background of Part XIII in the following words:

“7. So far we have set out the factual and legal background against which the problem before us has to be solved. We must now say a few words regarding the historical background. It is necessary to do this, because extensive references have been made to Australian and American decisions, Australian decisions with regard to the interpretation of Section 92 of the Australian Constitution and American decisions with regard to the Commerce clause of the American Constitution. This Court pointed out in the Atiabari Tea Co. case (1961) 1 SCR 809 : (AIR 1961 SC 232), that it would not be always safe to rely upon the American or Australian decisions in interpreting the provisions of our Constitution. Valuable as those decisions might be in showing how the problem of freedom of trade, commerce and intercourse was dealt with in other federal constitutions, the provisions of our Constitution must be interpreted against the historical background in which our Constitution was made; the background of problems which the Constitution-makers tried to solve according to the genius of the Indian people whom the Constitution makers represented in the Constituent Assembly. The first thing to be noticed in this connection is that the Constitution-makers were not writing on a clean slate. They had the Government of India Act, 1935 and they also had the administrative set up which that Act envisaged. India then consisted of various administrative units known as Provinces, each with its own administrative set up. There were differences of language, religion etc. Some of the Provinces were economically more developed than the others. Even inside the same Province, there were under developed, developed and highly developed areas from the point of view of industries, communications etc. The problem of economic integration with which the Constitution-makers were faced was a problem with many facets. Two questions, however, stood out; one question was how to achieve a federal, economic and fiscal integration, so that economic policies affecting the

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interests of India as a whole could be carried out without putting an ever-increasing strain on the unity of India, particularly in the context of a developing economy. The second question was how to foster the development of areas which were under-developed without creating too many preferential or discriminative barriers. Besides the Provinces, there were the Indian States also known as Indian India. After India attained political freedom in 1947 and before the Constitution was adopted, the process of merger and integration of the- Indian States with the rest of the country had been accomplished so that when the Constitution was first passed the territory of India consisted of Part A States, which broadly stated, represented the Provinces in British India, and Part B States which were made up of Indian States. There were trade barriers raised by the Indian States in the exercise of their legislative powers and the Constitution-makers had to make provisions with regard to those trade barriers as well. The evolution of a federal structure or a quasi-federal structure necessarily involved, in the context of the conditions then prevailing, a distribution of powers and a basic part of our Constitution relates to that distribution with the three legislative lists in the Seventh Schedule. … … …”

Hidayatullah J., in a separate dissenting opinion traced at great length the historical evolution of not only the federal structure of the Government of India Act, 1915 but also the recommendations made by the Simon Commission and the Joint Parliamentary Committee on the Evolution of such Federalism and for the protection of trade, commerce and intercourse. His Lordship referred to the backdrop in which the Government of India Act, 1935 was enacted, including the recommendations made by the Butler Committee, the Round Table Conference, the Federal Structure Committee, the Federal Legislature 67

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and Provincial Legislature Committee and the Joint Parliamentary Committee to eventually conclude that the avowed object underlying all these recommendations and constitutional framework was to ensure that the accession of the State to the federation implies its acceptance of the principle that it will not set up a barrier to free interchange so formidable as to constitute a threat to the future of the federation. Based on the historical developments decades before the enactment of Government of India Act, 1935, his Lordship concluded:

“95. The detailed examination of the history lying at the back of the Government of India Act, 1935 lays bare some fundamental facts and premises. It shows that the process through a whole century was the breakup of a highly

centralized Government and the creation of autonomous Provinces with distinct and separate political existence, to be combined inter se and with the Indian States, at a later period, in a federation. To achieve this, not only was there a division of the heads of legislation, but the financial resources were also divided and separate fiscs for the federation and the Provinces were established. The fields of taxation were demarcated, and those for the Provinces were chosen with special care to make these units self

supporting as far as possible with enough to spare for “nation-building activities”. In this arrangement, the door was open for the Indian States to join on the same basis and on terms of equality. The most important fact was that unlike the American and the Canadian Constitutions the commerce power was divided between the Centre and the Provinces as the Entries quoted by us clearly show. The commerce power of the Provinces was exercisable within the Provinces. The fetter on the commercial power of the Provinces was placed by Section 297. This was in two directions. Clause (a) of sub-section (1) banned restrictions at the barriers of the Provinces on the entry and export of goods, and clause (b) prohibited discrimination in taxing

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goods between goods manufactured and produced in the Province as against goods not so manufactured or produced and local discriminations.”

(Emphasis supplied)

In the opinion of Hidayatullah J., as his Lordship then was, several pitfalls existed in the 1935 Act regarding trade and commerce which were sought to be remedied by the framers of the Constitution while maintaining its federal structure. The following passage is, in this regard, instructive:

“96. When drafting the Constitution of India, the Constituent Assembly being aware of the problems in various countries where freedom of trade, commerce and intercourse has been provided differently and also the way the Courts of those countries have viewed the relative provisions, must have attempted to evolve a pattern of such freedom suitable to Indian conditions. The Constituent Assembly realised that the provisions of Section 297 and the Chapter on Discriminations in the Government of India Act, 1935 hardly met the case, and were inadequate. They had to decide the following questions: (a) whether to give the commerce power only to Parliament or to divide it between Parliament and the State Legislatures; (b) whether to ensure freedom of trade, commerce and intercourse inter-State, that is to say, at the borders of the States or to ensure it even intra-State; (c) whether to make the prohibition against restrictions absolute or qualified, and if so, in what manner; (d) if qualified, by whom was the restriction to be imposed and to what extent; (e) whether the freedom should be to the individual or also to trade and commerce as a whole; (f) what to do with the existing laws in British India and more so, in the acceding Indian States; (g) whether any special provisions were needed for emergencies; (h) what should be the special provisions to enable the States to levy taxes on sale of goods, which

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taxes were to be the main source of income for the States according to the experts. All these matters have, in fact, been covered in Part XIII, and the pitfalls which were disclosed in the Law Reports of the Countries which had accepted freedom of trade and commerce have been attempted to be avoided by choosing language appropriate for the purpose. In addition to this, the broad pattern of the political set-up, namely, a federation of autonomous States was not lost sight of. These autonomous conditions had strengthened during the operation of the 1935 Constitution and led to what Prof. Coupland described as “Provincial-patriotism”, for which the reason, according to the learned Professor was:

“In the course of the last few years, moreover, the sense of Provincial patriotism has been strengthened by the advent of a full Provincial self-government. The people took a new pride in Governments that were now in a sense theirs.” (The Constitutional Problem in India, part III p. 40).”

The historical backdrop painted by the decisions of this Court referred to above has not been challenged on a question of fact. Inferences drawn from the same may have, as noticed earlier, varied depending on the individual perspective of the Judges about the said backdrop. The common thread that runs through the historical narratives in the pronouncements of this Court however is discernible and may be briefly summed-up at this stage. The first of these threads that runs through the historical perspective is the fact that before commencement of the Constitution nearly 2/3rd of the country was ruled by the British while the remaining 1/3rd was ruled by the Princes

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also known as native States that enjoyed varying degrees of sovereignty over their respective territories. These rulers had the power to impose taxes and to regulate the flow of trade, commerce and intercourse. Some of them had erected trade barriers thereby impeding free flow of trade, commerce and intercourse. With the merger of these Princely States into the dominion of India to constitute one single political entity, that part of the country that was ruled by the British came to be known as Part-A State while the native States became Part B States. What is significant is that even after the merger of these States, the Constitution had to acknowledge the existence of trade barriers and make transitional provisions with a view to eventually abolishing the same. It was in that background that the Constitution by Article 301 provided for the abolition of all such trade barriers consequent upon the entire geographical boundaries of India being knit into one political unit. The whole object underlying the removal of such barriers was to facilitate free trade, commerce and intercourse in the interest of national solidarity and economic unity of the country. The evolution of Articles 301 to 307 comprising Part XIII of the Constitution is also punctuated by several events, twists and turns to which we may briefly refer at this stage, but, while we may do so, we

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need to remember that Section 297 of the Government of India Act, 1935 dealt with the subject that eventually came under the umbrella of Part XIII and prohibited provincial governments from imposing barriers on trade within the country. The said provision also prohibited levy of cess, tolls or other tax duties which discriminated between the goods manufactured in one locality as against similar goods manufactured elsewhere. It is because of the said provision that Venkatarama Iyer, J. in MPV Sunderaramier’s case (supra) made the observation that the Constitution was not written on a tabula rasa.

The first germ plasma for Article 301 was located in what was introduced as Clause 13 in the draft submitted by the Sub-Committee on fundamental rights comprising Mr. K.M. Munshi, Sir Alladi Krishnaswami Ayyar and Sir B.N. Rau amongst others. The clause was in the following words:

“Subject to regulation by the law of the Union, trade, commerce and intercourse among the units, whether by means of internal carriage or by ocean navigation, shall be free:

Provided that any unit may by law impose reasonable restrictions thereon in the interest of public order, morality or health.”

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From the note of Sir B.N. Rau it is evident that the first part of clause 13 (supra) was adopted from Section 92 of the Australian Constitution while the proviso at the end of the clause was new.

Sir Alladi Krishnaswami Ayyar in the Draft Report of 10th, 14th and 15th April, 1947 in relation to Clause 13 suggested that it must be made clear that:

“(1) goods from other parts of India than in the units’ concerned coming into the units cannot escape duties and taxes to which the goods produced in the units in themselves are subject.

(2) It must also be open to the unit in an emergency to place restrictions on the rights declared by the clause.”

The above suggestions were accepted and it was modified and incorporated as Clause 14 in the following words:

“14. (1) Subject to regulation by the law of the Union trade, commerce and intercourse among the units by and between the citizens shall be free:

Provided that any unit may by law impose reasonable restrictions in the interest of public order, morality or health or in an emergency:

Provided that nothing in this section shall prevent any unit from imposing on goods imported from other units the same duties and taxes to which the goods produced in the unit are subject:

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Provided further that no preference shall be given by any regulation of commerce or revenue by a unit to one unit over another.

[N.B. – A proviso will have to be added to meet the difficulty pointed out in para 6 of our report.]

(2) Trade, commerce or intercourse within the territories of the Union by or with any person other than the citizens shall be regulated and controlled by the law of the Union.

The above clause then came up for consideration before the Advisory Committee where an elaborate debate ensued. What is of considerable importance is the statement of Sir Alladi Krishnaswami Ayyar where he explained the purpose of enabling a State to impose reasonable restriction in the interest of public order, morality, health or in an emergency:

“Chairman: Then let us take up clause 14

Rajagopalachari: I Think we should add to 14 (1) that this shall not be a bar to the imposition of taxes for genuine

purposes of revenue.

Many Members: That comes later on: “N.B. A proviso will

have to be added to meet the difficulty pointed out in para 6 of our report.”

Rajagopalachari: That is why I am adding it.

Alladi Krishnaswami Ayyar: “Subject to regulation by the

law of the Union, trade, commerce, and intercourse among the units by and between the citizens shall be free.” That is the general principle. Then come the exceptions,

“Provided that any unit may by law impose reasonable

restrictions in the interest of public order, morality or health 74

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or in an emergency.” Suppose there is a general famine, and people are starved, that is what is meant here to be dealt with.

And then “Provided that nothing in this section shall prevent any unit from imposing on goods imported from other units the same duties and taxes to which the goods produced in the unit are subject.” That is to say, we ought not to differentiate; but at the same time, goods coming in should not go scot-free; they should be subject to the same duty as goods produced in the area.

And then “Provided further that no preference shall be given by any regulation of commerce or revenue by a unit to one unit over another.” Now, kindly read paragraph 6 of the report, regarding adding a proviso.

K.M. Panikkar: Rajaji (C. Rajagopalachari) has raised the question of the right of the units to raise taxes, and says this right should not be denied. I, however, think this is a dangerous power to be given to the units. This may result in the creation of so many competing units. We have allowed for two things. We have allowed the unit to tax its own industries. We also allow things brought in to be taxed, for the sake of parity. But our friends want to go a little further and say that the right to impose taxes, or transit duty or some other kind of duty must be given to the units. That I am afraid, will be a negation of the clause. There are certain rates and duties existing in Indian States which for budgetary and other reasons cannot now be extinguished immediately. It may be possible to extinguish them over a period of time, by agreement, but not immediately.

Rajagopalachari: If the States everywhere can impose taxes and duties for revenue, cannot the provinces also do so?

Alladi Krishnaswami Ayyar: We do not give a carte blanche to the States. It has been pointed out that certain condition of things obtain at present in the States, and …

K.M. Panikkar: Let me explain the position. The position with regard to the internal customs in the States is

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complicated. In a large number of States these customs or duties do not exist. For example for the whole of the Punjab States there is no right for internal customs. For Hyderabad they have the right to impose a tax up to 5% only, both on imports and exports. In Travancore and Cochin it is governed by what is called inter-portal convention. A large number of States have no right whatever even now for imposing customs duty, but a considerable number of them do enjoy this power and their budgetary position today is based on the customs duties they receive, both the maritime States and the internal States. Therefore

arrangements will have to be made with them by agreement and contract for setting this matter.

Alladi Krishnaswami Ayyar: The Union Powers Committee’s attention was drawn to this matter and it was suggested by Sir V.T. Krishnamachari and Sir B.L. Mitter that some reference should be made to it in their report. We wanted to permit the States to enjoy the indulgence they have been enjoying. But we should guard against converting the country into competing units; that will be against the federation idea.

Chairman: What shall we do about the note? A proviso will have to be added to meet the difficulty pointed out in para 6 of the report. Shall we leave it as it is or shall we draft it?

Rajagopalachari: I would request members who have given thought to this subject to please inform me how the units will raise their revenue. As it is, the Union does not contemplate the distribution of subsidies to the provinces. The provinces or groups differ among themselves, some are rich and some are poor. Some are capable of managing with their existing resources; but others may have to increase their revenue for managing their affairs. If you impose so many limitations on them, how can they do that? It is all very well to say free trade is necessary; but how are the provinces to live?

Alladi Krishnaswami Ayyar: So far as the provincial legislatures are concerned, there is provision in Sec. 297 of the present Government of India Act itself: (Reads) “No Provincial Legislature or Government shall by virtue of entry

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*** have power to pass any law or take any executive

action ***description…”

Rajagopalachari: But at present we have the receipts

from customs and other receipts.

Alladi Krishnaswami Ayyar: The other day the Madras Premier said he could stop the import of textiles from Bombay and other places outside Madras: but it was pointed out to him that until the constitution is altered he cannot do so. This theory of self-sufficiency of different units is dangerous in our country, because we have to depend upon one another.

Govind Ballabh Pant: There is unanimity about the body of this clause and it is clear that there should not be any discrimination against one unit by another unit. Otherwise we will be going against the very sense of a Union or a Federal Constitution. If the units are to be discriminated against, we will come to blows more often than otherwise. Therefore this should be avoided. The only thing to be considered is how to give effect to the suggestion made in para 6 of the President’s letter which we have received through the chairman. Should we append a note to the effect that the Constituent Assembly may consider how best to give effect to this clause in relation to the States or shall we put up a draft. If we are not going to put up a draft, then the matter is simple enough.”

The Advisory Committee accepted the recommendation of the Sub-Committee in relation to Clause 14 with one change that the sub clause providing for central regulation of trade by or with non-citizens was dropped as being vague and unnecessary. The Advisory Committee in its report submitted on 23rd April, 1947 incorporated the above provision as Clause 10. Certain amendments to the said clause

were suggested and adopted by the Constituent Assembly. 77

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In the first Draft Constitution of October, 1947, Clause 17 underwent further amendments and eventually appeared in the Draft Constitution of 1948 as Clause 16 incorporated in the Fundamental Rights Chapter in the following words:

“16. Subject to the provisions of Article 244 of this Constitution and of any law made by Parliament, trade, commerce and intercourse throughout the territory of India shall be free.”

It is noteworthy to mention here that Inter-State trade and commerce was dealt with in Articles 243, 244 and 245 in the Draft Constitution of 1948 which Articles were in the following terms:

“243. No preference shall be given to one State over another nor shall any discrimination be made between one State and another by any law or regulation relating to trade or commerce, whether carried by land, water or air.

Notwithstanding anything contained in article 16 or in the last preceding article of this Constitution, it shall be lawful for any State –

(a) to impose on good imported from other

States any tax to which similar goods

manufactured or produced in that State

are subject, so, however, as not to

discriminate between goods so imported

and goods so manufactured or

produced; and

(b) to impose by land such reasonable

restrictions on the freedom of trade,

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commerce or intercourse with that State

as may be required in the public interests:

Provided that during a period of five years

from the commencement of this

Constitution the provisions of clause (b) of

this article shall not apply to trade or

commerce in any of the commodities

mentioned in clause (a) of Article 306 of

this Constitution.

Parliament shall by law appoint such authority as it considers appropriate for the carrying out of the provisions of Articles 243 and 244 of this Constitution and confer on the authority so appointed such powers and such duties as it thinks necessary.”
The Ministry of Industry and Supply expressed some reservation regarding clause (b) of Article 244 and demanded abolition of the said clause altogether. The Ministry appears to have argued that it was not possible to foresee the circumstances in which the freedom of trade, commerce or intercourse with a State will need to be interfered with by that State in the public interest, unless it be on the basis of discrimination between the residents of one State to another, and this would be wholly contrary to the spirit of the Constitution. [See: B. Shiva Rao; the Framing of India’s Constitution, Volume-IV, Page 329]
The note in support of the proposed clause (b) to Article 244, however, clearly suggests that restrictions referred to in clause (b) were

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meant to be restrictions other than by way of taxation. The explanatory note which was appended by Sir B.N. Rau was in the following words:

“Note: During a period of depression owing to destruction by flood or otherwise of crops in any particular State, it may be necessary for the State to impose restrictions on the export of any crop from such State in the public interests. Similarly on the outbreak of any epidemic disease, like plague, in a State it may be necessary for a neighbouring State to impose restrictions on the freedom of intercourse between the inhabitants of that State with the inhabitants of such neighbouring State. Clause (b) of Article 244 is intended to give power to the State to impose such restrictions.”

On 8th of September, 1949, Dr. B.R. Ambedkar moved an amendment seeking to delete Articles 243, 244 and 245 and the same was adopted. Simultaneously, a new Part XA was introduced containing draft Article 274-A to E. Dr. Ambedkar informed the House that the Articles that were otherwise scattered were now brought together so as to ensure that members could get a holistic idea regarding trade and commerce. Article 274-A was a repetition of Article 16 and laid down the general principle. Article 274-B empowered Parliament to impose restrictions in public interest. Article 274-C prohibited Parliament and the State legislatures from making any law giving any preference to one State over another, or making any

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