GODFREY PHILLIPS INDIA LTD. AND ANR. versus STATE OF U.P. AND ORS.

GODFREY PHILLIPS INDIA LTD. AND ANR. versus STATE OF U.P. AND ORS.

Entry 62 of List II does not empower States to levy luxury tax on goods or articles but is restricted to activities of indulgence, enjoyment, or pleasure. As the impugned statutes levy tax on goods described as luxury goods, they are legislatively incompetent and unconstitutional.

Parties
Appellant: Godfrey Phillips India Ltd.; Respondent: State of U.P.; Respondent: Andhra Pradesh (A.P.); Respondent: West Bengal
Jurisdiction
India
Judgment Date
20 January 2005
Procedural Posture
Writ Petition / Civil Appeal / Supreme Court Final Judgment
Outcome
Impugned statutes (U.P. Tax on Luxuries Act, 1995; A.P. Tax on Luxuries Act, 1987; West Bengal Tax on Luxuries Act, 1994) declared ultra vires and legislatively incompetent; no refund of taxes already paid; bank guarantees discharged; appellants must pay to State amounts collected from consumers during interim stay.
Legal Topics
Legislative Competence, Luxury Tax, Interpretation of Schedule VII, Division of Powers, Entry 62 List II, Tax on Luxuries
Constitutional Law Taxation Law Legislative Competence Luxury Tax Interpretation of Schedule VII Division of Powers Entry 62 List II Tax on Luxuries

Case Brief

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Parties

Godfrey Phillips India Ltd.

Appellant

State of U.P.

Respondent

Andhra Pradesh (A.P.)

Respondent

West Bengal

Respondent

Procedural Posture

Writ Petition / Civil Appeal / Supreme Court Final Judgment

Legal Issues

  1. 1 Whether Entry 62 of List II of Schedule VII to the Constitution empowers States to levy a luxury tax on goods or articles as opposed to activities of indulgence, enjoyment or pleasure.
  2. 2 Whether the impugned State statutes levying luxury tax on 'luxury goods' are constitutionally valid.

Ratio Decidendi

Entry 62 of List II does not empower States to levy luxury tax on goods or articles but is restricted to activities of indulgence, enjoyment, or pleasure. As the impugned statutes levy tax on goods described as luxury goods, they are legislatively incompetent and unconstitutional.

Court Disposition

Impugned statutes (U.P. Tax on Luxuries Act, 1995; A.P. Tax on Luxuries Act, 1987; West Bengal Tax on Luxuries Act, 1994) declared ultra vires and legislatively incompetent; no refund of taxes already paid; bank guarantees discharged; appellants must pay to State amounts collected from consumers during interim stay.

Orders

  • W.P. Nos. 567, 568-569/1994 allowed.
  • C.A. Nos. 123-125/1995 dismissed.