Arijit Pasayat, J. - (1.) These appeals and certain connected matters were initially heard by a two-Judge Bench of this Court. The matters were referred to a larger Bench by order dated 26.9.2003 as the Bench hearing the matters doubted the correctness of the views expressed in M/s. Bhagatram Rajeevkumar vs. Commissioner of Sales Tax, M.P. and Others [(1995) 1 Suppl. SCC 673] which was relied on in a subsequent decision in State of Bihar and Others vs. Bihar Chambers of Commerce and Others [(1996) 9 SCC 136. The matters were dealt with by a Constitution Bench to decide with certitude the parameters of the judicially evolved concept of Compensatory Tax" viz-a-viz. Article 301 of the Constitution of India, 1950 (in short the Constitution).
(2.) The Constitution Bench in Jindal Stainless Ltd. and Anr. vs. State of Haryana and Ors. [(2006) 4 SCALE 300] [speaking through one of us (Kapadia, J.) concluded as follows : 49. In our opinion, the doubt expressed by the referring Bench about the correctness of the decision in Bhagatrams case, (supra) followed by the judgment in the case of Bihar Chamber of Commerce (1996) 9 SCC 136 was well-founded. 50. 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. vs. State of Assam, AIR 1961 SC 232 and the working test enunciated in Automobile Transport (Rajasthan) Ltd. vs. State of Rajasthan, AIR 1962 SC 1406 for deciding whether a tax is compensatory or not vide para 19 of the report, will continue to apply and the test of "some connection" indicated in para 8 of the judgment in Bhagatram Rajeevkumar vs. Commissioner of Sales Tax, M.P., (1995) 1 Suppl. SCC 673 and followed in the case of State of Bihar vs. Bihar Chamber of Commerce (1996) 9 SCC 136, 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.
(3.) In all these appeals and connected matters the basic issue revolves round the concept of "Compensatory Tax". In all these matters the concerned High Courts do not appear to have examined the issue in the proper perspective, as they were bound by the judgments in Bhagatrams case (supra) and Bihar Chamber of Commerces case (supra).;