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U.P. Asbestos Limited vs State of Rajasthan 2025 INSC 1154 - Art. 304 Constitution

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Constitution of India- Article 304 - (i) Clauses (a) and (b) of Article 304 are to be read disjunctively, and hence, a tax cannot be said to merely differentiate only if the procedure under Article 304(b) is satisfied, but not Article 304(a) of the Constitution; (ii) A tax imposed on goods imported from another state would not be discriminatory if no similar goods are produced within that State; (iii) States are at liberty to design their fiscal legislations in such a manner to ensure that the tax burden on goods imported from other States is equal to the tax burden on those goods produced within the State. Therefore, a tax designed to impose equal burdens cannot be said to be discriminatory. However, whether the tax burden falls equally is a question of fact to be determined in each case when the question arises; (iv) Further, a tax rebate or other relief in the form of incentives or set-off which is: • granted to a specified class of dealers; • for a limited period of time; • in a non-hostile fashion; 89 • with a view to developing economically backward areas; would not be held to be discriminatory. v) However, the question whether a tax fulfils the above criteria is a question of fact to be determined depending upon the facts of each case. (Para 12.1)

Constitution of India - Article 226,32 -Administrative Law - Any order passed by any public authority exercising administrative/executive or statutory powers must be judged by the reasons so mentioned in that order and cannot be supplemented by fresh reasons in the shape of an affidavit or otherwise. (Para 12.13)

Case Info

Case Name and Neutral Citation

  • Case Name: M/s. U.P. Asbestos Limited & Ors. v. State of Rajasthan & Ors.
  • Neutral Citation: 2025 INSC 1154

Coram

  • Coram: Hon’ble Justice B.V. Nagarathna and Hon’ble Justice K.V. Viswanathan

Judgment Date

  • Date of Judgment: September 24, 2025

Caselaws and Citations Referred


The judgment refers to several landmark Supreme Court decisions, including:

  1. Atiabari Tea Co. Ltd. v. State of AssamAIR 1961 SC 232
  2. Automobile Transport (Rajasthan) Ltd. v. State of RajasthanAIR 1962 SC 1406
  3. Firm A.T.B. Mehtab Majid and Co. v. State of Madras(1963) Supp. 2 SCR 435
  4. Kalyani Stores v. State of OrissaAIR 1966 SC 1686
  5. Weston Electronics v. State of Gujarat(1988) 2 SCC 568
  6. Video Electronics Pvt. Ltd. v. State of Punjab(1989) Supp. 2 SCR 731
  7. Shree Mahavir Oil Mills v. State of J&K(1996) Supp. 9 SCR 356
  8. Loharn Steel Industries Ltd. v. State of Andhra Pradesh(1996) Supp. 10 SCR 898
  9. State of U.P. v. Laxmi Paper Mart(1997) 1 SCR 914
  10. Shree Digvijay Cement Co. Ltd. v. State of Rajasthan(1999) Supp. 5 SCR 428
  11. Jaiprakash Associates Ltd. v. State of U.P.(2014) 4 SCC 720
  12. Jindal Stainless Ltd. v. State of Haryana(2017) 12 SCC 1
  13. Mohinder Singh Gill v. Chief Election Commissioner(1978) 1 SCC 405
  14. Commissioner of Police v. Gordhandas BhanjiAIR 1952 SC 16
  15. State of West Bengal v. Anwar Ali Sarkar(1952) 1 SCC 1
  16. Twyford Tea Co. Ltd. v. State of Kerala(1970) 1 SCC 189
  17. Vijay Lakshmi v. Punjab University(2003) 8 SCC 440
  18. State of J&K v. Triloki Nath Khosa(1974) 1 SCC 19

Statutes/Laws Referred

  • Constitution of India
    • Article 301 (Freedom of trade, commerce and intercourse)
    • Article 302 (Power of Parliament to impose restrictions)
    • Article 303 (Restrictions on legislative powers regarding trade and commerce)
    • Article 304 (Restrictions on trade, commerce and intercourse among States)
  • Rajasthan Value Added Tax Act, 2003
    • Section 8(3)
  • Rajasthan Sales Tax Act, 1994
    • Section 15
  • Central Sales Tax Act, 1956
    • Section 8(5)
  • Uttar Pradesh Trade Tax Act, 1948
    • Section 5
  • Jammu and Kashmir General Sales Tax Act, 1962
    • Section 5
  • Bihar and Orissa Excise Act, 1915
    • Section 27
  • Madras General Sales Tax (Turnover and Assessment) Rules, 1939
    • Rule 16
  • Commonwealth of Australia Constitution Act, 1900
    • Section 51(ii), Section 92

U.P. Asbestos Limited vs State of Rajasthan 2025 INSC 1154 - Art. 304 Constitution
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