Jindal Stainless Steel Ltd. v. State of Haryana (2017)
Quick Summary
CASE_TITLE: Jindal Stainless Steel Ltd. v. State of Haryana, (2017) 12 SCC 1
PUBLISH_DATE: 25 Oct 2025 | AUTHOR_NAME: Gulzar Hashmi | LOCATION: India
The Supreme Court struck down Haryana’s Entry Tax on goods entering local areas. It held that the levy impeded free trade under Article 301, lacked a reasonable nexus with services, and put an undue burden on trade. The State was restrained from collecting the tax.
Issues
- Does Haryana’s Entry Tax violate Articles 301 and 304?
- Is the levy linked reasonably to services given by the State?
- Does it create double taxation or an undue burden on trade?
Rules
- Article 301: Trade, commerce, and intercourse must flow freely across India.
- Reasonable Nexus: Any entry levy must relate to services/facilities from the State.
- No Undue Burden: The impost must not operate as a trade barrier or double tax.
Facts (Timeline)
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Arguments
Appellant (Jindal Stainless Steel Ltd.)
- Entry Tax blocks free flow of goods; violates Art. 301.
- No clear service link; levy turns into a burden, not a fee.
- Results in double taxation and discriminates against imported goods.
Respondent (State of Haryana)
- Tax funds local facilities used by incoming goods.
- Levy is regulatory and reasonable, not a barrier.
- Applied uniformly within the State’s scheme.
Judgment (Held)
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- Levy Unconstitutional: The Entry Tax impeded free trade under Article 301.
- No Reasonable Nexus: The State failed to show a clear, proportional service linkage.
- Undue Burden/Double Tax Risk: The impost operated like a trade barrier.
- Consequence: Entry Tax provisions under the 2000 Act were struck down; State restrained from collecting the tax.
Ratio Decidendi
An entry levy that burdens the movement of goods and lacks a clear service nexus violates Article 301 and cannot be justified under Article 304. Such a tax is invalid.
Why It Matters
- Protects the national market from local barriers in the name of “entry” levies.
- Insists on a real, measurable link between tax and services.
- Warns States against double taxation and disguised trade hurdles.
Key Takeaways
Any levy blocking movement of goods hits Article 301.
Tax must clearly connect to State services used by goods.
Avoid double taxation and heavy trade costs.
Articles 301–304 set strict limits for entry levies.
Mnemonic + 3-Step Hook
Mnemonic: “ENTER FAIR — OR FAIL”
- ENTER: Goods can enter freely across India (Art. 301).
- FAIR: Any levy must fairly match services (nexus, no excess).
- OR FAIL: If it burdens trade or doubles tax, it is invalid.
IRAC Outline
| Issue | Rule | Application | Conclusion |
|---|---|---|---|
| Is Haryana’s Entry Tax constitutional under Arts. 301 & 304? | Free trade (Art. 301); levy must have service nexus and no undue burden; avoid double taxation. | Tax hindered movement and lacked proportional service linkage; operated like a barrier. | Unconstitutional; provisions struck down; State restrained from collecting Entry Tax. |
Glossary
- Entry Tax
- A levy on goods brought into a local area for use, consumption, or sale.
- Article 301
- Ensures freedom of trade, commerce, and intercourse throughout India.
- Reasonable Nexus
- A real link between the levy and services provided by the State.
FAQs
Related Cases
Free Trade & Article 301
Cases testing whether fiscal measures directly impede movement of goods.
Nexus & Reasonableness
Judgments on service linkage and proportionality for entry levies.
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